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PRESIDENT’S FISCAL YEAR 2016 BUDGET REQUEST 

FOR COAST GUARD AND MARITIME 

TRANSPORTATION PROGRAMS 

(114–6) 

HEARING 

BEFORE THE

SUBCOMMITTEE ON 

COAST GUARD AND MARITIME TRANSPORTATION 

OF THE

COMMITTEE ON 

TRANSPORTATION AND 

INFRASTRUCTURE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FOURTEENTH CONGRESS 

FIRST SESSION 

FEBRUARY 25, 2015 

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 

TOM RICE, South Carolina 

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 

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 

WITNESSES 

Admiral Paul F. Zukunft, Commandant, U.S. Coast Guard: 

Testimony .......................................................................................................... 5 

Prepared statement .......................................................................................... 40 

Responses to questions for the record from the following Representatives: 

Hon. Duncan Hunter of California .......................................................... 48 

Hon. Don Young of Alaska ....................................................................... 49 

Hon. Peter A. DeFazio of Oregon ............................................................. 52 

Hon. John Garamendi of California ......................................................... 59 

Hon. Lois Frankel of Florida, including the U.S. Coast Guard’s comments to the Federal Railroad Administration’s All Aboard Florida 

Draft Environmental Impact Statement .............................................. 68 

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

Guard, U.S. Coast Guard, testimony .................................................................. 5 

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

Testimony .......................................................................................................... 5 

Prepared statement .......................................................................................... 81 

Responses to questions for the record from the following Representatives: 

Hon. Duncan Hunter of California .......................................................... 88 

Hon. Lee M. Zeldin of New York .............................................................. 91 

Hon. John Garamendi of California ......................................................... 94 

Hon. Mario Cordero, Chairman, Federal Maritime Commission: 

Testimony .......................................................................................................... 5 

Prepared statement .......................................................................................... 105 

Responses to questions for the record from Hon. John Garamendi, a 

Representative in Congress from the State of California .......................... 118 

SUBMISSIONS FOR THE RECORD 

Admiral Paul F. Zukunft, Commandant, U.S. Coast Guard, response to request for information from Hon. Garret Graves, a Representative in Congress from the State of Louisiana ....................................................................... 29 

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(1) 

PRESIDENT’S FISCAL YEAR 2016 BUDGET REQUEST FOR COAST GUARD AND MARITIME 

TRANSPORTATION PROGRAMS 

WEDNESDAY, FEBRUARY 25, 2015 

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 2016 budget request from the leaders of the Coast 

Guard, the Maritime Administration, and the Federal Maritime 

Commission. 

This is our first hearing of the new Congress, so I want to take 

a moment and welcome back Ranking Member Garamendi, who 

will be here shortly, and thank him for working with me so well 

in the last Congress. I also want to welcome the new members of 

the subcommittee. I look forward to working with each of you over 

the next few years. We have two new members over here, on my 

right, and none on the other side. 

The President sent Congress a budget that would increase spend- ing by nearly $75 billion over the fiscal year 2016 spending cap. As 

a result, most Federal agencies are slated to receive generous increases in spending over current levels, including a nearly 20-percent increase for the Maritime Administration and a 7-percent increase for the Federal Maritime Commission. Yet, somehow, even 

with an additional $75 billion, the President still proposes to cut 

funding for the Coast Guard, this time by 4 percent below the current level. 

The request would slash the Coast Guard’s acquisition budget by 26 percent. The proposed level is at least $1 billion less than what 

is required to sustain the acquisition program of record. It will severely undermine efforts to recapitalize the Service’s aging and failing legacy assets, increase acquisition costs for taxpayers, and seriously degrade mission effectiveness. 

For the fourth year in a row, the administration is playing a 

reckless game. They propose a budget that cuts funding for the 

Coast Guard so they can pay for increases at other agencies, betting that Congress will somehow restore the millions of dollars 

2 

needed to sustain Coast Guard acquisitions and frontline operations. Quite frankly, I’m getting tired of playing this game. Congress is running out of quarters. 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. 

This is the first time Admiral Zukunft and Master Chief Cantrell 

appear before us. I want to commend both of you for your leadership and tremendous service to our Nation. I fully understand the 

situation they’ve been put in with this budget and I appreciate 

their candor in describing what these cuts will mean for the ability 

of the Service to successfully complete its missions. 

I also understand the situation you face on Saturday if Congress 

does not act on a fiscal year 2015 budget for the Department of 

Homeland Security. I know there will be a lot of questions about 

the impact a shutdown or a CR may have on the Coast Guard, and 

I know you will answer them candidly. However, I want to remind 

everyone that the House passed a bill. It is now up to the Senate 

to act. Unfortunately, the Senate minority refuses to even allow a 

discussion or a debate on the floor. I hope they understand the urgency of this issue, and act as soon as possible. 

The budget request for the Maritime Administration represents 

a nearly 20-percent increase over the current level. Much of the increase comes from a one-time payoff offered 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, for the third year in a row, 

the President proposes to restructure the Food for Peace program. 

This misguided proposal will eliminate a vital program for our 

farmers, put U.S. mariners out of work, and undermine our national security by reducing the domestic sealift capacity on which 

our military depends. 

Republicans and Democrats have repeatedly 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, the budget request for the Federal Maritime Commission 

proposes a 7-percent increase in funding over current levels and a 

nearly 10-percent budget increase in the number of staff. While 

this budget increase amounts to less than $2 million, I think it 

sends the wrong signal. I encourage the Chairman to continue to 

find ways to operate the Commission as efficiently as possible. 

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. 

With that, I yield to Ranking Member Garamendi, who is right 

on time. 

3 

Mr. GARAMENDI. Thank you, Mr. Chairman. I am anxious to hear 

from our witnesses, so I am going to try to be brief. 

First, congratulations to you on continuing the chairmanship. We 

have developed a very cooperative and cordial working relationship, 

and I look forward to continuing that. And thank you for the support on the issues that I care about—and, obviously, you do, too. 

The maritime policy matters. It is our most—it is our national 

economic interest that we should act upon. As the world’s largest 

trading nation, the United States exports and imports annually, in 

value, about one-fourth the global merchandise trade, approximately 95 percent of America’s foreign trade: 1.3 billion tons moves 

by ships. Based on current projections, by the year 2020, U.S. foreign trade in goods may grow to four times today’s value, and almost double its current tonnage. 

Additionally, our inland waterway traffic will increase by onethird, providing new economic opportunities in the U.S. farmlands. 

The economic potential is there for all of us to see, but so are the 

challenges, such as solving the port congestion issues, finding new 

cargo to grow the U.S.-flag fleet, and U.S. foreign trade, and developing new incentives to expand and diversify the U.S. shipbuilding 

industry. 

That is why we should not be shooting ourselves in the foot at 

a time when we should be ramping up our investments in our maritime agencies and in the U.S. maritime economy. But, unfortunately, we seem to be doing a lot of shooting towards our own feet. 

If the House fails to pass before February 27th either a clean fiscal year 2016 appropriation bill for the Department of Homeland 

Security or extending the continuing resolution to provide funding 

for DHS agencies, including the United States Coast Guard, we 

will be unnecessarily creating short-term havoc with potential longterm repercussions. This makes no sense, especially in light of the 

heightened terrorism potential. 

The Coast Guard is our first, our only line of defense protecting 

the U.S. maritime boundaries from all the threats abroad. It is irresponsible to subject the Coast Guard to a partial shutdown and 

ask active-duty coastguardsmen and coastguardswomen to work 

without pay simply to express a hard-headed disagreement with 

the administration over immigration policy. 

In closing, Mr. Chairman, the Coast Guard prides itself on being 

semper paratus, or always ready. That is a fitting model for a very 

proud institution. Perhaps we ought to use that one ourselves. I 

hope, ultimately, that common sense might prevail, we can get past 

the current crisis of funding, make sure the Coast Guard has adequate funding, and our maritime industry is supported and given 

the opportunity to grow. Too much is at stake. We have our necessity to get our work done. 

Mr. Chairman, I thank you, yield back. 

Mr. HUNTER. Thank the ranking member. 

On our panel of witnesses today is Admiral Paul Zukunft—I am 

sorry, we have the ranking member of the full committee. 

Mr. DEFAZIO. Thank you. Thank you. I won’t prolong this. I want 

to thank everyone. I won’t go through that again. 

I would just like to say I associate myself with the chairman’s 

remarks about the President’s budget as it relates to the Coast 

4 

Guard. And I am going to say to the admiral—although I know this 

is a difficult situation—but we once had a colleague named Mike 

Parker. And Mike was a Democrat turned Republican. And in the 

Bush administration they made him Assistant Secretary over the 

Corps of Engineers. And he came before us for one of these budget 

hearings, and I looked at the proposed budget. I reminded him that 

they had a $45 billion, you know, critical asset backlog. And I said, 

‘‘Is this budget adequate to meet the needs of your agency, the 

Corps of Engineers of the United States of America?’’ 

And he said, ‘‘No, absolutely not.’’ Now, that is the positive side, 

because I always try and get people who have that jurisdiction to 

tell us like it is. The downside was a week later he resigned because of family issues. 

Now—so I am not going to ask you to be quite that candid, Admiral. But I am going to observe when Congress orders you to 

produce a list of priorities that are unmet, and you come up with 

four things, I don’t buy it. And I think you are being a little too 

much of a good soldier here—not to call a Coastie a soldier, but, 

you know, in terms of—it is not the way the Pentagon works, I will 

tell you that. They make their needs that are unmet in the budget 

known in a million different ways. 

I was just at Coast Guard Station Newport—beautiful. They do 

their own work. You don’t find that on other military bases. They 

bring in contractors. You are the most frugal of the services, and 

you are critical. And you are absolutely critical on a day-to-day 

basis for the American people, and something they see—anybody 

who has access to the water or the coast—and saving lives. 

And, you know, we have to figure out a way to get you adequate 

resources to meet all your national security obligations, which have 

grown dramatically post-9/11, but also to meet your day-to-day obligations, in terms of lifesavings. And some of the cuts that are proposed this last year, like cutting my Coast Guard Air Station in 

Newport, which does half the rescues on the Oregon coast in water 

that never gets warm, where you are dead in half an hour, is not 

a place to be cutting. And we have got to find a way around this. 

And part of it has got to be you, as much as possible, within your 

chain of command from the White House, being candid with us 

about your needs. 

And, with that, I would yield back the balance of my time. 

Mr. HUNTER. Thank the gentleman. And thank the gentleman 

for being here, too. 

On our panel of witnesses today is Admiral Paul Zukunft, Commandant of the Coast Guard; Master Chief Petty Officer of the 

Coast Guard, Steven Cantrell; the Honorable Chip Jaenichen, Administrator of the Maritime Administration; and the Honorable 

Mario Cordero, Chairman of the Federal Maritime Commission. 

Admiral, before I recognize you, I want to take a moment and 

thank you for your statement on the Jones Act. Your statement 

and your comments continue to prove that the Jones Act is critical 

to our economy, and is an important part of our national security. 

I also see your wife Fran behind you, and I want to welcome her. 

And you are welcome to take his place at the table, if you like, too, 

at any point. We would enjoy that more. 

So, thank you for coming, Admiral. You are now recognized. 

5 

TESTIMONY OF ADMIRAL PAUL F. ZUKUNFT, COMMANDANT, 

U.S. COAST GUARD; 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. Thank you, Chairman. And thank you, members of this committee. We have developed a number of strategies 

to address the concerns that were addressed by Ranking Member 

DeFazio, and we will talk about those in length later. But I am 

truly humbled to be here, to speak on behalf of the 88,000 men and 

women of our United States Coast Guard. 

Let me begin by emphasizing that there has never been a greater 

demand for our Nation’s Coast Guard. In our own hemisphere, in 

the Western Hemisphere, we are witnessing extreme violence in 

Central America, stemming from insidious transnational organized 

criminal networks. 

We are also seeing significant maritime commerce ships fueled 

by the America energy renaissance. And we have rapidly seen increasing demands on both industry and Government in the world’s 

newest domain of cyber. 

Mr. HUNTER. Admiral, would you mind pulling the mic closer to 

you? I have artillery ears, hard to hear. 

Admiral ZUKUNFT. OK. How is that, better? OK. 

And we have also seen a new ocean open in the Arctic. Most importantly, all of these geostrategic trends have converged on the 

Coast Guard in an unprecedented manner, dramatically increasing 

demands on our daily operations, and major contingency preparedness. This is at a time when much of the Coast Guard’s buildings, 

piers, infrastructure, and many of our platforms are well past their 

service life. 

Last year I sent four 50-year-old Medium Endurance Cutters to 

costly emergency drydock availabilities, losing 20 percent of my 

planned patrol days, due to unscheduled maintenance. Those pressures put great strain upon the Coast Guard. 

Now, to help alleviate this strain, I have developed strategies to 

address these converging trends. And we are aligning our budget 

priorities to meet these. Let me just spend a few minutes talking 

about these four converging trends. 

The first trend is illegal trade in drugs, people, and weapons, 

which is now a $750 billion global enterprise. And, since 9/11, 

450,000 Americans have died in this country due to drug violence 

and drug overdoses. Combating these networks requires a forwardbased presence using Coast Guard authorities and our ability to attack illicit trafficking where it is most vulnerable: at sea. 

We have actionable intelligence, due to our commitment to the 

national intelligence community, on approximately 90 percent of 

known maritime drug flow in the maritime domain. Yet we are 

only able to target, detect, and disrupt 20 percent of that 90 percent, due to our limited arsenal of aircraft and ships. This is simply 

a matter of capacity. 

This is one of the reasons why the Offshore Patrol Cutter is my 

number-one acquisition priority, with an emphasis upon affordability. 

6 

Second emerging trend is our regulatory role. The United States 

is now the world’s largest producer of natural gas and crude oil, 

and the maritime transportation system is a vital pathway for 

these products. It is imperative that our marine safety workforce 

continue to grow the expertise needed to keep pace with industry, 

and to facilitate commerce, not impede it. 

And the third trend, we also have a statutory role to ensure the 

maritime transportation system is secure and resilient against 

cyber threats. In coordination with the Department of Homeland 

Security, I will soon sign out a cyber strategy for the United States 

Coast Guard. 

And, fourth, looking to polar operations, changing ice patterns 

have created new frontiers for human activity, in exploration to 

tourism, and resource development. Notably, Shell Oil just announced its intent to drill this summer. Maintaining a sure access 

to the polar regions is vital to meeting the United States Arctic 

strategy. However, this is a global access challenge, and requires 

a national solution. Funding new icebreakers must be in addition 

to, and not at the expense of, our existing acquisition programs of 

record. 

Finally, investing in 21st-century Coast Guard platforms and 

people is a smart choice. No one will return more operational value 

on every dollar than the 88,000 men and women of the United 

States Coast Guard. Our workforce received five Federal acquisition awards in 2014, and we were the first military service to obtain a clean financial audit opinion, and we have now done it 2 

years in a row. We proved to be responsible stewards of our financial resources, and capital plan operating, and maintaining platforms well beyond their service life. 

Going forward, the key to our future operational success is stable 

and predictable funding. To be very clear, a lapse in funding will 

jeopardize the construction of our eighth National Security Cutter. 

It will cause the furlough of more than 6,000 Coast Guard civilians, 

and it will curtail Coast Guard operations worldwide. 

Mr. Chairman and members of this committee, as you have in 

the past—and I know it will continue—I seek your support to avert 

such a funding collapse. I look forward to working with this committee as we make prudent investments in the 21st-century Coast 

Guard. 

Thank you, and I look forward to your questions. 

Mr. HUNTER. Thank you, Admiral, for your testimony. 

Master Chief Cantrell, you are recognized. 

Master Chief CANTRELL. Good morning, Mr. Chairman and distinguished members of the committee. It is my honor and privilege 

to appear before you today to represent the dedicated men and 

women of your United States Coast Guard who stand the watch 

every day, protecting and serving our Nation. They are charged 

with maintaining operational excellence across a broad and diverse 

spectrum of 11 statutory missions, and across all 7 continents, from 

Antarctica to the Middle East, on the high seas and in our Nation’s 

ports and waterways. 

As I continue serving my first year as the Master Chief Petty Officer of the Coast Guard, I continue to be impressed by the dedicaVerDate Aug 31 2005 10:36 Mar 08, 2016 Jkt 000000 PO 00000 Frm 00018 Fmt 6633 Sfmt 6633 P:\HEARINGS\114\CG&JOI~1\2015\2-25-1~1\93531.TXT JEAN
7 

tion, professionalism, and innovation of Coast Guard men and 

women, and the support they receive from their families. 

Performing our missions and conducting necessary training in a 

maritime environment is inherently dangerous. And our 

servicemembers operate in some of the harshest, most unforgiving 

environments imaginable. But our folks do this day in and day out, 

and they do it with a sense of devotion that is nothing short of 

spectacular. I offer two nearly simultaneous examples of the extraordinary devotion to duty and service to country. 

Early on the morning of February 15th, an H–60 Jayhawk helicopter crew from Air Station Cape Cod fought near-hurricane force 

winds and limited visibility to rescue a father and son 150 miles 

off the coast of Nantucket. That same day, the crew of Coast Guard 

cutter Polar Star was called upon to rescue 26 crewmembers on an 

Australian fishing vessel that had been stranded for nearly 2 

weeks in thick ice only a few hundred miles north of Antarctica. 

These cases are perfect examples of how an appropriately trained, 

well-focused, and properly equipped Coast Guard can excel in carrying out its missions. 

As a leader, I have an absolute responsibility to equip, train, and 

care for our workforce and their families, with the understanding 

of the immense challenges my Service faces. We are doing all that 

we can do to be good stewards of our aging resources and limited 

funding, while we tend to the needs of our servicemembers and 

their families, who make so many other sacrifices. 

We ask so much of our well-educated, innovative, and professional workforce, some of which are serving on assets older than 

their parents, supported by infrastructure older than their grandparents. We ask them to maintain these platforms at the expense 

of their own time, as well as time with their families. It is impossible to calculate that lost time in dollars and cents. 

However, our newest asset, such as the National Security Cutters and Fast Response Cutters, are performing exceptionally well, 

and don’t require these same sacrifices. I thank you for your continued support of our recapitalization efforts, despite these fiscal 

challenging times. Your support does make a difference, as these 

platforms are more capable, and contribute to the successful and 

efficient execution of our missions and our service to this Nation. 

We continue to face challenges with housing, medical, and child 

care services. But, once again, we are grateful for the support from 

this committee, as we address these challenges, ensuring these resources remain a top priority in our ongoing efforts to support our 

military members and their families. 

Mr. Chairman, members of the committee, on behalf of the men 

and women of your United States Coast Guard and their families, 

I thank you for your continued support, and thank you for the opportunity to discuss some of the highlights and challenges Coast 

Guard women and men face. 

Mr. HUNTER. Thanks, Master Chief. Are each of those stripes 4 

years? 

Master Chief CANTRELL. Yes, sir. 

Mr. HUNTER. You got 28 years? 

Master Chief CANTRELL. Thirty-one. I had another one, so—— 

8 

Mr. HUNTER. You got to wait 1 more year before you get the 

stripe? 

Master Chief CANTRELL. Yes, sir. 

Mr. HUNTER. All right. Thank you very much. 

Master Chief CANTRELL. Thank you, sir. 

Mr. HUNTER. Administrator Jaenichen, you are recognized. 

Mr. JAENICHEN. Chairman Hunter, Ranking Member Garamendi, 

and members of the subcommittee, I appreciate this opportunity to 

discuss President Obama’s budget request for the Maritime Administration for fiscal year 2016. The budget request reflects my priorities for maintaining our country’s national security and preparedness, investment in mariner training, investment in our maritime 

transportation system infrastructure, enhancing U.S.-flag competitiveness, and fostering environmental sustainability. 

The President’s budget request continues to fund readiness programs that support Department of Defense sealift requirements. 

Funding provided from the U.S. Navy will allow the Maritime Administration to continue to provide ready surge sealift support in 

2016 through the Ready Reserve Force. This is a fleet of 46 vessels 

whose primary purpose is to provide for rapid mass movement of 

defense equipment and supplies to support our armed forces, and 

to respond to national and humanitarian emergencies. 

One of these vessels, the motor vessel Cape Ray, earned special 

recognition for its unprecedented support of the United Nations 

and the Organization for Prohibition of Chemical Weapons mission 

to neutralize the Syrian Government’s declared stockpile of chemical weapons. More recently, three Ready Reserve Force vessels 

were activated to support the DOD medical mission to Liberia for 

the Ebola virus response for Operation United Assistance. 

For fiscal year 2016, $186 million is requested to fully fund, at 

the authorized level, the Maritime Security Program. This program 

provides a fleet of 60 commercial privately owned, military useful, 

U.S.-flagged and U.S.-crewed ships whose primary purpose is to 

provide assured access to sealift to support global projection of our 

U.S. armed forces, including access to their worldwide intermodal 

logistics capacity. The MSP is the core of the U.S.-flag fleet, and 

provides critical employment for 2,400 U.S. merchant mariners, 

creating a reliable pool of mariners ready to support the activation 

of our Government’s Reserve sealift fleets. 

The fiscal year 2016 funding enables the Department of Transportation to continue to maintain this critical national asset, and 

the men and women who crew them. However, declining cargoes 

are creating a significant challenge for the MSP, most notably the 

declining Department of Defense cargo to the drawdown in Afghanistan and Iraq, coupled with more than an 80-percent reduction in 

personnel and military bases overseas since 1990 are impacting the 

U.S. fleet operating in international trade. 

It is for this reason we are working with industry and Government stakeholders to develop a National Maritime Strategy to support the U.S. maritime industry, and ensure the availability of 

U.S.-flag vessels to support national security. I know the committee 

is anxious for a strategy to be completed, and I am committed to 

providing one as soon as possible. 

9 

I want to highlight that this budget request is an increase in our 

mariner training programs. This increase in funding will ensure 

that we can continue to produce highly skilled U.S. merchant marine officers to support America’s economic as well as our national 

security requirements. The President’s fiscal year 2016 budget request includes $34.6 

million to support our six State maritime academies. Included in 

that request is $5 million for the planning and design of a national 

security multimission vessel to support the replacement of the 53- 

year-old training vessel Empire State, currently used by the State 

University of New York Maritime College. The budget also includes $22 million to fund maintenance and 

repair costs for federally owned training ships currently on loan 

from the Maritime Administration to the other five State maritime 

academies. These training vessels provide opportunities for midshipmen and cadets to get important hands-on experience and technical training, a critical educational component, in order to qualify 

to take their U.S. Coast Guard merchant mariner officer examination. 

In addition to providing a training platform, these ships have 

been called up in the past to respond to humanitarian emergencies 

and disaster response efforts. For these training vessels are rapidly 

approaching the end of their useful life, and we must develop a recapitalization proposal and analysis of alternatives, with a 

multiyear budget scheme to address the replacement of vessels. The President’s budget also includes $96 million for the U.S. 

Merchant Marine Academy, which will enable the Academy to effectively achieve its core responsibility of providing the highest caliber academic study and the state-of-the-art learning facilities in 

the Nation’s future merchant marine officers and maritime transportation professionals. 

Finally, the fiscal year budget request reflects a continued commitment to reducing and mitigating transportation-related impacts 

on the environment, including $5 million for the MarAd ship disposal program, which currently is at a historic low of 19 obsolete 

vessels, having responsibly disposed of over 200 vessels since the 

year 2000. With the requested funding level in 2016, we plan to remove an additional eight vessels in 2016. 

Mr. Chairman, I appreciate the subcommittee’s continuing support for maritime programs, and I look forward to working with 

you on advancing the maritime transportation of the United States, 

and establishing a maritime strategy. 

And I am happy to respond to any questions that you or the subcommittee may have. 

Mr. HUNTER. Thank you, Administrator. I still find that number, 

80-percent reduction in forces around the world, military forces 

since 1990, extremely interesting. Thank you, Administrator. 

Chairman Cordero, you are recognized. 

Mr. CORDERO. Mr. Chairman, Ranking Member Garamendi, and 

members of the subcommittee, thank you for this opportunity to 

present the President’s fiscal year 2016 budget for the Federal 

Maritime Commission. With me today are my colleague Commissioners, Rebecca Dye, Michael Khouri, William Doyle, as well as 

the Commission’s senior executives. 

10 

With the committee’s permission, I would like my full written 

statement to be included in the record, and submitted. 

The President’s budget for the Commission provides $27,387,000 

for fiscal year 2016. This will fund 135 full-time equivalent employees, as well as mandatory rent, interagency services, and critical 

commercial services. Our fiscal year 2016 budget request includes 

$19.8 million for salaries and benefits of the 135 FTEs expected to 

be on board at the end of fiscal year 2016 to support the Commission’s mandate and protect the American shippers. Administrative expenses are funded at $7.4 million in fiscal year 

2016 to support our number of business expenses, representing a 

net increase of just $84,000 over fiscal year 2015. 

The Commission continues to work diligently to support the Nation’s goals to increase exports, the vast majority of which move 

through our ports. Ports are the gateways that handle $900 billion 

worth of containerized goods annually. 

The Commission monitors the continued growth of chassis agreements, and the increase in ocean carriers divesting from chassis 

fleets, which impact cargo movements in ports. Several months 

ago, I hosted a forum on U.S. port congestions in Los Angeles to 

foster a dialogue between industry stakeholders, regulators, and 

the general public on the causes and impacts of congestion. Signs 

of chronic congestion in our Nation’s ports have been surfacing over 

the last few years. Congestion is a serious threat to global trade. 

So much so that one private-sector economist recently opined as 

follows: ‘‘The biggest threat of global trade isn’t protectionism, war, 

or terrorism, disease or natural disasters. But, instead, mounting 

congestion at global ports and the crumbling infrastructure surrounding them.’’ 

It is clear that much of the congestion plaguing U.S. ports is not 

tied to the absence of an ILWU–PMA agreement, for which there 

is now resolution. This conclusion is based on the input received by 

the Commission at its four regional port congestion forums held 

last fall. Forums were held in Los Angeles, Baltimore, Charleston, 

and New Orleans, in order that the industry participants in those 

gateways and port regions address causes and possible solutions to 

congestion. 

There are many factors causing congestion, including unavailability of chassis at U.S. ports. Ocean carriers serving Los Angeles, 

Long Beach, New York, New Jersey, Baltimore, and other ports 

have been withdrawing from owning and providing chassis in order 

to reduce costs. Another important source of congestion stands from 

the impact of the introduction of 15,000 to 18,000 TEU vessels. 

Though the megavessels helped carriers significantly reduce their 

operating costs when they are unloaded at the U.S. ports, challenges have been presented. Logistics have been problematic, as a 

result. 

Presently, the Commission is working on a study that addresses 

congestion at U.S. ports, and continues to work with other Federal 

agencies to find solutions to supply chain bottlenecks. Closely related to congestion is the matter of marine terminal operator and 

ocean common carrier demurrage charges. The Commission is receiving numerous complaints by shippers, American shippers, who 

are repeatedly told that they may not retrieve containers due to onVerDate Aug 31 2005 10:36 Mar 08, 2016 Jkt 000000 PO 00000 Frm 00022 Fmt 6633 Sfmt 6633 P:\HEARINGS\114\CG&JOI~1\2015\2-25-1~1\93531.TXT JEAN
11 

dock congestion or gate delays. Furthermore, the container will not 

be released until demurrage is paid. 

The increased funding for fiscal year 2016 will allow the Commission to enhance its efforts in addressing both supply chain and 

port congestion issues. The recovery in the U.S. liner trades continued in 2014, with U.S. container exports and imports worldwide 

reaching 31 million TEUs in fiscal year 2014, compared to 30.5 million TEUs in 2013. The Commission continues to closely monitor 

the operation of the alliance agreements on the world’s largest container operators that are filed with the Commission. The parties to 

four agreements account for 96.8 percent of the containerized trade 

in the Asia-U.S. west coast trades. 

To reduce regulatory burdens, the Commission revised provisions 

from its advanced notice of proposed rulemakings to our OTI rules. 

Based on the feedback from the industry, Chairman Hunter, and 

other Members of the Congress, the Commission issued a proposed 

rule that would lengthen the time of the period for the OTIs to 

renew their license from 2 to 3 years, and free—and no fee. So, essentially, free of charge. Commission staff is working on recommendations to streamline other parts of our regulations, including those with service contracts and NVOCC service arrangements. 

With the funding support that Congress provided for fiscal year 

2014 and fiscal year 2015, the Commission has made great 

progress towards creating a modern, user-friendly, and, most importantly, efficient system that can make the agency more productive. With the increased funding for fiscal year 2016, the FMC will 

be able to continue to—its multiyear enhancement of its IT systems 

to carry out its congressional mandate. 

Mr. Chairman and members of the subcommittee, it is an honor 

to appear before the subcommittee, and I thank you for your support for the Commission throughout the years, and I am happy to 

answer any questions you may have. 

Mr. HUNTER. Thank you for your testimony. Since we don’t usually have a lot of people here—sometimes it is a party of two—we 

are going to go ahead and start with some of the new folks on the 

committee. 

So, thank you all for your testimony, and I am going to recognize 

the gentleman from Florida, Mr. Curbelo. 

Mr. CURBELO. Thank you very much, Mr. Chairman. And I certainly share your concerns with regards to the administration’s fiscal year 2016 budget. 

Admiral Zukunft, welcome, and thank you very much for your 

testimony. I was in Coast Guard Station Key West on Wednesday 

of last week, and I was reminded of the importance and the unique 

challenges that the Coast Guard faces in the State of Florida. 

I specifically wanted to ask you with regards to Reserve training, the President requested a $9.4 million decrease for the Reserve 

training account in fiscal year 2016. The budget also assumes enactment of a proposal made in the fiscal year 2015 request that 

would move 600 reservists from selected Reserve to inactive Ready 

Reserve, essentially making them unable to respond if the country 

needed them without significant lag time to train. 

As you know, in Florida we had—and all along the gulf coast— 

the unfortunate incident of the Deepwater Horizon some 5 years 

12 

ago. Considering the risk of terrorist attacks, of spills of national 

significance, do you think that these reduced numbers will allow 

the Coast Guard to effectively respond to these types of scenarios? 

Admiral ZUKUNFT. Congressmen, those numbers cause me great 

concern. Our Active Reserve component is now the lowest it has 

been since 1957. 

Now, we can look back in the last 2 years. We have not had a 

significant natural disaster. But they have been out there. Supertyphoon Haiyan hit the Philippines a year ago with winds in excess 

of 190 knots. There was another typhoon out in the Pacific this 

year, Vongfong, with winds of 200 knots. And are we prepared to 

deal with a natural disaster of that magnitude here, in the United 

States? Because when we do, we field strip our other field units. 

The Coast Guard does not have a force in garrison, other than 

our Active Reserve. And so, I am deeply concerned with the number of Active Reserves right now, as we look at the disasters that 

may confront us in the 21st century. Your point is well taken. I 

cannot drop my Active Reserve level below where we are at right 

now. I would like to grow that back. 

Mr. CURBELO. Thank you for your answer. I have an additional 

question. 

In my discussion with Captain Young and Commander Reed on 

Wednesday down in Key West, they expressed some concerns with 

regards to, obviously, a potential shutdown of the department, but 

also of these short-term funding mechanisms for the department. 

Can you briefly expound on the challenges that these short-term 

funding measures pose to your department? 

Admiral ZUKUNFT. Yes. I will expound a little bit on two of those. 

The first was when we had sequestration in 2013. And when I 

had to make those budget adjustments, the only thing I can adjust 

is the amount of fuel that I burn. And what burns the most fuel 

is airplanes and ships. So it has a direct impact on our operations. 

We entered 2014 with a funding lapse. The Budget Control Act 

was still 3 months out, and we didn’t know if we would be sequestered that year, as well. So we have to scale back operations. And 

whenever you scale back operations, you play into the hands of our 

adversaries, and they take full advantage of the lack of Coast 

Guard persistent presence. 

Mr. CURBELO. Thank you, Admiral. And I will yield back. But before, I want to recognize the rest of the panel. Thank you all for 

being here, especially Chairman Cordero, who it is a pleasure to 

see. 

Thank you very much, Mr. Chairman. 

Mr. HUNTER. Thank the gentleman. The ranking member, Mr. 

Garamendi, is recognized. 

Mr. GARAMENDI. Mr. Chairman, I think you have started a very 

good practice. Those who—you and I are always here, and we have 

time for our questions. I would like to pass my time to Member 

Hahn. 

Ms. HAHN. Thank you, Mr. Chairman, Ranking Member. I think 

I am always here, too, but I will take the opportunity to ask my 

questions. 

And I have several questions that if I—we need to do a second 

round, I want to do that, because I have some questions for the 

13 

Coast Guard. But I wanted to start with Chairman Cordero, because you were really bringing it up about port congestion. And I 

will tell you. These last contract negotiations between the PMA and 

the ILWU were really long and arduous, and really had an impact, 

unfortunately, on so much in this country. 

And before I ask you my question, I just want to say it—to me, 

and to, I think, the rest of the country, what happened was unfortunate, and had nothing to do with the actual negotiations going 

on in San Francisco. I actually would like to see the Federal Maritime Commission look into some of the unilateral actions by the 

Pacific Maritime Association, in terms of, you know, not allowing 

the workers to work in the evenings and on the weekends. I think 

that was really untenable and unfortunate. 

And I would think the Coast Guard would also have—you know, 

would have had a fit. I can see, from my house, those—at one point 

there were 35 ships outside of Long Beach/Los Angeles breakwater. 

The Coast Guard base is right there. You know, that had to cause 

a lot of extra angst for the Coast Guard. So that would be something I would like to see, a full investigation on how, in 5 years 

from now, when we go back through these contract negotiations, we 

don’t have that kind of, really, lockdown of our ports on the west 

coast. 

But Honorable Cordero, I am very concerned about the congestion at the ports. As you said, the fact that this contract was 

agreed to and will be ratified, most likely, does not necessarily 

change the congestion on the docks. And we got a lot of big problems. Panama Canal expansion project is coming online next year. 

We are not going to stop that. But what can we do for our ports 

in this country to really address this congestion? 

And I know you talked about it generally in your remarks, but 

could you be more specific on what is the Commission going to do 

to address the congestion on the docks, the last mile going in and 

out of our ports? It is a serious problem that could put us at a huge 

globally competitive disadvantage. 

I said a lot; I hope there was a question in there. 

Mr. CORDERO. Well, thank you, Congresswoman. I appreciate the 

question. 

Number one, as I quoted a private-sector economist, and that 

quote came from the Journal of Commerce, and the economist is 

Walter Kemmsies with Moffatt and Nichol. Very respected economist. And you are absolutely correct; the congestion here at our 

ports is an issue, not only just here in—for the Nation, but it is 

a global issue. And, for that reason, in the summer of 2014, I identified the need to hold these congestion forums, and the Federal 

Maritime Commission proceeded with the assistance of my colleagues on the Commission to hold four forums. 

Now, one of our—we have nine basic responsibilities, the FMC. 

One of them is to monitor the activities of marine terminal operators, port authorities, and the foreign couriers. So this issue would 

be an interesting question, given what has occurred on the west 

coast. But let me say this. 

Number one, there are systematic causes to congestion. And I 

think it is fair to say that, as I have indicated—and I have been 

stating that, once the negotiation was over, that is not going to 

14 

cure congestion. Absolutely not. And this is something that I 

shared, and I can represent. Everybody in industry shares that 

feeling, whether you are a carrier, whether you are a port authority, and whether you are a terminal operator. 

So, in essence, let me just highlight three particular ones that 

are really crucial at this time. 

Number one, I mentioned the question of the shortages of chassis. It has been very crucial. Now, on the optimistic side, I believe 

they are moving forward to a model which eventually—that is 

going to be tweaked, and that is going to be cured at some point. 

But, for now, it is a problem. 

Number two, last year I testified, and this year I made reference 

again with regard to the involvement of these mega-alliances, these 

alliances by the big carriers. And add to that the mega-vessels. 

When I was a commissioner at the Port of Long Beach at first we 

had, at best, a 5,000 TEU. That progressed to an 8,000 TEU. And 

now we have vessels three times as large as a football field. So, essentially, there are problems, and we are hopeful—we, the FMC— 

to kind of identify what these issues are, and suggest possible solutions, and identify possible bottlenecks to address. 

Ms. HAHN. Thank you. I appreciate that. And, again, I hope, as 

you have identified some of these other issues—for instance, demurrage—I think, you know, I really feel like something fishy was 

going on at our ports with the PMA not allowing the workers to 

load and unload the cargo. Meanwhile, charging folks for the storage of the containers on the docks, which weren’t able to be loaded 

and unloaded. So I think there are some real—a lot of questions 

that we have about some actions that were taken during these contract negotiations, and I hope—— 

Mr. CORDERO. And I will say—— 

Ms. HAHN [continuing]. The Commission looks into it. 

Mr. CORDERO. And I just want to stress that this issue that I 

mentioned, including demurrage, is not an issue isolated to the 

west coast. This is a major issue at many of our ports. 

I will represent to you that the American shippers are very angry 

at this point with regard to that question. And, hopefully, we will 

be able to identify some of these issues as part of our congestion 

study that we are—our staff—is working on. 

Ms. HAHN. Thank you. I yield back, and I hope we have a second 

round of questions. 

Mr. HUNTER. Thank the gentlelady. Mr. Graves is recognized. 

Mr. GRAVES OF LOUISIANA. Thank you, Mr. Chairman. Just want 

to make note that in the 2 minutes I had the gavel I didn’t even 

screw up, and I already got demoted. 

[Laughter.] 

Mr. GRAVES OF LOUISIANA. Admiral, thank you very much for 

being here. It is great to see you again, and I enjoyed your State 

of the Coast Guard speech yesterday. Chief, thank you for being 

here, as well. 

Louisiana is a huge maritime State, as you know, the third longest coastline in the Nation, 5 of the top 15 tonnage ports in the 

United States. We have a huge dependence upon Coast Guard 

doing its job well in Louisiana, and I want to thank you and all 

the men and women that work under each of you for your service. 

15 

In looking at the budget request, you see a 26-percent reduction 

in the ACI account, as compared to last year. You and I in the past 

have had long conversations about the fact, for example, the 110s 

are operating decades beyond their intended service life. When you 

look at the fact that you are operating so far beyond the service life 

on your 110s, the 210s and 270, the Medium Endurance Cutters 

once again operating beyond their service life, is that reduction 

aligned with where the Coast Guard needs to be, in regard to reinvesting or recapitalizing in its equipment to ensure that the men 

and women of the Coast Guard have the resources and the equipment they need to do their jobs? 

Admiral ZUKUNFT. Thank you, Congressman. We have identified, 

you know, the right platforms for the 21st century. Many of the 

platforms we operate today were designed to do coastal search and 

rescue—our 210-foot cutters, to go after mariners that wanted to 

be found. Today, we are going after narco traffickers, and the last 

thing they want to do is to be detected, apprehended, and brought 

to justice. 

The Fast Response Cutters that we are currently building in 

Louisiana, that is a game changer for us. And we will build 58 of 

those. We will recompete the contract. But when you talk to the 

crewmembers on these cutters, especially those that have served on 

the 110 before that, it is truly a game changer. 

We had an increase in migrant flow over the Christmas holiday. 

And had it not been for these Fast Response Cutters standing the 

watch over that Christmas holiday, we would have seen a potential 

mass exodus from Cuba, if the Coast Guard wasn’t out there, 

standing the watch. But we would not be able to sustain that 

watch with these new platforms that we are bringing to bear. 

We proved the same with the National Security Cutter. And that 

is why the Offshore Patrol Cutter will be so critical as that 

middleware between a coastal patrol craft, an off-water frigate, if 

you will, a National Security Cutter, and then that middleware, the 

Offshore Patrol Cutter, to protect our maritime equities, including 

those in the State of Louisiana. 

Mr. GRAVES OF LOUISIANA. So is that a yes or a no, in regard to 

the budget being where it needs to be in order for you to recapitalize, considering that these vessels are operating well beyond 

their intended service life? 

Admiral ZUKUNFT. Yes. The best part about the fiscal year 2016 

budget is it gives us the wherewithal to proceed with full rate production of the Fast Response Cutters: 6 per year, and then to build 

out all 58 of those. A challenge we have is the full funding for final 

design of our Offshore Patrol Cutter. I am quite confident that we 

will demonstrate that this will be an affordable platform, and that 

the funding will be forthcoming for us to proceed with what will be 

the most significant major acquisition in Coast Guard history. 

Mr. GRAVES OF LOUISIANA. Well, with your happiness with the 

performance of the FRC, perhaps you can turn to Louisiana yards 

again on the OPC when you are ready to go there. 

Let me change gears very quickly in the last minute. You and 

I also had long discussions about the fact that the Coast Guard— 

and I think we both used the term—has become somewhat of a 

Swiss Army knife. If you look at the evolution of the Service over 

16 

the last few hundred years, you have taken on all sorts of missions 

that never were initially considered within the Coast Guard realm. 

Looking at—and, as Congressman Curbelo noted, the reduction 

in your Reserve training budget this year, nearly 9 percent, as I 

recall—that is what allows you to address some of the surge capacities that you need in some cases. Considering the multimission 

new face of the Coast Guard, all the things you are trying to do 

out there, do you have the resources you need, in order to continue 

carrying out the security mission that the—the growing security 

mission that the Coast Guard is faced with today? 

Admiral ZUKUNFT. Congressman, right now I am resourced for a 

perfect world. If we don’t have a terrorist attack, if we don’t have 

a major natural disaster. Any one of those uncertainties, I am 

resourced for that. But that is—it is inconsistent with a Service 

that prides itself on being semper paratus. 

As the Commandant of the Coast Guard, what I will not do is 

offer up reductions to our force structure. We have done that over 

the last several years, due to making painful tradeoff decisions to 

meet current-year budget needs. But I cannot cut any deeper into 

our force structure, as Ranking Member DeFazio and others have 

brought up, and Congressman Curbelo, with our Reserve component. But that is also true in our active-duty component, as well. 

So I need to hold fast on my force structure, because that really 

is the backbone of our Coast Guard. 

Mr. GRAVES OF LOUISIANA. Did you want me to yield back? 

Mr. HUNTER. Thank the gentleman. I would like to recognize and 

again say how just honored we are to have such esteemed colleagues here, who could easily be the full committee chairman, but 

isn’t right now. Mr. DeFazio is recognized. 

Mr. DEFAZIO. Thanks, Mr. Chairman. 

And thanks for that last testimony, Admiral. I appreciate that. 

But within force reduction I would want to include, you know, your 

basic function of, you know, safety of life at sea and, in my case, 

that gets a bit parochial with the Newport Air Station. Central 

coast we have North Bend, Astoria. They are involved in half of the 

rescues off the Oregon coast. As you know, very cold water, short 

survival time. Congress forestalled some proposed cuts there. I 

know you are trying to move money around. 

But I never—we haven’t seen a real rationale for those cuts. 

What one would observe is, A, would be a longer response time 

from North Bend; B, that puts more wear and tear on the equipment, which seems to be a good deal of an offset, in addition to the 

potential for losing lives. 

So, I mean, if you are going to persist in that, obviously, I am 

going to do what I can to find a way to not let that happen. But, 

beyond that, in the interim, I would like to see the analysis of how 

this really would have saved money. Because I—if you are not reducing force—a lot of it was personnel cost—and if you are not reducing force, then they are just going somewhere else. So that is 

for that. 

Now, if we can move on beyond my parochial issues, which I obviously feel very strongly about, but—icebreaking. I have been on 

the Polar Star at the South Pole with the former Commandant. We 

got the Polar Sea. I am going to see the poor thing in dry dock. 

17 

As I understand it, pretty much dismantling it to try and keep the 

other ship going. And you are at a point where there is nothing in 

your budget for a new icebreaker—potentially $1 billion. 

You know, some are advocating that, on an interim measure, perhaps we should look at refitting the Polar Sea to try and get—because I understand the hull is fairly good. And I was on—not out 

on, but on—a 52 at Newport, which is 60 years old, which are 

unique boats. There are only four left. They can go out in a breaking 26-foot sea. The other cutters can’t. I don’t know what we are 

going to do for a follow-on for the 52s, or if we can keep them going 

for 100 years. 

So, the question would be, are you looking at and close to making 

a recommendation on what we are going to do in the interim, perhaps by refitting the Polar Sea? 

Admiral ZUKUNFT. Yes, Ranking Member. We have got money in 

the 2015 budget to pull the Polar Sea out of the water so we can 

do a full materiel inspection of it. Unfortunately, under continuing 

resolution, my hands are tied in the ability to award that contract. 

So therein lies the challenges of operating under a continuing resolution. 

Then, until we can do a full assessment, then we can make a full 

business case analysis of whether it is prudent to invest in buying 

up to perhaps 10 years of service life on a nearly 40-year-old ship, 

or do we repurpose that money for perhaps a total recapitalization 

of the fleet, as well, which—at some point we are going to have to 

make that decision. But we are running out of time, and—— 

Mr. DEFAZIO. You just gave us a good action item there. 

Admiral ZUKUNFT. OK. 

Mr. DEFAZIO. I wasn’t aware that you couldn’t do the contract 

under the continuing resolution, and that should be something we 

could fix. 

Would there be money—would you need an appropriation to follow that, or just need authorization? 

Admiral ZUKUNFT. Just need authorization, an anomaly to the 

existing continuing resolution. The same would apply as we want 

to award the National Security Cutter number 8, and we need to 

make that decision by mid-March. So that time is rapidly running 

out on us. 

Mr. DEFAZIO. Well, I would think the chairman might be interested in us doing a little rifle-shot suspension bill that might deal 

with some of these issues. Good. 

And then, on the question about the 52s, I mean, I know you 

have got an awful lot of stuff out there that needs replacing. I 

mean what are we going to do in the future? These are unique 

boats, you use them around the country. We are down to the last 

four. Maybe you can squeeze another round of refitting out of them. 

Beautiful inside, I wish the inside of my boat looked like that in 

the engine room. But, still, it is 60 years old. You have a followon proposal there? Are you thinking about that? 

Because, again, I go back to, you know, your list of unmet priorities. And I guess maybe we need to direct you a little differently, 

in terms of what we want to see a list of. Maybe we should be asking about your unprogrammed, or unmet projected capital needs, 

which would go—which would be a much more comprehensive list, 

18 

which might get the attention of Congress a little better than these 

four little items. 

Admiral ZUKUNFT. And just on the 52—the hulls are as you have 

seen. I have been on those boats, as well. And there is great pride 

in ownership, and they are relatively easy to maintain, from an engineering standpoint. So right now there is no need to repurpose 

those. They have a very unique, high ability to tow other vessels 

and operate in those conditions that you have in the State of Oregon. 

So, right now, there is not a service need to recapitalize those 

four very unique boats for a very unique mission in a very unique 

environment. 

Mr. DEFAZIO. OK. So we will look forward to their 100th birthday, perhaps, with a fourth set of engines. 

Thank you, Mr. Chairman. 

Mr. HUNTER. Thank the gentleman. OK, it is my turn. I guess 

the first question I have, Admiral, is this. I think since I have had 

this position chairing this subcommittee, 4 years in a row now the 

President has sent us a budget request that guts your acquisition. 

The administration seems determined not to spend more than $1 

billion. That is what they keep doing, $1 billion on recapitalization 

of Coast Guard’s aging and failing legacy assets. 

The GAO and previous Commandants have testified that it takes 

a little bit more than $2 billion a year to keep you on your program 

of record and your current acquisition strategy on time and on 

budget. So the administration does not support your acquisition 

program. I mean that is pretty plain. 

And I talked to Secretary Johnson last week, and it seems he is 

kind of obviously focusing on what is happening right now with the 

entire Department, but he didn’t seem too concerned. And I think 

the game is the administration does this, and it is up to Congress, 

then, to come in and say, ‘‘Oh, we all love the Coast Guard, we are 

going to plus them up to what they need to be.’’ I think it is a 

dumb game. So we are not going to play it. 

So, my question is, what are you—when are you going to give us 

the American people and the administration a new—mission needs 

statements that cut out those missions which you can no longer do? 

And what are the missions that you can no longer do? If we pass 

a budget for you that reflects exactly the President’s budget request, what missions are you going to not do? 

Admiral ZUKUNFT. And, as you are probably aware, well aware, 

Chairman, the word ‘‘no’’ has not always been in our vernacular. 

I will produce a mission needs statement, and my staff will certainly brief yours this summer. But as we look at this mission 

needs statement, what has changed in just the last couple of years? 

As DOD rebalances, you know, what vacuums have been created, 

and what unique niches does the Coast Guard need to fill? And 

that is why I am very focused on the Western Hemisphere. I have 

tripled the number of ships in the Western Hemisphere today. It 

is not because I have triple the number of ships in my inventory. 

I had to take them from somewhere else and put other mission 

areas at risk as I look at what is the greatest risk to our national 

security right now. And it is in the form of transnational organized 

19 

crime. And so, we need to include that in the mission needs statement. 

The energy renaissance. We didn’t see that when we wrote the 

last mission needs statement in 2004. An opening Arctic, which requires command and control platforms to be up there, at least on 

a rotational basis, and certainly icebreakers, to have the ability to 

have persistent presence up there, as well. 

So, I owe you that mission needs statement. When I meet with 

every Department of Defense geographic component commander 

across the world, every one of them, as they look at the threats in 

their area of responsibility, many of those require Coast Guardunique authorities. And so, the demand on a global scale continues 

to go up, whether it is in the East China Sea, off the coast of Nigeria, in the Pacific Island nations in those remote economic exclusive 

zones, where fish is their only source of economic prosperity. Time 

and time again we are seeing more and more demands for more 

Coast Guard. And so, that is what we need to capture—— 

Mr. HUNTER. Let me—I can go to the combatant commanders 

and get a requirement list for the Coast Guard, too. That is not 

what I am asking for. What I would like is a mission needs statement that reflects your budget. And you could put that, if you want 

to, side by side with the combatant commander, the geographic 

combatant commander requirements. That is fine. But I would like 

a mission needs statement that is actually what you can do, not 

what you would like to do, or have been asked to do. 

Admiral ZUKUNFT. OK, understood. 

Mr. HUNTER. Can you get us that? 

Admiral ZUKUNFT. I will. 

Mr. HUNTER. OK. Thank you, Admiral. I appreciate it, because 

we want to know what can you do with the budget that the President has laid out. 

Question for Administrator Jaenichen. Talked about the Jones 

Act a little bit. Talked about it in the Senate. Our colleague, Senator McCain, has talked about axing the Jones Act, getting rid of 

it. We think that would be a horrible, horrible thing for America’s 

industrial base and our ability to fight wars, protect ourselves, protect the sea lanes, and build ships. So I want you to talk about it. 

What impact is even talking about it, about changing the build 

requirements or getting rid of the Jones Act, what does that mean 

for American ship manufacturers? 

Mr. JAENICHEN. Chairman, a couple things. In 2013 the Maritime Administration put out an economic impact study of the shipyards and repairing industry. Essentially, what it said is there are 

100,000 shipyard workers that are currently employed building 

ships. There are also—if you take the indirect jobs, there are another 300,000 jobs in a $36 billion industry. 

The challenge that we have is, today—the Commandant mentioned the energy renaissance. Today the order book at our shipyards around the country, we have 33 large vessels, oceangoing 

vessels. A significant number of them, 25, are actually supporting 

the energy industry. There are 12 of them that are 330,000-barrel 

tank vessels. There are also seven that are 110,000-barrel or greater, in terms of articulated tug and barges to be able to move those 

cargoes. Those are currently on the order book today. We additionVerDate Aug 31 2005 10:36 Mar 08, 2016 Jkt 000000 PO 00000 Frm 00031 Fmt 6633 Sfmt 6633 P:\HEARINGS\114\CG&JOI~1\2015\2-25-1~1\93531.TXT JEAN
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ally have eight container or RoCon kind of vessels that are also on 

the order book. 

The challenge is even the discussion of potentially changing the 

build requirement is enough to essentially influence some of the finance folks. And if they get concerned about the ability for the 

folks that are buying these ships to be able to get financing, or they 

take the risk and they make the risk too large so that they have 

to charge a higher risk rate to be able to get that, some of those 

projects that are currently on the order book today may not occur. 

And it has nothing to do with even changing the Jones Act. It 

is just the sheer threat of changing the Jones Act, because what 

ends up happening is, if you bring in tonnage that can be built 

overseas at shipyards that are subsidized by forward governments, 

you get a situation where you imbalance the economic model that 

these operators currently who have made the investment in Jones 

Act tonnage, built it in the U.S. to be able to be coastwise trade, 

they are now at a disadvantage in comparison. So now you have 

got projects that are currently financed for 25 or 30 years. They 

now can’t compete in the same environment. So, potentially, those 

projects go under, or they can’t pay their loans. So this is a cascading problem that could potentially be created. 

There are a number of folks that have said that the Jones Act 

is the problem and the reason why we have gas high at the pumps. 

Can I—I could take it through sort of a little mathematical analysis and say that is not exactly the case. If you take a look at the 

U.S. Energy Information Administration, they have said that, from 

a barrel of crude oil, you get 12 gallons of diesel, 19 gallons of gas, 

and that is out of a 42-gallon barrel. So about 31 gallons. So that 

is about 75 percent is useful. 

The difference in the rates to be able to move on a foreign-flag 

vessel versus a U.S.-flag vessel, say from the Gulf of Mexico to 

Canada, is about $2 per barrel. To move it to the refineries on the 

east coast, it is about $5 a barrel. The difference is about $3. So 

you take that 31, divide it into 3, and you get about $0.09. That 

is the cost to be able to move it per barrel. And that doesn’t even 

count the 25 percent of that barrel that can be used for other 

things to be able to defer that cost. 

I compare that $0.09 to the Federal tax on gas, $0.18. In the 

State of New York, the local and State taxes is $0.44. So $0.62. 

And a comparison is $0.09. I also take $0.09 and I compare it to 

the price of a gallon of gas. It is less than 4 percent. Whoever is 

saying that this is the cost of our woes for high gas prices is misinforming the American people. 

Mr. HUNTER. Thank you for that. And I want to tie that in, Admiral. What is the Coast Guard’s position, if you had foreign-flag 

vessels moving chemicals, flammable gas, oil, anything like that 

that can do anything up in the interior river system of the United 

States? What does that do to the Coast Guard? 

Admiral ZUKUNFT. Yes. We have a very rigorous port State control program for foreign-flagged vessels in—on any given day in our 

U.S. ports we probably have at least a dozen vessels that are being 

detained because they do not comply with international standards 

for pollution and safety of life at sea. 

21 

Those standards are the exact same standards that we apply to 

the U.S. fleet. There is no difference between the two. But we do 

see that flag States of convenience, some of them are cutting corners. And in this regard, moving highly volatile materials, this is 

not a place where we can afford to cut corners. And, as the Commissioner mentioned, in our very congested ports. 

Mr. HUNTER. So let me ask you more to the point, then. Would 

the Coast Guard rather see American mariners on Americanflagged vessels that have been inspected by the U.S. Coast Guard 

and have been trained up to U.S. Coast Guard standards and U.S. 

mariner standards driving volatile ships up and down America’s inland waterways? Or would you rather see folks from Pakistan, 

from Yemen, from Somalia driving those ships on the interior waterways? What is the Coast Guard’s take on that? 

Admiral ZUKUNFT. Yes. Certainly from our credentialing program, we run background checks on all of those mariners. They 

carry—many of them carry transportation worker identification 

credentials. So we have that trust and confidence in our American 

operators. 

So, to answer your questions, from a security aspect, that would 

be my preference. 

Mr. HUNTER. Thank you, Admiral. Thank you, Administrator. 

I would like to yield to Mr. Garamendi. 

Mr. GARAMENDI. I yield to Mr. Cummings. 

Mr. CUMMINGS. Let me—Mr. Chairman, I want to thank you for 

your comments that you just made. 

And I hope that—it just reminds me, with regard to the Jones 

Act, I agree with you, Administrator. I mean we can’t even—we— 

you know, it seems as if there is some real short-sightedness going 

on here, and that is a major problem. And I am hoping that the 

chairman will join all of us on this—particularly on this subcommittee, to try to make sure that the Congress understands the 

significance of the Jones Act, because I think a lot of our colleagues 

just do not understand how significant it is, and how America is 

falling behind. I used to say slowly, but surely. Now it is fast. 

And that leads me to these questions. You know, as you know, 

our highest priority, Administrator, you know, was to try to make 

sure that we—well, when I go back and I think about my chairmanship of the subcommittee over the Coast Guard, you know, we 

spent a lot of time just trying to make sure that our ports were 

safe. And we put in a lot of measures to try to accomplish that. 

Where are we on that, the port—with regard to Coast Guard and 

ports? 

Admiral ZUKUNFT. Chairman, I will be happy to take that question. 

Mr. CUMMINGS. Yes. 

Admiral ZUKUNFT. We have really matured our relationship with 

our Area Maritime Security Committees. And even taking it one 

step further, when I look at the State of California, and Florida, 

and others where we have transnational criminal organizations operating in those very same waters where we are trying to discriminate licit commerce from illicit commerce, working with Federal, 

State, local, and private-sector, the synergies that we have, many 

of those come under our captain-of-the-port authorities. But we 

22 

have literally come light years since the implementation of the 

Maritime Transportation Security Act of 2002. 

Mr. CUMMINGS. Good. Administrator, how many vessels are currently flying the U.S. flag in oceangoing foreign trade? 

Mr. JAENICHEN. Sir, as of the 1st of January of 2012, we had 106 

vessels. Today that number is 81. And I anticipate that it is going 

to go lower than that before the end of the year. The challenge for 

the U.S.-flag internationally trading fleet is the lack of available 

Government-impelled cargo, which is one of the things that they 

rely on and have access to. 

DOD cargoes are principally one of the principal cargoes that 

they carry on an annual basis. The—General Paul Selva, the commander of U.S. Transportation Command, recently is on record as 

saying that this budget for transportation requirements, essentially, is 50 percent what it was just 2 years ago. So that is a significant challenge for the U.S.-flag fleet, and we are seeing their 

exodus because of the lack of Government-impelled cargo and other 

cargo opportunities. 

Mr. CUMMINGS. How many such vessels were there, say, 5 years 

ago? 

Mr. JAENICHEN. Five years ago, typically from—for about the last 

20 years, all except for the year 2007, we had a number above 100 

in that entire period. So we have been hovering around 100, somewhere between 103 and just below that in—only in 2007. But, essentially, from 2012 over the last 3-year period, we have lost 25 

percent of the U.S.-flag fleet. And that corresponds to about 2,200 

U.S. mariner jobs that have been lost, as a result. 

Mr. CUMMINGS. And I know you have been working diligently to 

strengthen the flag fleet. And I want to applaud you and Secretary 

Foxx for the efforts, and—because he has shown a lot of personal 

commitment to the success of the U.S. merchant marine, more so 

than just about any other Secretary that I have had a relationship 

with. 

Can you discuss what steps have been taken, and what additional ones are planned to support our U.S.-flag fleet in the foreign 

trade? 

Mr. JAENICHEN. Thank you for your question, sir. We have done 

a couple of things. We started last year with two National Maritime Strategy symposiums. We did the first one—the first one we 

did in January was solely dedicated on the U.S.-flag fleet trading 

internationally. And so we met for several days, had about 600 

stakeholders that participated in that particular symposium. We 

captured all those comments. We have now collated them, we have 

identified what we refer to as tenets that would be required to be 

supporting in a strategy, and we have also identified some options 

that might be available to be able to improve the number of ships 

operating under U.S. flag, internationally. 

We have shared that with our Marine Transportation System 

National Advisory Council. They have assisted us in prioritizing 

those. I have sat down with my Federal partners, the Federal Maritime Commission, members of the Commandant’s staff, and others 

who are involved in this particular requirement to be able to get 

this National Maritime Strategy out. 

23 

I have also employed an outside organization who is actually 

going and talking to stakeholders to make sure that we recognize 

what a National Maritime Strategy should and should not do. And 

we are in the process of getting that drafted, and then getting it 

coordinated with the agency. I hope to have that out very soon. 

Mr. CUMMINGS. Thank you, Mr. Chairman. 

Mr. HUNTER. Thank the gentleman. Ms. Brownley is recognized. 

Ms. BROWNLEY. Thank you, Mr. Chairman. I appreciate it. I am 

a new member of the T&I Committee, and very, very honored to 

be able to sit on this subcommittee. And I have a very specific 

question, probably for you, Admiral. And it is—my understanding 

that the Coast Guard air station currently located at Los Angeles 

International Airport will be relocating to Point Mugu Naval Air 

Station, part of Naval Base Ventura County, which is in my district. I am very excited about this news, very pleased about the 

move, and look forward to welcoming new personnel to Ventura 

County. 

My first question is, if Congress does fail to fund DHS programs 

this week, would the shutdown affect the planning of this move, 

and would it impact it at all? 

Admiral ZUKUNFT. Congresswoman, no, it would not. We are 

being squeezed out of the Los Angeles Airport, as you well know, 

due to growth in that sector. And so we need to continue to operate 

in that domain. What it does inhibit our ability to do, though, is 

to make upgrades that would be needed at Ventura County to permanently base aircraft there. But we can certainly operate from 

there in the near term. But what it does not provide us is the longterm solution, hangar upgrades and the like, to make that a permanent operating base. 

Ms. BROWNLEY. And what is the timeframe, exactly, for this 

move? 

Admiral ZUKUNFT. We will be relocating to Point Mugu in 2016. 

Ms. BROWNLEY. And in terms of buildings there, have you identified the buildings that need to be ungraded? 

Admiral ZUKUNFT. There is a hangar that would need to be upgraded, and we are also looking across DHS to see if there might 

be an opportunity to have other components of the Department perhaps collocated there, as well. So we are looking at this from an 

all-of-DHS approach, not just from a Coast Guard approach. 

Ms. BROWNLEY. And the money proposed within the fiscal budget, is that money enough to cover all of the costs and the upgrades 

on the site? You wouldn’t need any additional money—— 

Admiral ZUKUNFT. Yes, we would need an additional appropriation to be able to build out a hangar to fully accommodate that. We 

can provide you what that dollar value would be, but right now we 

don’t have an appropriation to do so. 

Ms. BROWNLEY. Thank you, sir. And I yield back. 

Mr. HUNTER. Thank the gentlelady. I think we are well represented by the west coast here. 

[Laughter.] 

Mr. HUNTER. Yes. Except for a couple people. That is all right. 

I would like to yield to the ranking member, Mr. Garamendi. 

24 

Mr. GARAMENDI. Mr. Chairman, thank you, and I thank my colleagues for their questions. Many of the questions that I was going 

to ask have been asked. 

But I want to follow up, Mr. Jaenichen, on the discussion that 

you were having with regard to the merchant marine, the critical 

role that it plays. 

And also, Admiral, in your opening statement, you mentioned the 

issue of LNG. We will be shipping LNG offshore this year, actually. 

Cheniere will begin its process. I think you are all aware of my 

particular interest in this. It may take 100 LNG ships to handle 

just the Cheniere shipments. The issue of safety is of utmost importance. We know that, under current law, imported LNG must 

be handled by American sailors, merchant marine. We passed a bill 

last year in the Coast Guard authorization that authorizes the Secretary to have discretionary authority on export. 

Mr. Jaenichen, what is the status of that discretionary authority? 

How will it be used with regard to the export from the Cheniere 

facility in Texas? 

Mr. JAENICHEN. Ranking Member Garamendi, thank you for that 

question. We have done a number of initiatives. First, we have 

reached out to the LNG industry to try to better understand what 

it is they are shipping, how much they are shipping, and where 

they are shipping from. To be able to do that, we have partnered 

with the Department of Energy and a task force that is associated 

with the Committee on Marine Transportation, looking at—specifically at alternative energies. 

We also, as part of our international engagement with the 

bilaterals that we do on a maritime basis, and also what we do 

internationally, I have personally talked with members of the Japanese delegation, the South Korean delegation, and the Chinese delegation, with regard to some of these particular issues. I will say 

that they are not taking root very effectively, but we are continuing 

to engage on that, to see if there are opportunities in some kind 

of agreements that we might do. 

We are also taking a look, talking with our shipyards, in terms 

of their capacity. I think you know that the last LNG vessel that 

we built, we built 16 of them back in the 1970s and the 1980s, that 

the last one was built in 1980. The yards that did that here in the 

U.S. are no longer building commercial vessels, so we have some 

challenges to be able to reconstitute that particular capacity. So, 

we are doing a number of things to make sure that we can understand and be able to exercise the direction that you provided, sir. 

Mr. GARAMENDI. Specifically, having looked at all of that, is it 

the policy of the administration to encourage the construction, the 

building of LNG tankers, in the United States? Is that your policy, 

or is it not? 

Mr. JAENICHEN. That is what we are working to put together, as 

a policy, to do that. It is not firmly set yet. I am working on that 

to be able to get to the Secretary. 

Mr. GARAMENDI. Well, let me be very clear where I am coming 

from. There are three critical national security elements involved 

in the LNG issue. First of all, the natural gas itself is a strategic 

asset of the United States. It has led to the repowering of many 

of our electrical power plants. And it has allowed us to have a sigVerDate Aug 31 2005 10:36 Mar 08, 2016 Jkt 000000 PO 00000 Frm 00036 Fmt 6633 Sfmt 6633 P:\HEARINGS\114\CG&JOI~1\2015\2-25-1~1\93531.TXT JEAN
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nificantly lower energy cost than many of our competitors. It is a 

strategic asset here, in the United States. 

Secondly, the shipbuilding industry is absolutely critical to the 

Coast Guard, to the U.S. Navy, and to the—what remains of the 

American merchant marine. 

Thirdly, the merchant marines themselves are critical. We have 

seen the discussion part of it today, that the merchant marines are 

absolutely critical for the—that is not only the mariners, but also 

the ships critical to the national defense. Ninety percent of military 

supplies are by ship. I do represent Travis Air Force Base and the 

Air Mobility Command. We love C–5As and 17s. However, that is 

a small percentage of the materiel that needs to be moved around 

the world. 

So, we have three critical national security elements involved in 

the LNG trade. We should require that all LNG exported from the 

United States be on American ships, so that these three elements 

of national security are enhanced. 

A lot of mariners would be put to work. You mentioned the number of mariners that have lost their jobs: 2,000 in the last 3 years. 

They could be on these ships. The shipbuilding industry can build 

these ships. They are going to take time to gear up, perhaps 3 to 

5 years. So there would be a phase-in period of time for the LNG 

ships to come online. 

And, finally, it is a security issue. The chairman may have 

stacked the deck a little bit by mentioning Yemenis and Somalians 

and others that might be on these ships. And, in fact, perhaps they 

are on the ships, we don’t know. But we do know that every American mariner is licensed. And we know who they are. We have their 

thumb prints, we have their identification. And all of these volatile 

cargoes, at least in American ports, in and out, ought to have 

American mariners. 

That ought to be our policy. And that ought to be your policy, Mr. 

Jaenichen. And you should ask for nothing less. And the Coast 

Guard should be equally certain, since the safety of our ports is 

your business, Admiral. So, having done that, I want to hear specifically where you are, Mr. Jaenichen, in this process. I know you 

are not going to get it today. 

Next, I am going to take just a few more minutes, if it is OK 

with you, Mr. Chairman. The National Maritime Strategy was supposed to be delivered to this committee last week. Where is it, Mr. 

Jaenichen? 

Mr. JAENICHEN. Sir, it is going to be late, as you and I previously 

discussed. 

One of the challenges I want to make sure the National Maritime 

Strategy—that we deliver is the right one. I think we are only 

going to get one chance at this, to be able to get it right. We have 

done a significant amount of effort to make sure that we have captured stakeholder input, to make sure we have captured the—what 

is going to be required. And one of the things that was included 

in that Coast Guard authorization was that I have to also coordinate it within the interagency. That process takes a little bit longer 

than—— 

Mr. GARAMENDI. Let me guess. Stuck in OMB. Is that correct? 

Mr. JAENICHEN. The interagency process takes some time, sir. 

26 

Mr. GARAMENDI. So it is stuck in OMB. 

[Laughter.] 

Mr. GARAMENDI. Well, we will see if we can pry it out of OMB. 

I assume that you have worked with the Coast Guard on this strategy. Is that correct, Mr.—— 

Mr. JAENICHEN. We have personally talked with them, sir. I have 

also met with Chairman Cordero and his Commissioners, and we 

have done a lot of what I would call the interagency engagement. 

I still have some drafting, the physical requirements to do. So we 

have gotten their feedback, and I am now in the process of drafting. So it is not—— 

Mr. GARAMENDI. I suspect that the Chair and I would be interested in having a conversation with you about the general issues 

that are in the current strategy. We may have some views ourselves. So I would appreciate that conversation. 

Next, P.L. 480. I understand that USAID, OMB, Departments of 

Agriculture, Transportation have been involved in negotiating some 

sort of a new P.L. 480 program. Is that correct? 

Mr. JAENICHEN. Mr. Garamendi, you are correct. 

Mr. GARAMENDI. My understanding is also none of that information has been shared with the people that actually write the laws— 

us. So when do we hear what the new strategy is? 

Mr. JAENICHEN. Sir, what is in the President’s budget for fiscal 

year 2016 is a 25-percent local and regional purchase requirement. 

Our budget supports that. What is being discussed is something 

more expansive than that. That legislative language I know is 

being drafted, and it is not at a point I think it is ready to be delivered to you. 

Mr. GARAMENDI. Well, we have two critical issues here that are 

kept secret from the Congress. Not a good thing to do. It is kind 

of useful to brief us along the way. You can get some input from 

us, may give better direction, more likelihood of something actually 

happening. The fact that it hasn’t been done is disturbing. 

If I might, Mr. Chairman, there is one further question, and this 

is to the admiral, and it has to do with your new airplanes that 

you are getting from the Air Force. Neat little things, the C–27J 

models. 

Do you have any money to upgrade those, and to make them 

compatible with the Coast Guard requirements? 

Admiral ZUKUNFT. Congressman, we do. And we have an appropriation to do so. In fact, that work is ongoing, as I speak. 

Mr. GARAMENDI. Let me guess. The continuing resolution makes 

it impossible for you to actually do the work? 

Admiral ZUKUNFT. Some of this work is actually ongoing. And so 

we are still on a timeline where we will have four C–27Js in Sacramento in 2016. 

Mr. GARAMENDI. I do like the word ‘‘Sacramento.’’ My understanding is that they are to replace the C–130J model, or H model. 

Admiral ZUKUNFT. This is actually a midrange aircraft, and so 

we have a C–144, which—originally, the program of record was for 

36. We have 18 of those C–144 aircraft. And, as you know, we have 

14 C–27Js, which is a much more capable aircraft. So we are reassessing is that total of 18 and 14, will that meet our service needs 

into the 21st century. 

27 

Mr. GARAMENDI. OK. As the C–27s come on board, they are not 

all coming at once; they are going to be spread out over 3, 4 years. 

Is that correct? 

Admiral ZUKUNFT. That is correct. 

Mr. GARAMENDI. OK. 

Admiral ZUKUNFT. At the same time—— 

Mr. GARAMENDI. Is there a hiatus and, therefore, an insufficient 

number of aircraft, depending on the timing of the arrivals of the 

27s? 

Admiral ZUKUNFT. That is a good question. So we are phasing 

the arrival of the C–27Js with the dispatching of the Hercules 

version of the C–130, which is going to the Forestry Service. In 

fact, that first aircraft of eight is in the process of its transition, 

as well. 

So, the timing of that, so we don’t create a gap for the Coast 

Guard, is that C–27Js come on board, the C–130H will go over to 

the Forestry Service. And that will happen over a period of the 

next 3 years. 

Mr. GARAMENDI. So there is or is not a gap? 

Admiral ZUKUNFT. Right now there will be a small gap, but it is 

a negligible one. 

Mr. GARAMENDI. Where will that gap be? 

Admiral ZUKUNFT. This is near-shore, since it is a midrange aircraft. And right now our greatest gap is when we are using longrange surveillance in the drug transit zones, which are normally 

staged out of a foreign country. 

Mr. GARAMENDI. I would like to get into this, a little more detail 

about the gap. The Forest Service will not be able to use those airplanes immediately, because they have to be reconfigured for this— 

for firefighting. And it may not be in the interest of drug interdiction and long-range surveillance that a gap exist at all. I think I 

can go on and on with a whole series of questions here about that 

issue, but I would like to get some more detail on that. 

A final point is that I—last week I was with the President of 

Panama, and had a discussion with him about their desire to work 

more closely with the Coast Guard. And actually, he was willing 

to establish some sort of a station and facility in Panama that 

would be available to the Coast Guard to be used. I know you have 

some facilities there now, but there would be a possibility of a more 

integrated facility. 

And, finally, back to Port Hueneme. The Navy will be flying its 

Poseidon version of the Global Hawk out of Port Hueneme, and 

they will be doing exercises in that area, training exercises. That 

piece of equipment observes the ocean well. I would like to have a 

discussion with you about using the Poseidon information in the 

training, as they observe the southern California coastal area. 

Might find it to be useful. 

Thank you very much. Yield. 

Mr. HUNTER. Thank the ranking member. I would like to recognize Mr. Graves again for the second round. 

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

we had the chance in a previous life to spend a good bit of time 

working on the oil spill. And, again, I want to thank you for your 

efforts there. 

28 

As you know, the—you can do simple math, and you can come 

to the conclusion that you have more oil remaining in the Gulf of 

Mexico today than perhaps was spilled in the entire Valdez oil 

spill. And the State of Louisiana and the Coast Guard differed on 

the best approach to continue seeking the—and removing the oil 

that was there. Where is the best place for the State of Louisiana 

to turn if they have concerns related to the residual oil in the Gulf 

of Mexico resulting from Deepwater Horizon? 

Admiral ZUKUNFT. Yes. The first place to begin is with the regional response team. But probably, to even navigate through that 

process, would—to meet with the sector commander in New Orleans, who now owns the Federal on-scene coordinator process. But 

to activate the regional response team, as we look at measures of 

whether it is more friendly to the environment to let the oil decay 

or to go in and do removal operations—now, this does not negate 

the fact that if there is report of oil or oiling, that oil will be removed under the Oil Pollution Act of 1990. 

Mr. GRAVES OF LOUISIANA. Well, I think for about 3 years we 

had asked the Coast Guard to compel the responsible parties to 

step in and require them to do additional oil removal, as you and 

I have discussed. Just by moving into the knee-deep water, as we 

discussed recently, as I recall, I think the 9-month period yielded 

a 15-time, 12-time increase in the removal of oil, indicating that 

that was a good scenario, in terms of finding additional oil and removing it. 

For years, we pushed the Coast Guard to require additional removal activities, and those were rejected. If the Coast Guard is unwilling to compel the responsible party, what—where does the 

State go then? 

Admiral ZUKUNFT. Well, we compelled the responsible party. And 

in 2012, 2013—each year we removed about 6 million pounds of oil. 

And we continue that process into 2014. Whether it was weatherrelated or not, but—we only removed about 29,000 pounds. That 

does not suggest that there is not still oil out there. But it just has 

not presented itself. But when it does, the Coast Guard will respond to any increased oiling. 

What we then do is we have to send it off to a lab and determine 

whose oil is it, to begin with. So this will be a Coast Guard-led evolution. And if this is BP’s oil, then they will be held accountable 

for those removal actions. 

Mr. GRAVES OF LOUISIANA. Do you see the State and the parish, 

county, local governments as having a role in the response? 

Admiral ZUKUNFT. Absolutely, Congressman. And that was a big 

learning curve during, really, the most complex oil spill in U.S. history, was who is in charge. The State of Louisiana, as are most 

coastal States, typically operate under a Stafford Act. And it is the 

Governor of that given State that directs the day-to-day operations. 

Under the Clean Water Act, this is led by the Federal Government. And so it is a different governance structure. And so, what 

we felt was imperative is that every Governor, every parish president, every mayor on the coast of—the entire gulf coast have a 

Coast Guard liaison officer that they can talk to, to make sure that 

their equities were represented. We didn’t do that at the very beVerDate Aug 31 2005 10:36 Mar 08, 2016 Jkt 000000 PO 00000 Frm 00040 Fmt 6633 Sfmt 6633 P:\HEARINGS\114\CG&JOI~1\2015\2-25-1~1\93531.TXT JEAN
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ginning, and so there were concerns of a breach of trust with the 

Coast Guard. 

Mr. GRAVES OF LOUISIANA. But you do recognize that the Oil Pollution Act also has a savings clause that allows for State authorities, State laws, to continue to apply in cases when they don’t— 

they generally conflict with Federal law. 

Admiral ZUKUNFT. There is, correct. 

Mr. GRAVES OF LOUISIANA. Let me change gears real quick. The 

Coast Guard leads a U.S. delegation in the IMO related to ship recycling. And it is my understanding there is currently a convention 

under discussion that would, in effect, encourage the use of foreign 

facilities for ship recycling, as opposed to those stateside. 

Could I just ask you, in the Coast Guard’s role in that delegation 

to the IMO, could you also consider the use of stateside ship recycling facilities for foreign ship recycling? 

Admiral ZUKUNFT. Yes, I will have to get back to you. I can’t 

comment on that on the record right now, but I will be happy to 

back-brief you on that. 

[The information follows:] 

The Coast Guard acknowledges its role as leading the U.S. delegations to 

the International Maritime Organization (IMO). However, the Coast Guard 

is not involved in the permitting of vessels being recycled in the U.S. and 

is not in a position to respond to the specific request presented by Representative Graves. It is recommended that ship recycling-related questions 

be posed to the Coast Guard’s governmental partners at the U.S. Maritime 

Administration (MarAd). MarAd generally manages U.S. ship recycling 

issues/concerns for purposes of IMO activities. 

Mr. GRAVES OF LOUISIANA. Thank you. I appreciate it. Administrator Jaenichen, you guys issued a contract in October of last year 

to scrap a vessel. And, as I recall, the way that works is you have 

companies that come in and bid, and that company that bids the 

highest actually pays you to scrap the ship, because they generate 

revenue from the recycling activities. 

It is my recollection that MarAd actually selected a company that 

was willing to pay $400,000 less, as opposed to more. And, again, 

just reminding folks that the higher the price, the better for taxpayers, because the revenues come to the State—excuse me, come 

to the United States. 

In this case, MarAd allowed additional time for the company to 

pay the fee that they were supposed to be paying, which, as I understand, is not allowed by the rules. And now it is my understanding that the company has actually shut down operations, and 

has four MarAd vessels. So, struggling with a few things. 

Number one, does MarAd actually do a financial evaluation to 

determine the solvency of the company, the ability of the company 

to pay? Now we are in a situation where the taxpayers have not 

received the funds, the vessels are not being scrapped. 

And secondly, just trying to understand best value for the taxpayer there, to choose a company that is willing to pay $400,000 

less. Thank you. 

Mr. JAENICHEN. Congressman, thank you for that particular 

question. I would have to go and take a look at the specific solicitation. Here is what I can tell you. 

30 

Over the 90 contracts that we have either done through vessel 

sales or through service contracts, where we actually have to pay 

for them to actually dispose of the vessel, 72 of the 90 that we have 

done have, in fact, gone to the highest bidder. Under our best-value 

contract, we do—we take a look at a couple things. We take a look 

at the sales price or the service fee cost. We take a look at the production period. We take a look at the past performance of that particular company. And then we award it, based on best value. 

The GAO has looked at this program, and has validated our procedures for best value. And they have also ensured that we are in 

compliance with the Federal acquisition requirements. 

With regard to the current issue with the scrapyard that is currently disposing of a couple of our vessels, one of the things that 

has happened over the last probably month and a half or so, the 

bottom has dropped out of the scrap metal market, and so that is 

a challenge. We were made aware of this here recently. We are trying to ascertain what the status is, and how that might affect the 

actual performance period of the production contract. I would have 

to get back to you on the specifics, because I really don’t have that 

information. 

I will tell you that we have had a situation in the most recent 

solicitation where we had ships that—bids were made. Because of 

the change in the scrap metal market, that the actual first and second bidder actually withdrew their sales contracts. We actually 

awarded it to the next lowest bidder, which was $400,000 less than 

the highest bid. But they were still willing to pay for that vessel 

sale. So those are the examples of what happens under the solicitation, and how it works. 

And so, to be able to go back to specific, you know, contracts, in 

terms of money lost, we do attempt to get the highest value, to 

make sure that the taxpayer is the beneficiary of that. And, again, 

80 percent of the time we are able to do that. 

Mr. GRAVES OF LOUISIANA. Thank you, Administrator. I would 

appreciate if you could follow back up on that. As I understand, the 

high bidder in this case actually did protest, and still lost out in 

this case. 

Thank you, Mr. Chairman. 

Mr. HUNTER. Thank the gentleman. Ms. Hahn is rerecognized. 

Ms. HAHN. Thank you, Mr. Chairman. This is for the admiral, 

Admiral Z. 

I know you know that this Congress—or not this Congress, but 

a previous Congress, after 9/11 passed the law that would require 

100 percent of scanning for the containers that are coming in and 

out of our ports. And it is clear, from this administration, that that 

goal is not even being attempted to be achieved. And, in fact, we 

have heard from, I think, both Secretaries of Homeland Security 

that it is just not something that is going to happen. And, instead, 

the administration has asked for a layered approach to security in 

and out of our ports. 

I think our ports are still one of the most vulnerable entryways 

into our country. And I think sort of the excuse that it may slow 

down commerce, and that would be of a bigger detriment to our 

economy than an attack at one of our ports would be, I disagree 

with that 100 percent. And, again, interesting that, through these 

31 

last months of the contract negotiations, we have been told now 

that it might take 3 months to clear out the backlog of the ships 

on the west coast ports, which I think is a bigger issue. 

I have introduced a bill that would—the SCAN Act—that would 

authorize two ports in the country to do a pilot program of 100 percent scanning of the containers. I think the technology exists so 

that it wouldn’t slow down commerce. Is that something that you 

think we ought to at least evaluate, or look into, as a possible longterm policy for this country? 

Admiral ZUKUNFT. Yes, Congresswoman, that would really fall 

under the oversight of our Customs and Border Protection. So it 

would probably be unfair for me to comment on what Commissioner Kerlikowske would—this would come under his purview, 

whether that would be a prudent measure or not. 

I will say we have a seamless interaction with our Customs and 

Border Protection. Coast Guard and CBP work at the National Targeting Center together, where Coast Guard screens every foreign 

crewmember destined for the United States. It could be on a passenger vessel, it could be a commercial vessel. CBP does the same 

thing for every container. Where was it packed? Is it a trust shipper or not? Which would then make that particular container subject to further screening, or perhaps even more intrusive and timeconsuming, actually opening and inspecting that container. But, at 

the end of the day, this bill would really need to be addressed to 

Customs and Border Protection. 

Ms. HAHN. Well, I just was asking you because, of course, Coast 

Guard oversees our ships coming in and out. And, again, on the 

west coast you are dealing with other issues, with panga boats, and 

that is even another layer of security coming in and out of our 

ports. So I appreciate that. 

So we—the Secretary of Homeland Security came out today with 

a statement that said if Congress was unable to reach agreement 

on the DHS funding this week, contract negotiations will be delayed to construct the Coast Guard’s eighth National Security Cutter, which would lead to higher cost. And I was wondering if you 

could just elaborate to us, so that, while we are trying to make this 

decision, what kind of cost would be higher as a result of the DHS 

funding lapsing? 

Admiral ZUKUNFT. Yes. Through our acquisition program, we go 

with a fixed-price contract. And so we have negotiated the price of 

that contract. And so the contract that will be let is $638 million. 

But we need to award that by mid-March, so it will be obligated 

by the end of the month. If we miss this timeline, then we have 

to renegotiate the price all over again. In our years of experience, 

every time you negotiate, you negotiate to a higher level, not to a 

lower level. 

So, it increases the cost and, more importantly, it also delays the 

construction of this final cutter of this program of record at a point 

in time where we need to build trade space in our acquisition budget to bring on the Offshore Patrol Cutter. 

Ms. HAHN. And I also—I understand that a lapse in the funding 

will impact your 225-foot buoy tender ships. And these ships, of 

course, are crucial to protecting vessels on our coastline, recovering 

32 

spilled oil. What does a lapse in maintenance of these ships—what 

does that mean? 

Admiral ZUKUNFT. Yes. So we have a very finite acquisition 

budget. And so we squeeze everything that we can into it. And so, 

with our 225-foot buoy tenders, this is a service life extension program to extend the service life of these ships out for a number of 

years ahead. 

And so, what that does create, then, is a backlog. And then we 

would have to look at the next year acquisition budget, but we 

would need some relief in that to deal with the backlog that the 

CR may create this year. 

Ms. HAHN. Thank you. I yield back. 

Mr. HUNTER. Thank the gentlewoman. I want to yield to the 

ranking member, Mr. Garamendi. 

Mr. GARAMENDI. I want to thank the witnesses for their testimony today, the work that you do. We ask some questions. Some 

of them seem to be tough, but all of them are very important, and 

I want to thank all of you. I am going to have to slip away to attend another hearing over in the Committee on Armed Services. So 

thank you very, very much. 

Mr. Chairman, I yield. 

Mr. HUNTER. Thank the gentleman. Master Chief, not forgotten 

about you. 

So let me ask. With all the stuff that is going on, all the budget 

cuts, and I guess you could say the kind of spurning by your own 

leadership within the administration and OMB and the Department of Homeland Security, they don’t think much of the Coast 

Guard, as reflected by their budget. What is the biggest obstacle 

that you face in making sure that your Coast Guard men and 

women are able to function and live happy lives and go about their 

duties? 

Master Chief CANTRELL. Well, thank you, sir. What—this is affecting folks right now today. And what we want our folks to be 

focused on is getting the mission done. And the last thing I want 

by a young petty officer on a buoy tender that has got a 10,000- 

pound sinker swinging around on the deck as they work a buoy, 

is to worry about if he is going to get a paycheck or not, or worry 

about his training is going to be affected, or his transfer is going 

to be affected later on. We want them laser-focused on mission. 

Same thing for our folks that are out driving boats, that are out 

pounding through 20-foot surf to rescue a sinking fishing vessel. I 

want them focused on their job, not worried about whether they 

are going to get a funding bill, or whether—again, it goes back to 

the—are they going to get a paycheck or not. That is not what they 

should be focused on. 

Mr. HUNTER. Let me—— 

Master Chief CANTRELL. I mean I think we have the—— 

Mr. HUNTER. Let me ask—— 

Master Chief CANTRELL [continuing]. Best, brightest, and—— 

Mr. HUNTER. If there is a shutdown, do the—does the Coast 

Guard not get funded? 

Master Chief CANTRELL. A shutdown? If we are not funded, our 

folks, in essence, would not—I mean they are going to show up for 

work, because that is what they do. But a lapse this week in approVerDate Aug 31 2005 10:36 Mar 08, 2016 Jkt 000000 PO 00000 Frm 00044 Fmt 6633 Sfmt 6633 P:\HEARINGS\114\CG&JOI~1\2015\2-25-1~1\93531.TXT JEAN
33 

priations affects, of course, next week. But this is what is on their 

minds. 

Mr. HUNTER. When is payday for the Coast Guard? It is every 

2 weeks? 

Master Chief CANTRELL. Every 2 weeks. Yes, sir. 

Mr. HUNTER. So the first iteration of not being paid would kick 

in 2 weeks next month? 

Master Chief CANTRELL. They would be paid on the first of 

March, as the pay period ends at the end of this week. So they get 

paid at the end of this week. It is the next paycheck that folks will 

be concerned about. 

And, again—but they are worried about this now. And these are 

folks that live paycheck to paycheck, anyway, most of the time. 

And you could go to a commissary any of those paydays and see 

what I am talking about. But this is stuff that is affecting them. 

We have got a high retention rate and folks that really want to 

do great work, and lace up their boots and come to work and get 

after the jobs that they signed up to do. And I don’t want them focused on the things that are certainly outside their paygrade to 

worry about, but it certainly has taken its toll. 

Mr. HUNTER. Besides the budget woes right now, what is the biggest thing that worries you about your people? 

Master Chief CANTRELL. Well, it does kind of go with budget uncertainty a lot, because, look, we are operating—I mean—— 

Mr. HUNTER. Let me phrase it differently. Is it housing? Is it 

commissaries on bases? Is it—what is it? 

Master Chief CANTRELL. We are concerned—housing, medical, 

child care services are something that we stay focused on. We have 

good relationships with our DOD partners that allow us access to 

those facilities. But a lot of our units are remotely located, so we 

have to rerack our housing to make sure—some of our older housing is divested from, but that means that we have got to look for 

other options for our folks in some of these small areas that aren’t 

base-centric like, you know, a lot of the DOD facilities are. 

But child care is a big thing that worries a lot of our folks that 

make career decisions sometimes on whether child care services are 

available, or even affordable. But we work on that, and we stay focused on it to make sure we are providing resources within our 

own Service, but also looking outside the Coast Guard to our DOD 

partners. And we maintain really good relationships there. 

Mr. HUNTER. Thanks, Master Chief. 

Master Chief CANTRELL. Thank you, sir. 

Mr. HUNTER. Chairman Cordero, you requested an extra $1 million, a bit over, to increase your workforce by 10 percent. That is 

not a lot, right? Ten percent is a small number of a small number. 

And your testimony indicates that these increases are needed to review a growing number of large and complex liner agreements to 

conduct—and to conduct basic day-to-day activities. 

Yet, over the last year, the FMC has held several public forums 

on ways to make ports and cruise lines more environmentally 

friendly, giving awards to companies with environmentally sustainable shipping practices, encourages the maritime sector to use 

FMC, the FMC to—dispute resolution services, to use them for resolution services instead of independent arbitrators. And, in some 

34 

ways, you tried to put yourselves in between business and business, creating, I think, unnecessary regulatory burdens on small 

businesses. 

This sounds like mission creep. And just one example. You are 

giving an Earth Day award, in your position as Chairman of the 

Federal Maritime Commission, coming up. So, specifically, my 

question is two-part. 

One, mission creep adding more employees, and it seems like 

doing a little bit of busy work, just to stay busy. 

And, two, when it comes to things like giving environmental 

awards to companies, what statutory authority does the Federal 

Maritime Commission have to regulate environmental compliance 

of ships and ports? Do you enforce the act to produce—to prevent 

pollution from ships? The Clean Water Act? The Clean Air Act? 

The clean hull title of the 2010 Coast Guard, or any other Federal 

environmental statutes? 

Mr. CORDERO. Thank you for your question, Chairman. First of 

all, with regard to the environmental component, I can assure the 

chairman and the committee that this is a very minor part of the 

FMC, in terms of our staff and the role that we play in, essentially, 

what we recognize as best practices. And I think, on that, the key 

question is with development. 

So, as a Commission, as a maritime Commission with the objective and the mission of fostering fair, efficient, reliable ocean transportation system, I think sustainable development is a concept that 

the—not only has the industry embraced, but it is a concept that— 

it is a global concept that is now being embraced. So I can assure 

the committee that it is a minor part. 

So, essentially, with regard to the agreement component, that is 

a major role, absolutely. And I think, if I may add, just in the last 

quarter of 2014 there were 83 agreements filed at the Commission. 

That is the most agreements filed in—going back 10 years. Total 

agreements filed with the Commission are 540. 

Now, if I may add two other things, two offices are involved with 

that. It is the Office of Agreements. We only have three people handling that. Once they review and process those agreements, then 

we have the Office of Economic and Competition Analysis. We have 

been operating with four economists—recently are adding a fifth. 

Given the size of the agreements and our main mandate, as you 

have indicated, we have been operating basically in survival mode. 

As to the dispute resolution component, I will say that I have 

met with many industry stakeholders. I think they have embraced 

that. It is a cost savings effort, in terms of volunteering informal 

processes to dispute resolution issues. One issue that we talked 

about earlier was the demurrage. The demurrage is an issue for 

the American shippers. They have filed complaints, and some of 

that I could—it fair to say that the—you know, our dispute resolution component, by way of our department, has been able to work 

as a mediator to try to comply—or, excuse me, to try to have the 

parties come forward with a compromise on that. 

So, the raise that we seek, the increases, of course, with our nine 

responsibilities that we have, that I have mentioned, or—a couple 

of them are major. And I just represent to the fact that we have 

35 

been operating on survival mode. I mean right now we have 500— 

excuse me. We have 115 employees. 

Mr. HUNTER. All right, let me ask you this. Considering a lot of 

the stuff that you just mentioned is regulatory in nature, and could 

be done by a regulatory agency versus a Presidentially appointed 

Commission, where the President appoints the Commissioners, and 

the Senate approves them, do you see a need—do you think that 

a lot of what you do could be done by a regulatory agency, such 

as MarAd? 

Mr. CORDERO. Well, I think, going back to 1961, in 1961 the 

FMC, as it is composed today, the objective is to have a Commission and agency to specifically oversee the activities of foreign carriers. Given the globalized world that we have today, it is ever 

more important to have a well-funded FMC. And I think, going 

back specifically to 1961, the decision was made at that point, as 

I understand it, there would be a domestic component that my colleague, Chip Jaenichen, or the administrator handles at MarAd, 

and it would be the international component, particularly the regulatory aspect of that the FMC handles. 

So, if I may respectfully say, it is ever more important to have 

an FMC to regulate the foreign carriers who bring most of the 

cargo, if not in the 90th percentile, to our shores. 

Mr. HUNTER. Thank you. 

Mr. CORDERO. Thank you. 

Mr. HUNTER. Mr. Cummings, you are recognized. 

Mr. CUMMINGS. Thank you very much, Mr. Chairman. Admiral, 

let me ask you this. As you know, one of my highest priorities 

when I was Chair was ensuring that the student body at the Coast 

Guard Academy reflected the diversity of the Nation that the Coast 

Guard serves. And great strides were made, no doubt about it. It 

has been simply astounding, what we were able to achieve. 

But certainly we ought to hold and protect our progress. And I 

am wondering what is going on there, and are those efforts continuing to make sure that we have a diverse Academy? 

Admiral ZUKUNFT. Congressman, I am pleased to say that today 

probably the United States Coast Guard Academy is the most—or 

certainly one of the most—diverse service academies of all of military service academies. This year about 39 percent of our entrants 

were underrepresented minorities. 

So, we have turned the corner. The next step is we need to retain. We are doing well, but we need to continue to mentor and 

grow this diverse workforce at every level in our organization, and 

we still have more work to do in that regard. 

I have taken a personal interest in this, as well. I am active in 

NNOA, I have gone out through our CSPI program to actually recruit college candidates in their second year of college to be part 

of our Coast Guard team. They get a stipend of about $36,000 a 

year to finish out their last 2 years of college, go off to officer candidate school, take the oath, and wear this Coast Guard uniform 

as a commissioned officer. I take this—this is one of the key pinnacles of my Commandant’s direction. And you can count on me to 

follow through on this. 

Mr. CUMMINGS. You know, it was interesting. When we were 

working on this issue years ago, people kept saying, with regard to 

36 

the Academy, that if you make your force more diverse, the SAT 

scores would be lower, and that people would not be successful. 

And, you know, I kept telling them, you know, you have to go and 

find people. And I have sat now, I guess for 10 years, on the Naval 

Academy Board of Visitors. And I know we had an opportunity to 

have some—a lot of conversations between the Coast Guard and 

the Naval Academy, because the Naval Academy has done a pretty 

good job on this issue, too. 

So, I just want to make sure that, you know, we are continuing 

to do that. And, based on what you just said, I am glad that we 

are going to the colleges and—because in today’s world, with so 

many students having such a difficult time with money, and getting through school, I mean, if they can get that education, get 

paid, and then have a job, that is the other piece. After you get out, 

I mean, that is major. And so that is good to hear. 

Master Chief, you know, you said something about—you were 

talking about child care. And we—in my district we did a series of 

forums with women. And we did one with women in business, we 

did another one with women in education. But we also did one with 

women in the military. And I was—and I am telling you it was one 

of the most enlightening events that I have ever done in my 18 

years of being in Congress, because we sat there and women literally cried. It got very emotional about being able to get decent 

child care, and how so often they had to end their careers. 

I mean this was just—this was mainly Army and Air Force, but 

it was just very interesting. And I never—I guess I—I mean I had 

three kids, and we had to go through the child care thing. I did not 

know it was such a major issue. So it is a problem, isn’t it? 

Master Chief CANTRELL. Yes, sir. And we see it more and more 

with folks making these career decisions. Even when they are looking at whatever their next assignment is going to be of is there affordable and acceptable child care in there. And we work really 

hard with the GSA child care subsidy reimbursement program, as 

well as our DOD folks where we can, to get our members access 

to those facilities. And we are continuing to work that, and we are 

getting better each year, I think. 

But it is a daunting task for them sometimes to think about 

whether it is worth it to stay in the Service. And we have got an 

investment in those folks that—we don’t want to let them walk out 

the door. So we are focused on trying to find other ways to take 

care of them. 

Mr. CUMMINGS. Well, anything I can do to be supportive, please 

let me know. 

Master Chief CANTRELL. Yes, sir. 

Mr. CUMMINGS. Thank you, Mr. Chairman. 

Mr. HUNTER. Thank the gentleman. You could always institute 

the rules that the Marine Corps had about 60 years ago, which— 

you can’t get married until—in 7 years, or go on two floats or go 

to war once, or something like that. It is a—having families on 

base is a burden. And the military did recognize that 50, 60 years 

ago. I mean that is where a lot of the resources go. 

Admiral, I just got a few more questions here. Towing vessel 

safety rule. It has been 10 years. It has been 10 years. A decade. 

Anything? 

37 

Admiral ZUKUNFT. First response, complex. We have had, literally, thousands of comments. And we have adjudicated every one 

of those. This and balanced water regulations are two of my highest regulatory packages in my inbox. Actually, not on my desk. 

Trust me. When they arrive, they will be off the same day. 

I am confident that we will have a rulemaking package ready to 

leave my Coast Guard headquarters within the next several 

months. What we have to adjudicate is what are the unintended 

consequences, especially to the small operators? Is this going to 

squeeze them out of business? And so we go through a very extensive economic analysis that goes through that, as well. 

At the same time, we take on the burden of having to inspect 

6,000 more vessels that currently aren’t in our inspection fleet of 

responsibility. But that rulemaking package is—as you have highlighted, definitely needs to get moving. And I will move it out. 

Mr. HUNTER. Thank you. At least it will happen under your tenure. 

Admiral ZUKUNFT. This will happen this year. Again, I have been 

given—I am not always optimistic with rulemaking packages, but 

I expect to have it out this spring. 

Mr. HUNTER. OK, thank you. Along with that, we changed the 

rules for the inspection of the distant water tuna fleet to 5 years 

last year. When is the Coast Guard going to release guidance to its 

inspectors and industry implementing the new change? 

Admiral ZUKUNFT. Yes, that is an amendment to a policy letter. 

That will come to me, and I expect to see that within—probably 

within the next month, and we will be able to push that out, and 

then move that forward. And I know that is a high priority for you. 

Mr. HUNTER. It goes to you from where? 

Admiral ZUKUNFT. It goes from me and then to the Department 

of Homeland Security. 

Mr. HUNTER. From you to the Department? 

Admiral ZUKUNFT. Right. 

Mr. HUNTER. The DHS. OK. With that, the one final thing that 

I have, I know that you have looked at the Presidential budget request. And I know that you have at least scrubbed it, and said, 

‘‘How do we make our acquisition strategy line up with this, if this 

is our actual budget?’’ And I am just—if you could, just say a few 

words on—just from your very first scrub on this, what would you 

do right now, if the budget that is reflected right now is the actual 

budget, going forward into 2016? What are you going to do with the 

OPCs? What are you going to do with final down-select from your 

three to one next year? 

I saw, instead of asking for money now, you are hoping that next 

year the Department, DHS, just gives you a bunch of money to be 

able to do it once you down-select to one, which is never going to 

happen. I mean that is a—it is just not ever going to happen. So 

what would you say on your first scrub right now? What do you 

drop? What do you keep? What do you push out? Do you not have 

your eighth NSC? I mean what do you do? 

Admiral ZUKUNFT. Right. Actually, what I asked first is that my 

written statement be entered into the record. 

Mr. HUNTER. Without objection. 

38 

Admiral ZUKUNFT. Because we went through some of that scrub, 

as well. 

Where we are really feeling the pain the greatest is in our shore 

infrastructure. I have got about a $1.4 billion backlog in shore infrastructure. And I am making an annualized downpayment of $40 

million. It is like paying the bare minimum on a credit card. But 

I am still paying interest on that. 

So, we are barely keeping pace with that backlog, but I am having to make those deferments in order to keep our operational platform acquisition program of record viable. So those are the very 

tough tradeoff decisions—— 

Mr. HUNTER. You are saying you are trading off your shore facilities. So that is what you would do in the end, in order to keep the 

acquisition program of record on track, you would not spend 

money—you are going to just keep spending the bare minimum? 

Admiral ZUKUNFT. Well, obviously, there is a prioritization process that goes with that. Ironically, we get some relief when you 

have a hurricane, and then we get relief funding to then restore infrastructure that was also on that backlog. So at least we can use 

disaster relief funding. But that is not—you know, that is using 

hope as an acquisition strategy, so I can’t do that. 

And so, I struggle with an acquisition budget that is, you know, 

hovering somewhere near $1 billion, as I look at what the Coast 

Guard is going to need in the 21st century. And so that is what 

we need. We look at a mission needs statement built to budget, 

what I really need is a reliable and predictable budget, because we 

have really been on a roller coaster here for the last several years. 

Mr. HUNTER. OK. So, looking at your acquisition—ship acquisition, which ships get cut, based on this budget? 

Admiral ZUKUNFT. Yes. We can’t cut any of our programs of 

record. What we—— 

Mr. HUNTER. But you would have to. I mean you are getting—— 

Admiral ZUKUNFT. We would not. 

Mr. HUNTER [continuing]. Reduction. 

Admiral ZUKUNFT. Right now, you know, we have an appropriation for our eighth National Security Cutter. That finishes that program of record. As we go into 2016 we have got to bring the Offshore Patrol Cutter, you know, on to full budget. And I will continue to endeavor, and with the great support that we have had 

from the Department of Homeland Security to get where we need 

to be, because that is my Secretary’s—one of his highest priorities 

is to recapitalize the Coast Guard. 

Mr. HUNTER. I don’t understand, then. How does the budget reflect the Secretary’s highest priority by cutting it? 

Admiral ZUKUNFT. Again, you have seen the same provision. We 

have got about a $70 million gap to go to final design work to 

award the Offshore Patrol Cutter to its—and so the Department, 

as they look at is this affordable, has given me assurances that we 

will look within the Department to raise the Coast Guard to a 

point where we can move forward with the Offshore Patrol Cutter. 

Mr. HUNTER. So you think that, instead of having Congress 

budget out the Offshore Patrol Cutter, and taking the money from 

within DHS when you do a downselect, you think that that is a 

39 

viable—that money coming from DHS is a viable alternative to congressional budgeting? 

Admiral ZUKUNFT. Obviously—— 

Mr. HUNTER. For right now? 

Admiral ZUKUNFT. Yes. From a budgeting process, much more 

preferable to see the full appropriation that we had requested in 

that budget. But we need to move forward with the Offshore Patrol 

Cutter. And I can’t emphasize that enough. By the time that first 

ship is delivered in 2021, it will replace ships that are 55 years old. 

And we can’t let that drag out any more. Or we just abdicate to 

the adversary and say, ‘‘We are not going to use the authorities, 

and the United States, the most powerful Nation in the world, is 

not going to assert its sovereignty using the broad authorities of 

the United States Coast Guard.’’ I will not let that happen on my 

watch. 

Mr. HUNTER. Thank you. Do you think the Coast Guard is tasked 

with doing too much right now? 

Admiral ZUKUNFT. Our authorities resonate very well, and I 

wouldn’t take any one of our authorities away. And this was actually looked at about 100 years ago. Our first Commandant of the 

Coast Guard. They thought, ‘‘Well, hey, if we split the Coast Guard 

up and have other components do it’’—well, first they have to take 

on a maritime capability, they have to understand the authorities. 

But they become one-trick ponies, that is the only thing they do. 

But when you look at what a buoy tender does, it tends buoys, 

it cleans up oil spills, it does law enforcement, search and rescue. 

So when you look at our platforms, they are really multipurpose. 

And the Nation really gets the best bang from the buck from these 

multipurpose platforms because of the authorities that are vested 

in the United States Coast Guard. 

Mr. HUNTER. Thanks, Admiral. Gentlemen, thank you very 

much. Appreciate it. Adjourned. 

[Whereupon, at 12:05 p.m., the subcommittee was adjourned.] 

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