[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]

THE ECONOMIC IMPORTANCE OF SEAPORTS:
IS THE UNITED STATES PREPARED FOR
21ST-CENTURY TRADE REALITIES?

=======================================================================

(112-57)

HEARING

BEFORE THE

SUBCOMMITTEE ON
WATER RESOURCES AND ENVIRONMENT

OF THE

COMMITTEE ON
TRANSPORTATION AND INFRASTRUCTURE
HOUSE OF REPRESENTATIVES

ONE HUNDRED TWELFTH CONGRESS

FIRST SESSION

__________

OCTOBER 26, 2011

__________

Printed for the use of the
Committee on Transportation and Infrastructure

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COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

JOHN L. MICA, Florida, Chairman

DON YOUNG, Alaska NICK J. RAHALL II, West Virginia
THOMAS E. PETRI, Wisconsin PETER A. DeFAZIO, Oregon
HOWARD COBLE, North Carolina JERRY F. COSTELLO, Illinois
JOHN J. DUNCAN, Jr., Tennessee ELEANOR HOLMES NORTON, District of
FRANK A. LoBIONDO, New Jersey Columbia
GARY G. MILLER, California JERROLD NADLER, New York
TIMOTHY V. JOHNSON, Illinois CORRINE BROWN, Florida
SAM GRAVES, Missouri BOB FILNER, California
BILL SHUSTER, Pennsylvania EDDIE BERNICE JOHNSON, Texas
SHELLEY MOORE CAPITO, West Virginia ELIJAH E. CUMMINGS, Maryland
JEAN SCHMIDT, Ohio LEONARD L. BOSWELL, Iowa
CANDICE S. MILLER, Michigan TIM HOLDEN, Pennsylvania
DUNCAN HUNTER, California RICK LARSEN, Washington
ANDY HARRIS, Maryland MICHAEL E. CAPUANO, Massachusetts
ERIC A. ``RICK'' CRAWFORD, Arkansas TIMOTHY H. BISHOP, New York
JAIME HERRERA BEUTLER, Washington MICHAEL H. MICHAUD, Maine
FRANK C. GUINTA, New Hampshire RUSS CARNAHAN, Missouri
RANDY HULTGREN, Illinois GRACE F. NAPOLITANO, California
LOU BARLETTA, Pennsylvania DANIEL LIPINSKI, Illinois
CHIP CRAVAACK, Minnesota MAZIE K. HIRONO, Hawaii
BLAKE FARENTHOLD, Texas JASON ALTMIRE, Pennsylvania
LARRY BUCSHON, Indiana TIMOTHY J. WALZ, Minnesota
BILLY LONG, Missouri HEATH SHULER, North Carolina
BOB GIBBS, Ohio STEVE COHEN, Tennessee
PATRICK MEEHAN, Pennsylvania LAURA RICHARDSON, California
RICHARD L. HANNA, New York ALBIO SIRES, New Jersey
JEFFREY M. LANDRY, Louisiana DONNA F. EDWARDS, Maryland
STEVE SOUTHERLAND II, Florida
JEFF DENHAM, California
JAMES LANKFORD, Oklahoma
REID J. RIBBLE, Wisconsin
CHARLES J. ``CHUCK'' FLEISCHMANN,
Tennessee

(ii)

Subcommittee on Water Resources and Environment

BOB GIBBS, Ohio, Chairman

DON YOUNG, Alaska TIMOTHY H. BISHOP, New York
JOHN J. DUNCAN, Jr., Tennessee JERRY F. COSTELLO, Illinois
GARY G. MILLER, California ELEANOR HOLMES NORTON, District of
TIMOTHY V. JOHNSON, Illinois Columbia
BILL SHUSTER, Pennsylvania RUSS CARNAHAN, Missouri
SHELLEY MOORE CAPITO, West Virginia DONNA F. EDWARDS, Maryland
CANDICE S. MILLER, Michigan CORRINE BROWN, Florida
DUNCAN HUNTER, California BOB FILNER, California
ANDY HARRIS, Maryland EDDIE BERNICE JOHNSON, Texas
ERIC A. ``RICK'' CRAWFORD, Arkansas MICHAEL E. CAPUANO, Massachusetts
JAIME HERRERA BEUTLER, Washington, GRACE F. NAPOLITANO, California
Vice Chair JASON ALTMIRE, Pennsylvania
CHIP CRAVAACK, Minnesota STEVE COHEN, Tennessee
LARRY BUCSHON, Indiana LAURA RICHARDSON, California
JEFFREY M. LANDRY, Louisiana MAZIE K. HIRONO, Hawaii
JEFF DENHAM, California NICK J. RAHALL II, West Virginia
JAMES LANKFORD, Oklahoma (Ex Officio)
REID J. RIBBLE, Wisconsin
JOHN L. MICA, Florida (Ex Officio)

(iii)

CONTENTS

Page

Summary of Subject Matter........................................ vi

TESTIMONY

Anderson, A. Paul, Chief Executive Officer, Jacksonville Port
Authority...................................................... 12
Benjamin, Omar R., Executive Director, Port of Oakland........... 12
Bridges, Jerry A., Chairman of the Board, American Association of
Port Authorities............................................... 12
Darcy, Hon. Jo-Ellen, Assistant Secretary of the Army (Civil
Works), United States Department of the Army................... 12
Friedman, William D., President and Chief Executive Officer,
Cleveland-Cuyahoga County Port Authority....................... 12
Koch, Christopher, President and Chief Executive Officer, World
Shipping Council............................................... 12
Peyton, Peter, President, ILWU Marine Clerks Association Local 63 12

PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS

Brown, Hon. Corrine, of Florida.................................. 49
Hirono, Hon. Mazie K., of Hawaii................................. 53
Landry, Hon. Jeffrey M., of Louisiana............................ 55

PREPARED STATEMENTS SUBMITTED BY WITNESSES

Anderson, A. Paul................................................ 58

Appendix A--Florida Seaports: A Dynamic Economic System,
presentation by Florida Ports Council...................... 67
Appendix B--Excerpts from 2011 JAXPORT Directory: JAXPORT
Overview, Facilities, Cargo Handling, Jacksonville Port
Authority (JAXPORT), 2011.................................. 83
Benjamin, Omar R................................................. 94
Bridges, Jerry A................................................. 98
Darcy, Hon. Jo-Ellen............................................. 106
Friedman, William D.............................................. 111
Koch, Christopher................................................ 114
Peyton, Peter.................................................... 124

SUBMISSION FOR THE RECORD

Gibbs, Hon. Bob, a Representative in Congress from the State of
Ohio, request to submit written testimony by the South Carolina
State Ports Authority.......................................... 8

ADDITIONS TO THE RECORD

Knatz, Geraldine, Ph.D., Executive Director, Port of Los Angeles,
written testimony.............................................. 128

Attachment 1--National Economic Trade Impact Study, Federal
Summary.................................................... 137
Attachment 2--Importers and Exporters by Congressional
District................................................... 167
Attachment 3--President's Export Council Letter.............. 168
Attachment 4--PNRS Congressional Letter...................... 171
Attachment 5--Harbor Maintenance Trust Fund Expenditures,
Congressional Research Service (CRS 7-5700 R41042) January
10, 2011................................................... 174

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THE ECONOMIC IMPORTANCE OF SEAPORTS: IS THE UNITED STATES PREPARED FOR
21ST-CENTURY TRADE REALITIES?

----------

WEDNESDAY, OCTOBER 26, 2011

House of Representatives,
Subcommittee on Water Resources
and Environment,
Committee on Transportation and Infrastructure,
Washington, DC.
The subcommittee met, pursuant to notice, at 10:06 a.m., in
Room 2167, Rayburn House Office Building, Hon. Bob Gibbs
(Chairman of the subcommittee) presiding.
Mr. Gibbs. Good morning. The water and environment
subcommittee will come to order. Welcome.
Today we are having a hearing on the economic importance of
seaports, and if the United States is prepared for 21st-century
trade realities. And I will start my opening statement.
While 95 percent of the Nation's imports and exports go
through the Nation's ports, waterborne commerce is, by far, the
Nation's most ignored mode of transportation. Nearly a third of
the Nation's gross domestic product is derived from
international trade, the bulk of which is waterborne. With more
of our economy expected to be dependent on international trade
in the coming decades, we must begin to prepare our
infrastructure for the future.
Our integrated system of highways, railways, airways, and
waterways has efficiently moved freight in this Nation. But as
we enter a new era of increased trade among our worldwide
trading partners, the Nation's navigation system has struggled
to keep pace. While the ports themselves have done an admirable
job of investing in landslide improvements and enhanced
intermodal connections, the Federal Government has all but
ignored the Nation's navigation channels, the gateways to the
world markets.
In May 2010, the President proposed an export initiative
that aims to double the Nation's exports over the next 5 years.
However, the Corps of Engineers' navigation budget was slashed
by 22 percent over the previous 5 years, and the President,
only requesting $691 million for the Harbor Maintenance Trust
Fund expenditure, the export initiative will not be a success.
In addition, the President's request of a little over $280
million for construction of new navigation projects, this is
almost the same amount as requested for recreation projects,
and almost half of what is requested for ecosystem restoration
projects.
Only if our ports and waterways are at their authorized
depths and widths will products be able to move to their
overseas destinations in an efficient and economical manner.
Since only 2 of the Nation's 10 largest ports are at their
authorized depths and widths, the President's budget does
nothing to ensure our competitiveness in world markets.
Transportation savings are a key factor in economic growth. But
an inefficient transportation system will make U.S. products
uncompetitive in world markets. And if the transportation costs
go up, the competitiveness on American products in the world
market goes down.
So, addressing the infrastructure needs of the Nation's
ports is not about economic benefits to a few shipping
companies, it's about keeping American farms and businesses
competitive, and growing American jobs.
For a tiny percentage of the $1 trillion failed stimulus
program of 2009, or the $450 billion jobs program recently
suggested by the administration, we could spend approximately
$1.5 billion annually in the Harbor Maintenance Trust Fund for
its intended purposes to ensure the Nation's ports are at their
federally authorized depths and widths. Instead, the
administration, through its proposed budget, states that 35
percent of the channel's availability is adequate to ensuring
America's products are competitive overseas. Unless the issue
of channel maintenance is addressed, and--the unreliability and
unresponsiveness of the entire intermodal system will slow
economic growth and threaten national security.
I am a fiscal conservative, but I still believe it is
necessary to invest in America's transportation,
infrastructure, and to stimulate the economy and keep it
strong. Unlike a lot of Government spending, investing in
transportation provides a positive economic return on
investment. We need to make investments in our maritime
infrastructure, and other investments that will multiply jobs
throughout the economy. Many of the recent suggestions that
come from the administration and elsewhere call for
expenditures on projects that simply create short-term
construction jobs with little or no economic benefit coming
from the project being built.
I welcome our witnesses to the hearing today, and look
forward to hearing from each of you. And now I would yield to
Mr. Bishop, our ranking member, for any remarks he might have.
Mr. Bishop. Thank you very much, Mr. Chairman, for holding
this hearing on the economic importance of our Nation's
seaports. I could not agree more with the premise of this
hearing. Seaports are the critical hub of exports leaving and
entering the United States. Nothing could be more important to
our trading and economic balance than to ensure that our
seaports are prepared to handle cargo and create jobs.
Twice in the last 5 months we have held hearings on issues
in legislation associated with our maritime and inland waterway
systems. We have heard from witness after witness about the
importance of maintaining our waterway transportation system. I
get it. And I think we all agree that more needs to be done.
The problem that I am struggling with is how we are going to
meet the needs under the present constraints that we are
operating under.
As I have looked over the testimony from our witnesses
today, I am struck by three consistent themes. The first theme,
that in order to prepare for a shipping world where the cost of
shipping and the timing of getting the commodities to market,
or the market drivers, we need seaports that can support the
shipping carriers of the future, along with the land-side
infrastructure to quickly and efficiently move the cargo from
ship to rail, trucks, or airplanes, and out of the--out to the
intended industries.
The second theme is that ports create jobs, lots of jobs,
both directly loading and unloading ships, and indirectly,
through the moving and distributing of the commodities from
port to destination. If the seaports lose capacity, or cannot
handle the bigger container ships, then ships and jobs go away
to Canada, Mexico, or other ports that will support them.
The third theme is that we need to find a more efficient
and timely way to fund and support our seaports. The Harbor
Maintenance Trust Fund, the U.S. Army Corps of Engineers
operation and maintenance, and Corps construction programs,
along with private partners, have historically stood together
to find ways to meet the seaport needs of our country. This is
where I'm having the problem.
Under the 112th Congress, the Republican majority pushed to
cut over $500 million, or 10 percent, in fiscal year 2011 from
an already-strained Corps budget. Included with this overall
cut, H.R. 1, which was passed--which passed the House of
Representatives, proposed to reduce the Corps construction
account by over 16.8 percent over the previous fiscal year's
level.
The fiscal year 2012 budget follows the same trend. The
House passed funding bill for the Corps further reduces the
level of funding for the Corps by 11.5 percent, when compared
to fiscal year 2010 levels, including a remarkable cut of 20.5
percent to the Corps' construction account. I have heard my
majority colleagues suggest that somehow the Corps should be
doing more with less. However, I don't understand how shifting
money around without having the discussion about the overall
impact of the Corps budget is good for anybody. Someone's ox is
going to get gored.
Contrast this with the recent jobs proposal of President
Obama, which calls for an increase in investment for our
Nation's infrastructure, including its wastewater and drinking
water infrastructure, as well as commercial ports, levees, and
projects on the inland waterway system. We need to get our ship
back on an even keel, with leadership, sound policy, and
investments in the programs and infrastructure that keeps our
country moving forward.
I hope that today we can all concur in our support for
increasing expenditures from the Harbor Maintenance Trust Fund.
That seems to be without question. However, the broader
agreement does not address the reality that unless we increase
the overall investment in the Corps of Engineers, we cannot
increase the funding for harbor dredging and channel
maintenance, without impacting other Corps construction or
maintenance or restoration projects. The mantra of doing more
with less makes for a great bumper sticker, but makes for
terrible public policy, especially when considering the large
number of jobs and the impact to our Nation's economy. We
simply can't have it both ways.
We all understand the terrible spot we are in with the
national financial picture. It is not pretty, and it will not
be fixed overnight. I would contend that doing more with less
with respect to our seaports and waterway infrastructure harms
our Nation and makes the outcome we all seek--that is to say,
fiscal sustainability--more elusive for several reasons.
First, it directly impacts millions of jobs across the
Nation, by one count potentially jeopardizing over 13 million
jobs.
Second, it has substantial negative impact on local
economies and the bottom line of industries, including both
large and small businesses, and the employees they support.
Lastly, it reduces our Nation's ability to compete in a
global trade economy.
I am glad we are having this conversation today, because it
allows us to highlight the problem that we are having, our
inability to have an open and expansive dialogue on how we move
forward from the quagmire we find ourselves stuck in. While we
bicker about congressional earmarks and cutting back on all
forms of regulation and agency budgets, the seaports continue
to silt in, our shipping channels continue to shoal and narrow,
and our infrastructure falls apart from age and neglect.
The result is that more and more of the shippers of the
world are looking to other countries to move their goods and
services. We have to prepare for the future world of shipping
and seaports. We have to protect our economy and our jobs. We
have to think smarter and more strategically, in terms of
integrating sea shipping with rail, roads, and air distribution
systems. We cannot do this without having an integrative and
strategic approach. To do otherwise would be, in my opinion,
foolish and a real waste of an opportunity to provide the
public with the leadership they are demanding.
I stand ready to have that discussion, and encourage my
colleagues and the administration to sit down and get to
solving the problem, rather than just arguing about our
problems and pointing fingers with respect to who caused them.
I yield back the balance of my time.
Mr. Gibbs. Representative Shuster for an opening statement?
Mr. Shuster. Thank you, Mr. Chairman. I will be real brief.
I appreciate all the witnesses being here today, and look
forward to hearing from them, but I also want to thank the
chairman and the ranking member for holding this hearing.
And, as the ranking member said, our ports are extremely
critical to the well-being of this Nation. When you're talking
about trade, you think about the ports, but also the connection
of the ports to the rest of the Nation. And I know I've been to
the Port of Los Angeles, the Port of Houston, and places up and
down the east coast. And for instance, the Port of Los Angeles,
about 40 percent of our goods come in there, and a third of
them--almost a third of them--go east to the Mississippi. I
don't have a port, per se, in my district, but of course, the
ports of this Nation serve my district, whether we are
importing or exporting.
So it is extremely important that we are not only looking
at our ports, but how they connect to the rest of the United
States, to make sure that it is a system, it is a national
system that we can have a movement of goods that are unimpeded
across this Nation, whether it is highways, rail, inland
waterways, all extremely important.
I think also an important component of this is to
streamline. And I know that there are some, like the ranking
member--with all due respect, doing more with less is possible.
And, in fact, I believe it is the first step we need to do, is
to do more with less. I am all for doing more with more, but
there are some here that want to do less with more, more money,
and we have all the same regulations. We are not going to do
more; we are going to have the bureaucracy and the lawyers in
this country continue to gobble up more of our money.
So, we need to streamline first. Let's get the streamlining
in place so that we can do more with less. And at some point,
again, I think we can all come together and say, ``Let's do
more with more.''
So, with that, Mr. Chairman, thanks for holding this
hearing, and I yield back.
Mr. Gibbs. Representative Napolitano, proceed.
Mrs. Napolitano. Thank you, Mr. Chairman. And thank
yourself, Chairman Gibbs, and Ranking Member Bishop, for
holding this hearing.
And I agree with my colleague, Ranking Member Bishop. We
must invest in our ports.
The Harbor Maintenance Trust Fund is an important tool to
rebuild our harbor infrastructure. The intent of it is for
shippers to pay a fee that is spent--supposed to be spent--on
maintaining the harbors that the shippers use. Unfortunately,
that is not the case. It is not operating in a fair or
equitable manner.
The harbors must pay into the trust fund--they pay in to
receive a very small fraction in return to maintain their
harbors. The top 10 harbors in the U.S. collect 70 percent of
the trust fund revenues, although they receive only 16 percent
of those expenditures. This inequality has led to the busiest
U.S. harbors that pay the most into the system being
drastically undermaintained, and we are facing a loss to Canada
and Mexico in the meantime, especially as the new super-tankers
are requesting ports that are not maintained sufficiently to
allow them to berth.
The U.S. Army Corps of Engineers estimates that the
Nation's busiest 59 ports are maintained to only 35 percent of
authorized depth. The situation can increase the cost of
shipping as vessels carry less cargo in order to reduce their
draft, or they wait for high tide before transitioning into a
harbor. This can also increase the risk of a ship grounding or
a collision, possibly resulting in an oil spill.
According to CRS, only 30 to 45 percent of these revenues
are being spent in harbors that shippers even use. Assessing a
fee on shippers and then distributing the revenues mostly or
entirely for the benefit of other users undermines the trust
fund and its intended use, and the user fee concept.
Our Los Angeles and Long Beach harbors, which--both are not
in my area, but that's the Alameda Corridor that goes right
through my area--receive less than 1 percent of the funds they
pay into the system. Mr. Chair, 1 percent is not exactly
equity.
Seattle and Tacoma receive about 1 percent of the funds
they pay into the system. The harbors of New York, Boston,
Houston, receive less than 25 percent of the funds they pay
into this system. And they end up going to the competitor
ports. This situation is incredibly unfair. This would be as if
the Government assessed a fee on McDonald's and gave the money
to Burger King to build better restaurants. We must fix the
problem. Money shippers pay into the fund should be spent
entirely on maintaining the harbors they are--use.
Additionally, we should also expand the in-water uses of
the Harbor Maintenance Trust Fund. Those funds should pay for
harbors over 45 feet in depth, if those harbors are financing
the fund. The fund should pay for berth dredging, as well.
There are many issues concerning this, and I trust that we
will continue to look at this, and maybe get a little bit
better equity for those harbors that actually need it to be
able to continue bringing business to the U.S. ports, instead
of going to other ports throughout the Nation--or I mean
throughout the world.
I thank you. And I am talking about Mexico and Canada. Mr.
Chair and Ranking Member, thank you again, and I yield back.
Mr. Gibbs. Representative Richardson?
Ms. Richardson. Thank you, Mr. Chairman. First of all, I
want to welcome Mr. Peyton, who is from my district. It is
always good to see you here, and we are looking forward to your
testimony, and the insight, that you are going to help this
committee, as we go forward.
Mr. Chairman, I want to thank you for convening this
hearing to look at the preparedness of our Nation's seaports,
and the economic implications.
One of my top priorities since I've been in Congress has
always been to ensure that our country's ability to move goods
is second to none. Forty percent of all the goods entering or
leaving this country travel through my district. I doubt that
there is a more transportation-intensive area in this entire
country. With three new recently signed free trade agreements
only stresses the point that we need to invest in our Nation's
seaport infrastructure.
It is also kind of ironic that we had the recent
introduction of the Mexican truck pilot program, as well. And
with the definite oncoming of the Panama canal and many of the
other areas, for us not to be having a serious discussion of
how we can remain competitive in this marketplace is a mistake.
I will tell you that seaport infrastructure is particularly
important, because when you consider the port complexes that I
reside in, nothing is more important than being able to move
the goods through, and to keep people working, and to do that
in a safe environment for our community.
Time and time again, we have fought for reforms to allow
our Nation's infrastructure to become a top-tier system for the
movement of goods, while we watch China and many other
countries make huge investments while we fight for pennies of
an increase on a gas tax.
I concur with my colleagues of must having reform having to
do with the Harbor Maintenance Trust Fund, which is clearly not
working, and the funds are not being utilized in the intent of
what it was originated. When you have groups like the Chamber
of Commerce, the American Council of Engineering Companies, the
National Transportation Policy Center, ILWU, Associated General
Contractors of America, American Public Transportation
Association, and the American Association of State Highways all
calling for proper funding for infrastructure, and when this
Congress fails to do so, something is wrong.
We need to focus on looking at not only the funding
mechanisms, which is critical, but a commitment by this
committee that we move forward on the transportation bill, and
properly fund the programs that are going to help us move the
goods throughout this country.
As I get ready to close, I also want to speak to, in this
committee, looking at how the--for example, we have Mr. Peyton
here, who is with us today, and also with the port authorities,
of how some of the jobs that are being done in the ports are
first responders, as well, and your role in security with the
seaports, and how we might better assist you in being able to
be prepared for that.
With that, Mr. Chairman, I thank you for the work that you
have already shown, and we look forward to really passing a
bill that can be helpful and can allow our seaports to be
competitive. I yield back the balance of my time.
Mr. Gibbs. Thank you. A little housekeeping here. I ask
unanimous consent for a statement from the South Carolina Ports
Authority to be included in the record.
[No response.]
Mr. Gibbs. Hearing none, so ordered.
[The information follows:]

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Mr. Gibbs. Well, I want to welcome our panelists. I will
just quickly introduce them, and then we will start.
We have Honorable Secretary of Army Works, Jo-Ellen Darcy.
We have Mr. Jerry Bridges, the chairman of the board of the
American Association of Port Authorities; Christopher Koch,
president of the World Shipping Council; Paul Anderson, the
chief executive officer of the Jacksonville Port Authority;
Omar Benjamin, the executive director of the Port of Oakland;
and William Friedman, president and chief executive officer of
the Cleveland-Cuyahoga County Port Authority. And that is
Cleveland, Ohio. Welcome. And Mr. Peter Peyton, he is president
of the ILWU Marine Clerks Association.
Welcome. And, Ms. Darcy, the floor is yours.

TESTIMONY OF THE HONORABLE JO-ELLEN DARCY, ASSISTANT SECRETARY
OF THE ARMY (CIVIL WORKS), UNITED STATES DEPARTMENT OF THE
ARMY; JERRY A. BRIDGES, CHAIRMAN OF THE BOARD, AMERICAN
ASSOCIATION OF PORT AUTHORITIES; CHRISTOPHER KOCH, PRESIDENT
AND CHIEF EXECUTIVE OFFICER, WORLD SHIPPING COUNCIL; A. PAUL
ANDERSON, CHIEF EXECUTIVE OFFICER, JACKSONVILLE PORT AUTHORITY;
OMAR R. BENJAMIN, EXECUTIVE DIRECTOR, PORT OF OAKLAND; WILLIAM
D. FRIEDMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER, CLEVELAND-
CUYAHOGA COUNTY PORT AUTHORITY; AND PETER PEYTON, PRESIDENT,
ILWU MARINE CLERKS ASSOCIATION LOCAL 63

Ms. Darcy. Thank you, Mr. Chairman and distinguished
members of the subcommittee. I want to thank you for the
opportunity to testify on the economic importance of our
seaports in preparation for the 21st-century trade realities.
The Corps of Engineers facilitates commercial navigation by
providing support for safe, reliable, highly cost-effective and
environmentally sustainable waterborne transportation systems.
To this end, the Corps invests over $1.5 billion annually,
roughly one-third of the total budget for the Civil Works
Program, to study, construct, replace, rehabilitate, operate,
and maintain commercial navigation infrastructure for
approximately 13,000 miles of coastal channels and 12,000 miles
of inland waterways.
Our coastal ports contribute to the Nation's economic
competitiveness, as well as to State and local governments'
economic development and job creation efforts. They handle over
2 billion tons of commerce annually, including over 70 percent
of the imported oil and more than 48 percent of goods purchased
by American consumers.
In some cases, the dredging of Federal navigation channels
also provides environmental benefits, where the dredged
material is used to create, preserve, or restore wetlands,
islands, or other habitats.
We are working with the Department of Transportation to
improve decisionmaking on Federal investments in coastal
navigation infrastructure through better coordination. For
example, the Department of Transportation has provided
information on previous years' selected TIGER Grant recipients
to the Corps, which we are considering as part of the Civil
Works budget preparation. Similarly, the Department of
Transportation has invited Corps technical experts to advise
them during the upcoming review process for the 2011 TIGER
Grant selections.
Many of the world's shipping companies are constructing
larger, more efficient container vessels that require channel
depths from 50 to 55 feet. The new Panama Canal locks are
scheduled for completion in 2014 and will increase the
permissible draft of vessels transiting the Panama Canal from
39.5 feet to 50 feet.
On the Atlantic Coast, the United States now has two 50-
foot-deep ports capable of receiving these ships: Norfolk and
Baltimore. The Corps expects to complete deepening of the Port
of New York and New Jersey to 50 feet by the year 2014. The
Corps is also working with the Port of Miami, which is
financing a project to deepen the Federal channel to 50 feet.
The ports of Los Angeles, Long Beach, Oakland, Seattle, and
Tacoma also have depths of 50 feet or greater.
The United States also has several other ports with depths
of 45 feet on the Atlantic, Pacific, and gulf coasts, which
will be able to accommodate such vessels when they are less
than fully loaded.
The President's fiscal year 2012 budget includes $65
million for the ongoing deepening of the Port of New York and
New Jersey, $42 million for construction or expansion of
dredged material placement facilities at the ports of Norfolk,
Savannah, Jacksonville, and Tampa, in order to continue the
maintenance of the deep draft channels serving these ports. And
we have $600,000 for preconstruction engineering and design for
the proposed deepening of the channel in Savannah Harbor.
The Corps is also working with 10 ports on the Atlantic and
gulf coast to evaluate proposals to deepen or widen their
channels. The Civil Works Program to date is focused on the
operation, maintenance, repair, and replacement of major
navigation, flood control, and hydropower infrastructure
systems, and the restoration of aquatic ecosystems that past
Corps projects have affected. The overall budget for the
program is primarily devoted to maintaining these systems, so
they can continue to provide economic, environmental, and
social benefits to the Nation.
The fiscal year 2012 budget for the Corps includes $758
million from the Harbor Maintenance Trust Fund to support the
maintenance of our coastal harbors and their channels, and
related work, including maintenance dredging. This is
comparable to the enacted fiscal year 2011 level. To make the
best use of these funds, the Corps evaluates and establishes
priorities, using objective criteria, including transportation
cost savings, risk reduction, and improved reliability, all
relative to the cost.
Consequently, maintenance work generally is focused more on
the most heavily used commercial channels, which together,
carry about 90 percent of the total commercial cargo traveling
through our coastal ports. However, many ports will experience
draft limitations on vessels due to channel conditions at least
during part of the year.
In summary, the Corps supports commercial navigation by
providing for safe, reliable, highly cost-effective and
environmentally sustainable waterborne transportation systems.
Through the Corps and other Federal agencies, the
administration is investing in our ports. As part of the
administration's broader strategy of economic growth for our
Nation, the Corps has been working to deepen and widen several
of our ports.
Mr. Chairman and members of the committee, I look forward
to working with the subcommittee on these issues. Thank you.
Mr. Gibbs. Mr. Bridges, welcome. The floor is yours.
Mr. Bridges. Thank you, Chairman Gibbs and members of the
subcommittee, for this opportunity to testify on the economic
importance of seaports to trade, and how the United States can
be poised for future growth.
Today's discussion is very timely, as Congress debates how
to create jobs while controlling Government spending over the
next decade. I am here today on behalf of the American
Association of Port Authorities, where I serve as chairman of
the board. We were founded over 100 years ago. AAPA promotes
the common interests of ports and provides leadership on trade,
transportation, and environment.
Since the birth of our Nation, U.S. seaports and waterways
have served as a vital economic lifeline, delivering prosperity
to our Nation. Today ports move 99 percent of our country's
overseas cargo. International trade account for more than a
quarter of the American domestic gross product. For every $1
billion in exports shipped through seaports, 15,000 U.S. jobs
are created.
As we recover from the current economic downturn, we must
make investments today to address future trade realities. We
face many challenges and many opportunities, such as the
expansion of the Panama Canal, the growth in ship size, the
hemispheric competition related to imports, exports, and
maritime jobs, the growth--the goal of increasing U.S. exports,
new trade agreements, and the 30 percent growth in U.S.
population.
So, are we ready? I am not sure. The ports are planning for
the future, but the Federal Government has, unfortunately, not
kept pace. The Federal Government has a unique constitutional
responsibility to maintain and improve infrastructure that
enables the flow of commerce, and much of that infrastructure
in and around seaports have been neglected for too long. Many
of our land and water connections are insufficient and
outdated, affecting the port's ability to move cargo
efficiently. This diminishes U.S. business, hurts U.S. workers,
and impairs our national economy.
So, what must we do? The Federal Government must make
funding of dredging a higher priority. Number two, Congress
must pass a surface transportation bill with more funding for
ports, freight, and land-side infrastructure, including TIGER
programs. And Congress must not cut or eliminate port security
grant programs, environmental programs that benefit ports.
I will focus the remainder of my time on U.S. dredging
programs, since this is within the jurisdiction of this
subcommittee.
Federal investments are needed to modernize and maintain
Federal navigational channels. As you know, port users
currently pay 100 percent of the cost to maintain our harbors
through collections of the Harbor Maintenance Tax and cost
sharing formulas. While the President's fiscal year 2012 budget
calls for $758 million for harbor maintenance dredging, the
trust fund revenues for fiscal year 2011 was $1.48 billion.
Revenue is almost double what is currently being spent. This is
truly unfair taxation, especially since fewer navigational
channels are at their authorized depth or width. This injustice
must be corrected.
We encourage you to work with congressional leadership on
the permanent HMT solution, not only encourage for use, but
also provide the funds to make this a reality.
We also encourage you to weigh in on the House
appropriators who are currently considering the 8 percent
decrease in this year's maintenance budget, despite the large
and growing surplus in the Harbor Maintenance Tax fund.
Another troubling trend impacting our preparedness for
future challenges is the time it takes to complete new
projects. This new norm is decades, and costs rise with each
delay. Impediments include long, slow approval process and
small amount of available funding to reduce--that has reduced
the Corps' capability to provide full services to ports. Port
modernization must become a higher priority; today the most
cost-effective way to move cargo is on the American marine
highway. Federal investments should encourage this.
Our Nation's ports are at a defining moment, facing
enormous challenges and opportunities. Ports are making
necessary investments to build and maintain world class
maritime facilities in a transportation system to support U.S.
jobs, our global competitiveness, and our economy. We need our
Federal partner to make this vital commitment also.
We commend you and your staff for drafting the maritime
title for the surface bill, and it includes several provisions
that will aid getting projects done more quickly. We urge your
committee to serve as advocates for port infrastructure, and
meet challenges of today and tomorrow. Thank you.
Mr. Gibbs. Thank you. Mr. Koch, welcome. The floor is
yours.
Mr. Koch. Thank you, Mr. Chairman. On behalf of the World
Shipping Council, which represents the liner shipping
industry--the ocean carriers that carry much of the Nation's
commerce, we appreciate the subcommittee's review of these
issues today. I have given a more complete set of comments in
my written testimony. I won't try to repeat that here. There is
a common set of themes I think you will hear from the panel's
testimony today, and I will try not to be redundant with those,
either.
There is not a single issue involved in addressing the
questions you are trying to deal with today. The chart that I
put in my statement illustrates that where the private sector
owns the Nation's critical transportation infrastructure, there
is generally not an existing capacity problem or shortage of
necessary investment capital, despite the enormous capital
requirements. The ports are investing, terminal operators have
invested, rail carriers have invested, ocean carriers have
invested. The capacity problems tend to rise more often with
those portions of the critical infrastructure that are owned by
the Government, such as locks and dams, harbor channels, and
the efficient connections for freight to the national highway
system.
There is a lot of variability that one deals with in trying
to plan for the future. The recession of 2008 and the economic
doldrums we have been in have actually bought us some time
because volumes today still are not what they were at in 2008.
But, for the long term, there is no question what we have to do
as a Nation. We have to invest in the infrastructure necessary
to support future population growth, and future economic
growth.
In my testimony, as requested by the staff, I have
addressed a number of questions that arise in trying to figure
out what the effect of the Panama Canal's new locks will be on
the port infrastructure system, and the services that call
there. I won't repeat those, but will be happy to answer any
questions, should the subcommittee have those later on.
What I would simply like to summarize is that today some
ports' infrastructure clearly can accommodate large vessels
being built, and more will be able to accommodate these ships
when current dredging expansion projects are complete. The
major U.S. east coast and gulf ports are in various stages of
readiness to handle larger ships and the larger volumes with
approved highway and rail intermodal connections. Mr. Bridges'
port in Virginia is the most ready of the east coast ports.
But the Army Corps of Engineers port deepening program is
an important part of future infrastructure capacity. The
Nation's major ports are critical enablers of the economic
health of the country, and their ability to continue serving in
that role and handling the growth of the American economy
should not be impaired by aspersions they are inappropriate
earmarks, aspersions that undermine an otherwise appropriate
funding process.
That portion of the critical maritime infrastructure that
the Government owns, including the highway connections,
deserves the subcommittee's and the Congress' continued
attention and investment. The committee's continued efforts to
enact a long-term highway reauthorization bill that includes
due recognition of freight transportation, and the committee's
continued support for the Army Corps of Engineers channel
deepening and maintenance projects are both important to making
sure that American commerce will continue to have efficient and
competitive access to world markets. Thank you, Mr. Chairman.
Mr. Gibbs. Thank you.
Mr. Anderson, welcome. Proceed.
Mr. Anderson. Thank you, Chairman Gibbs, Ranking Member
Bishop, and the distinguished members of the subcommittee. It
is really an honor today to speak on this subject, having an
indepth perspective on today's hearing as a former Federal
maritime commissioner and as the current CEO of Jacksonville,
Florida Port Authority, known as JAXPORT.
First, I commend Chairman Mica and Ranking Member Rahall
for their leadership in looking at improving the health of
America's seaports, and working to ensure our gateways will
support the economic health of our Nation's ports for
generations to come.
U.S. seaports play a critical role. More than 13 million
Americans work in international trade, trade accounting for
more than a quarter of the U.S. gross domestic product. Nearly
all of that cargo, imports and exports, is carried by ship.
With volumes expected to double in the next 20 years, we must
step up investment in our ports today. This growth will not be
experienced equally across the American seaport regions of the
Pacific, the gulf, and the east coast.
Mounting economic pressures have shippers demanding more
efficient networks, new trade routes focused on the U.S. east
coast, expansion of the Panama Canal, and innovations and
logistics are influencing the movement of cargo in dynamic
ways.
JAXPORT and north Florida region are at the center of these
trends. Our new MOL TraPac container terminal is ready--is
already serving container ships sailing through both the Panama
and the Suez Canals, and has doubled our capacity to handle
containers. Once Hanjin Shipping Company of Seoul, Korea, opens
its own container terminal, JAXPORT will have tripled its
container handling capacity in one short decade, adding 90,000
jobs to a region with double-digit unemployment today.
However, TraPac does not offer the Federal channel depth
required by the larger ships it serves, so they come in light-
loaded. This means fewer cargo moves, fewer jobs, higher
transportation costs, costs that are passed on to the American
consumer. Without a deep harbor, it will be incredibly
difficult for TraPac to maximize their $200 million investment.
Hanjin stands ready to invest an additional $300 million in
private sector dollars, but continues to wait, also wondering
if America will commit to investing in its own waterways.
I have serious doubts that we will be ready for the larger
ships, because of the delays in the Nation's process and
overarching regulatory process, including the U.S. Army Corps
of Engineers, and also here in Congress. I can tell you from
first-hand frustrating experience, harbor project sponsors wade
through an approval, authorization, and appropriation process
that is muddy, at best, and face constantly changing
requirements, making it nearly impossible to move forward. Our
country can clearly do this better, especially when American
jobs and competitiveness are at stake.
I propose a multifront attack on this challenge, along with
the American Association of Port Authorities and my fellow
colleagues here today. We have helped develop recommendations
for expediting the Corps process. We need to insist that those
changes be adopted and adhered to.
Further, I urge the passage of H.R. 104. You've heard from
every witness up here today on the Harbor Maintenance Trust
Fund, so I will pass on commenting further.
I also ask that you support proposed language in the
surface transportation bill which will seek to streamline the
process for getting port projects done.
For whatever reason, it has rarely resonated with our
Federal leadership that our economy is inescapably linked to
our waterways and international trade. We are so accustomed to
our reliable delivery system for goods that we take it for
granted. If our consumer products get stuck on the docks
because we lack the infrastructure to move them--or worse,
because of a catastrophic failure--from lack of strategic
investment, such as the bridge collapse in Minnesota in 2007,
it will be unforgivable.
With strategic investment now, our national recovery will
come by sea. Are we going to increase export volumes in the
next decade? How will we move that cargo without investing
significantly in our Nation's gateway infrastructure?
Harbor improvements are not pork barrel, and they are not
legislative gifts. The Nation's deep water port system is
fundamental to our country's long-term economic health. To
realize the maximum positive impact, we must start investing in
our gateway infrastructure. We must be building the ports of
the future today.
Thank you for the opportunity to testify.
Mr. Gibbs. Thank you. Mr. Friedman, welcome.
Mr. Friedman. Thank you, Chairman Gibbs and members of the
committee, for this opportunity to come before you on this
critical topic.
For nearly 25 years, I have worked at tidewater and inland
ports and on real estate development tied to the global supply
chain. I am here today representing the Cleveland port only,
but I believe my views are consistent with those of maritime
professionals throughout the Great Lakes St. Lawrence Seaway
region.
First, let me thank you and your colleagues for initiating
several bills that are critically needed in the Great Lakes and
nationally. These are H.R. 2840, the Commercial Vessel
Discharges Reform Act of 2011; H.R. 1533, the Short Sea
Shipping Act of 2011; and H.R. 104, the Realize America's
Maritime Promise Act. All 3 bills would better prepare our port
and others for 21st-century trade realities.
The Great Lakes St. Lawrence Seaway system is a major
economic resource and trade corridor with vast, unrealized
potential. It provides direct waterborne connections between
our manufacturing and agricultural heartland, and the global
marketplace. An economic benefit study released just last week
documents the value of the Great Lakes St. Lawrence Seaway
system. On the U.S. side alone, system shipping generates
128,000 jobs, $9.6 billion annually in personal income, $18.1
billion annually in business revenue, and more than $2.6
billion annually in Federal, State, and local taxes.
In Greater Cleveland, maritime commerce supports almost
18,000 jobs and more than $1 billion in paychecks cashed every
year. Our cargoes include raw materials and finished goods that
are dependent on our maritime highways. Iron ore from Duluth is
shipped on thousand-foot Great Lakes vessels to our local steel
mill, the most productive, integrated steel facility in the
world, and massive pieces of industrial equipment made in Ohio
and neighboring States are exported from our port to the world.
Waterborne transport to and from the industrial Midwest has
proven to drive down shipping costs and make exports more
competitive, while easing congestion on our highways and rail
networks. Yet, despite these benefits, the promise of the St.
Lawrence Seaway, one of the great engineering wonders of the
world, has yet to be fully realized, and both the system and
our ports are vastly underutilized.
Reform of Federal regulations and policies must occur for
the Great Lakes to play its intended role as a critical gateway
for U.S. exports and trade.
First, we need passage of the Short Sea Shipping Act. I
find it astonishing that Canada is our number one trading
partner, yet virtually none of this trade is moved by water
across the Great Lakes. Current law puts the Great Lakes at a
disadvantage. This is why we urge passage of H.R. 1533, to put
waterborne transport on an even playing field with land modes.
The lack of Federal ballast water standard also threatens
current and future Great Lakes Seaway trade. As you know,
ballast water discharge is regulated by two Federal agencies
under two separate authorities, one of which allows States to
do whatever they want. This has given rise to New York's
utterly unworkable ballast water rule, which will effectively
shut down seaway shipping if it goes into effect next year,
jeopardizing tens of thousands of jobs. H.R. 2840, the
Commercial Vessel Discharges Reform Act, will rectify this
deplorable state of affairs. And again, we strongly urge its
passage.
Lastly, I want to comment on dredging and the U.S. Army
Corps of Engineers project delivery system. In Cleveland we are
working extremely hard to plan and implement a new approach to
managing material dredge from our shipping channel. In essence,
we want to put sediment to beneficial use, rather than dispose
of it in landfills along our downtown waterfront. We believe
this approach is smarter, more efficient, and less expensive
for taxpayers.
We are prepared to commit local dollars, seek contributions
from private beneficiaries, and take over project management
from the Corps to accomplish this. However, this Corps'
authorities, rules, and practices make this a difficult and
years-long process. Therefore, we urge Congress to take up a
comprehensive reform of WRDA and other relevant laws to usher
in 21st-century management of water resources.
We urge you to rewrite laws to first, spend 100 percent of
the Harbor Maintenance Trust Fund on harbor maintenance, as
H.R. 104 provides. Second, allow multiyear reauthorizations to
provide for predictable funding for projects. Third, allow non-
Federal sponsors to directly manage projects without waiting
for project delivery by the Corps. And, fourth, substantially
shorten the timeframe for Federal planning and decisionmaking
on navigation and water resource projects.
We believe our ports and local sponsors are, in many cases,
best positioned to manage harbor maintenance and improvement
projects. This will save scarce public dollars, get projects
online faster, and ultimately drive job creation by making our
Nation more competitive.
Thank you again for allowing me to come before you today.
Mr. Gibbs. Thank you.
Mr. Benjamin, welcome.
Mr. Benjamin. Good morning. Thank you, Chairman Gibbs,
Ranking Member Bishop, and committee members, for holding this
hearing today to focus attention on the critical role that
seaports play in our Nation's economy, and how we can support
and enhance international trade opportunities. I also want to
thank committee members Shuster, Richardson, along with Mica
and Denham for their recent listening tour in California, and
their willingness to share insight from our community.
I am Omar Benjamin, executive director of the Port of
Oakland. I also serve as president of the California
Association of Port Authorities, and was recently appointed to
serve on the Secretary of Transportation's port advisory
committee, which is part of the Marine Transportation System
National Advisory Council.
The Port of Oakland is the third busiest container port on
the west coast, and the fifth busiest in the Nation. We are
also one of the leading export gateways for American products,
especially for agricultural goods from throughout the Nation.
Over $7.1 billion in U.S. agricultural products are shipped
through the Port of Oakland annually, helping to maintain a
nearly 50:50 ratio of import and export activity and
positioning us to support national efforts to increase exports
and put Americans back to work.
America's ports do not just create jobs within their local
regions, but instead distribute their economic impact
throughout the entire Nation. Over 70,000 jobs in the Northern
California mega-region, and more than 800,000 jobs across the
country are impacted by the Port of Oakland's activities.
For example, in Chairman Gibbs' home State of Ohio, $385
million worth of goods are imported and exported through the
Port of Oakland, helping to generate over 3,500 local jobs in
Ohio. In Ranking Member Bishop's home State of New York,
Oakland's activities sustain over 25,000 jobs and $2.7 billion
worth of cargo.
Through the activities of our customers and tenants, we
create local, State, and national tax revenues. The Port of
Oakland, however, along with our counterparts in the Pacific
Northwest and the Pacific Southwest is facing unprecedented
competition from our neighbors in Canada and Mexico. Both
countries are developing comprehensive national freight
shipping programs supported by all levels of Government, and
specifically designed and tailored to divert the trade that
goes through U.S. west coast ports.
Canada especially offers direct rail connections to the
Midwest through the Port of Prince Rupert that allows shippers
to avoid paying the Harbor Maintenance Tax, thereby creating an
uneven playing field for attracting international trade. The
U.S. stands to lose tax revenues and jobs if these trends
continue.
The Port of Oakland, along with its sister ports in Long
Beach, Los Angeles, Portland, Seattle, and Tacoma have formed
the U.S. west coast collaboration to elevate the importance of
U.S. west coast ports' competitiveness and address national
policy concerns, such as the land border loophole I just
described. Our rail labor and terminal operator partners have
also joined with us to preserve job creation and economic
benefits of our investments in operations.
While we recognize that the expansion of the Panama Canal
will have significant implications for ports and communities
throughout the Nation, we do not take for granted that expanded
all-water service to the east coast will achieve the
anticipated demand levels that would require dramatic
readjustment of Federal maritime investment priorities.
Cargo volumes post-2014 will be dependent on numerous
variables, including the impact of as-yet undisclosed transit
fees through the canal. Significant additional research, and a
better understanding of the supply chain needs of individual
shippers will be required before any conclusion can be reached
that might dictate how we spend limited Federal dollars.
What we can agree on is that all--that the improvements in
rail, road, and deep water access are all critical to an
effective transportation system that delivers jobs, economic
growth, and long-term benefits for the region, State, and
Nation. Yet what is lacking is a coordinated national goods
movement strategy and funding mechanism that can address these
multiple modes of transportation in a clear, consistent, and
reliable manner. This coordinated Federal strategy can help
prioritize spending and protect the significant Federal
investments that have already been made in what are essentially
national assets.
In the absence of such a strategy, the Port of Oakland and
its partners are doing our part to prepare for the future,
building on public-private partnerships, extending the supply
chain into China, and investing in our infrastructure.
As Congress continues to contemplate and develop important
transportation priorities as the surface transportation
reauthorization and the water resources development
legislation, I would urge you not to forget the role of ports
and related goods movement partners in delivering economic
growth and prosperity. We greatly appreciate the limited
investment programs that seaports have recently had access to,
such as the TIGER competitive grant program. But it clear that
more remains to be done, and such efforts need to be expanded
and made more robust, so that seaports can participate more
fully in the Federal transportation funding system.
Additionally, existing streams such as the Harbor
Maintenance Trust Fund must be fully unlocked, as has been
mentioned by my colleagues here today.
In conclusion, we appreciate the increased focus and
attention on the role of seaports in delivering economic
growth. We are now working cooperatively like never before to
increase cargo volumes and grow our economy. But we cannot
compete and win if we do not do so in having a partner in the
Federal Government. And we are ready to confront these new
trade realities, but we cannot go alone. And it is only with
your help will we be successful.
Thank you, and we look forward to working with you and the
committee.
Mr. Gibbs. Thank you.
Mr. Peyton, welcome. The floor is yours.
Mr. Peyton. Thank you. Mr. Chairman, thank you for inviting
me to testify on behalf of our international president, Robert
McEllrath, and the 65,000 members of the International
Longshore and Warehouse Union, otherwise known as the ILWU. We
are based in San Francisco. Our union represents longshore
workers in California, Oregon, Washington, Alaska, Hawaii,
Canada, and Panama, as well as warehouse, maritime,
agriculture, hotel, and resort workers.
You have our written testimony; I am going to do this a
little differently, because I think there has been a lot of
things said, and some very good things written, but I would
like to take it from another angle, and try to paint a picture,
if I could.
Ten years ago I met Chris, and we met in a number of these
settings. And I can say honestly that not much has changed in
10 years, in terms of the key issues that we haven't been able
to answer. I will say that what we did deal with for those 10
years, up until 2009, was double-digit growth. And there was a
panic, because that panic represented what at the time meant we
would have to build a port the size of Oakland every year to
keep up with the double-digit growth of what was happening with
our cargo volumes at the time. So the panic was reversed.
But in 2009, when the bottom fell out of the economy, what
happened was we didn't really look at this as a point to
regroup and say, ``For 10 years' worth of work, what did we
learn that we need to do for supply chain management, and how
can we create jobs out of that?'' Instead, what we did is we
went back into a hole, and we didn't go and answer the
questions that we sort of recognized.
And I am going to go over a couple of these key points as
we go along, but I want to just point out the word ``jobs.''
Last night, I am listening to C-SPAN, because of the time
difference here, so I wasn't sleeping really well, so I was
listening to all the testimonies yesterday. Almost every
testimony from every hearing was based around jobs. But here,
we are in an industry that truly represents jobs, good-paying
jobs, but we can't get done what we need to get done to get to
those jobs.
And let me give you some examples. Right now in California
there are 62 projects, 62 projects that are--almost all of them
are completely funded. They are infrastructure projects that
have to do with grade separations, have to do with moving cargo
more effectively, 62 projects funded to represent 100,000 high-
paying construction jobs that are sitting in the mud because of
some various bureaucratic red tape. We can't get the things
done that we need to do, if we have 62 projects that are going
to move cargo more effectively and we can't get that done. It
is not going to work.
So, we look at what the ports have done. The ports have
done an excellent job on their side, in terms of their
investment, answering the environmental needs. The railroads
have done an excellent job of capital investment so they can do
their part. But we haven't done a good job in answering how we
get those grade separations done more quickly, to where we can
have public-private investment to where it is valuable for the
private entities to come into this stuff which we talk about.
We haven't defined merit-based projects, which really is what
it is all about. And I know Laura, in her legislation, talks
about projects of national significance, and I think that is
very good.
But the point here is we are dealing with something that is
critical that we get right, because in a recent meeting I had
with Trade Ambassador Ron Kirk he explained to me the national
export initiative. He explained to me the importance of how
small businesses and businesses have got to be able to compete
globally, if we are going to stay in this game.
And my answer to him was, ``How do we compete, if we can't
move cargo effectively? How do we compete, if we don't know
what the trade corridors are that are critical? How do we
compete if we don't look at what Canada is doing, and we look
at what they are doing with the Harbor Maintenance Tax, or
against our Harbor Maintenance Tax, and we don't answer that
problem? How do we compete with what the new economy of this
world is going to be, and what some people recognize''--which I
think the national export initiative is a very good idea. But
how do we compete, if we don't look at the problems that we
have been looking at for 10 years that we haven't been able to
come up with answers for?
The answer is, you want jobs? It is right in front of us.
You have to fund it in order to get it back. If you fund it,
the numbers are all there. We have numbers that clearly show
that whatever we invest in transportation comes back to us how
many times folded over. We know those numbers, because we have
been doing this for a long time. But we haven't answered the
critical questions that need to be answered.
Multiyear funding has to happen in order for us to be able
to project out as to what we have to do. Permitting processes
have got to be streamlined, in order to get public-private
investment, because we know the public funds are going to be
fewer and harder to get.
Canada has to be answered. Harbor Maintenance Tax has got
to be directed to where it is of basic projects of national
significance, not just going out for the sake of politics.
So, I leave it from another point of view here because,
again, as a labor person, I care about jobs but I also care
about this country. I care about the fact that we stay
competitive, and that we do have a national export initiative
that we can successfully compete in. And I challenge us to
answer the questions that, for the last 10 years, we haven't
been able to answer. Thank you very much.
Mr. Gibbs. Thank you very much. I will start off with some
questions. And I will start with Secretary Darcy.
It is quite evident, by the rest of the panel, how
important our infrastructure is, and the need for additional
funding to get the job done. And I guess I am really struck--
Mr. Koch's and even Mr. Peyton's testimony, but Mr. Koch talked
about critical infrastructure that is owned by the Government,
such as the locks, levees--the locks, dams, and harbor
channels. And I know your testimony--being adequately funded,
we see the cut in the President's budget, and we see about half
of the money raised actually going from the Harbor Maintenance
Trust Fund.
So, my question is, how do you reconcile that? Do you think
it is adequately funded, currently?
Ms. Darcy. The $758 million in the President's fiscal year
2012 budget request for the Harbor Maintenance Trust Fund is
what we believe is necessary in order to maintain and operate
the ports, given the competing interest that we have with other
priorities within our budget constraints.
Mr. Gibbs. I see you wrote a letter to Representative
Charles Boustany 9 days ago. You stated that--maintain active
projects--provide greater channel availability and maintain
projects. So you still concur that it is adequate funding with
the $758 million?
Ms. Darcy. That is correct. I believe the question in the
letter was, ``What would you do with additional funding? What
would you fund?''
Mr. Gibbs. So if you could--if you decided to use the rest
of the Harbor Maintenance Trust Fund available dollars, what
would you fund?
Ms. Darcy. Well, we are supporting the $758 million that is
in the President's budget. And I think that the letter that you
are referring to, which was answered by our chief of
operations, outlined the other additional 300 projects that
would get that additional money, if it were available.
Mr. Gibbs. OK. At an earlier hearing this year you stated
that the trust fund had zero balance. And now in your testimony
you say there is $6 billion. Did we find $6 billion, or is
there no money there in the trust fund?
Ms. Darcy. There is a $6 billion balance in the Harbor
Maintenance Trust Fund. When I testified earlier a couple of
weeks ago on the Inland Waterways Trust Fund?
Mr. Gibbs. No, it was at the budget hearing. And I remember
Representative Harris questioned you, and you determined that
there was no money--you stated there was no money in the trust
fund. And I know General Van Antwerp at the time--who is now
retired--stated that there was no money in the trust fund.
So, is there $6 billion in the trust fund?
Ms. Darcy. There is a $6 billion balance in the Harbor
Maintenance Trust Fund.
Mr. Gibbs. OK. Let me ask another panelist. We have had so
much discussion about the need for more dredging and more
infrastructure improvements, if we have $6 billion in the trust
fund, can we find the projects to do what needs done? Anybody
take a stab at it.
Mr. Bridges. Mr. Chairman, Jerry Bridges with the American
Association of Port Authorities. Of course. I mean there is--
with full funding of the Harbor Maintenance Tax fund, we
believe that most of the dredging and maintenance needs within
the United States could be covered.
Mr. Anderson. Yes, Mr. Chairman, I think it is imperative
that our country utilize the full balance of the trust fund
that we have available for maintenance dredging throughout the
United States. You can speak to every one of my colleagues in
America and get the same answer. And I think that it is
unanimous throughout this industry, nobody is going to tell you
that we don't need to draw down that. And that is why, again,
we all urge the passage of H.R. 104, which would allow that to
happen.
And there is a number of other Corps processes that could
be streamlined and find efficiencies that would allow us to
complete projects on a more timely basis to be competitive in
the global marketplace. I have outlined those very clearly in
approximately 10 bullet points in my written testimony on page
5. I won't repeat them, but----
Mr. Gibbs. OK. Just to follow up a little bit, Secretary
Darcy, when you talk about the TIGER Grants, it is my
understanding that the TIGER Grants are for infrastructure on
the land.
And can you elaborate a little bit how you are coordinating
with the Department of Transportation? Because I think the
mission of the Corps and this Harbor Maintenance Trust Fund and
your responsibilities, dredging and widening the channels--so I
want to make sure that, you know, you are not ceding authority
to another agency. Can you elaborate a little bit?
Ms. Darcy. Sure.
What we are doing with the Department of Transportation is
a coordination effort between their TIGER Grant program and our
existing authorities and existing deepening.
What we are looking at is, does it make sense to give a
TIGER Grant to a port that is not a nationally significant port
that is being deepened? So it is much more of a coordination.
We are informing the Department of Transportation about where
our efforts are, where those top 59 ports are that are being
dredged, and more information for them to make an informed
decision. We don't have grant authority; it is the Department
of Transportation that issues those grants. It is more of an
information sharing with them, as to where the----
Mr. Gibbs. OK, thank you. Mr. Friedman, I wanted to
elaborate a little bit on the ballast water issue. Can you
explain why it is important for a uniform standard, national
standard, for ballast water?
Mr. Friedman. Yes, absolutely, Mr. Chairman. As I
mentioned, today States are able to implement their own rules,
which may be more stringent than the existing Federal rules.
And what has happened in the Great Lakes is that New York State
has done just that. There is a rule that would go into effect
next year, and it requires vessels transiting New York's waters
through the St. Lawrence Seaway to install ballast water
treatment technology that doesn't exist. The State of
California, the State of Wisconsin, and now U.S. EPA have
concluded that that treatment technology is not available yet.
So it is really--that is why I reference it as an unworkable
rule.
And, on the other hand, the industry has been working very
hard to put protocols in place that seem to be working to
control the introduction of invasive species. And we are asking
for a Federal uniform standard. We think that is the only way
we are going to really get at this problem. Everyone wants to
protect the waters in our Great Lakes, and we stand ready to do
that. So, that is why we are urging passage of the----
Mr. Gibbs. One last question before I turn it over to Mr.
Bishop. On dredging, I know that is an issue up at the port
there in Cleveland.
Mr. Friedman. Yes.
Mr. Gibbs. Can you talk a little bit about what--your
relationship with the Corps, working with the dredging
schedule, and also what to do with the dredging material, who
is responsible for that, and how that works?
Mr. Friedman. Right, OK. Well, when we do our annual
maintenance dredging of the shipping channel in Cleveland, the
dredging itself is performed by the Corps with a--utilizing a
private contractor. And then it is placed in confined disposal
facilities, or large landfills on our lakefront. Those will run
out of capacity at some point. And when that happens, we have
to have something in place to replace the capacity in those
disposal facilities. So we have been going through a rather
lengthy planning process with the Buffalo district of the
Corps.
And our view is we need to speed that up. Our approach is
we would like to reuse that material. Instead of just putting
it in a landfill, we think it has value. It is soil that is
being washed down the watershed, and it is now clean enough in
our harbor that we can put it back on sites, as a development
tool.
The problem is that the way the law is written, and the way
the policies and the rules are written, it is sort of like
pounding a square peg into a round hole. It is just very
difficult to move through that process. And meanwhile, the
clock is ticking on us, and we have to have disposal capacity.
So we are just looking for ways to streamline and move toward
that.
As I said, we are willing to put up local funding, if
possible. We are willing to take over project management and do
whatever is necessary to get it done.
Mr. Gibbs. And I am assuming most of that is a Federal law
problem, and not a State?
Mr. Friedman. Yes.
Mr. Gibbs. OK. OK, thank you. Mr. Bishop?
Mr. Bishop. Thank you very much, Mr. Chairman. I want to
thank our panel for this testimony. I think it is really
important that we all have the same information with respect to
how the Harbor Maintenance Trust Fund actually works.
Mr. Anderson, I just heard you say that if we were to pass
H.R. 104, that would allow for the full expenditure of the
monies that come in to the trust fund and I guess, by
implication, spending down the $6 billion that is there. Is
that correct? I don't want to put words in your mouth.
Mr. Anderson. No. I think, Mr. Bishop, it is important that
we utilize the full annual amount, not necessarily draw it
down, and that is----
Mr. Bishop. Fine.
Mr. Anderson [continuing]. What the trust fund is for, is
to have a balance.
Mr. Bishop. And I want to be clear on what using the full
annual amount means. Right now we take in about $1.5 billion in
Harbor Maintenance Taxes. We are expending somewhere between
$700 million and $800 million, and this is a practice that has
gone on for years, which is why we have a $6 billion balance in
the trust fund.
The only way we can fully expend the $1.5 billion that
comes in, given the constraints that we have voted for called
the--I think it is called the Budget Protection Act, the bill
that allowed for the debt limit to be increased, and it created
the super committee--the Budget Control Act, I am sorry--we
have now imposed statutory caps on domestic spending going
forward for 10 years.
So, the only way we can fully expend the revenue that comes
in to the Harbor Maintenance Trust Fund is if we seek an
exemption from that cap, or if we increase the 302(b)
allocation for the energy and water appropriations bill, which
would mean we would do so at the expense of the 302(b)
allocations for any one or some combination of the other 11
appropriations bills, or if we were to eviscerate the accounts
that are in energy and water by $800 million so that we could
increase the Army Corps construction account by $800 million.
So, let's be clear that it is not free money. It would
represent a priority decision, presumably by this committee as
well as the energy and water appropriations committee, that we
think it is a more important priority to invest in this piece
of the Corps' activity than perhaps some other piece of the
Corps' activity, or Department of Energy labs, or whatever else
is funded out of the energy and water appropriations bill. So
let's be clear on that.
So, we--because it will mean that we will be expending $800
million more than we are expending now, and it has got to come
from somewhere. So it is not free money, it has got to come
from somewhere.
So, let me get to--and, Mr. Anderson, do you agree? Do you
concur with that assessment, what I just said?
Mr. Anderson. I don't pretend to understand the exact
process----
Mr. Bishop. All right. Will Secretary Darcy confirm the
accuracy of what I just said?
Ms. Darcy. Yes, sir.
Mr. Bishop. Yes, you are confirming the accuracy of what I
just said?
Ms. Darcy. Yes, I am, Congressman.
Mr. Bishop. Thank you very much, Secretary Darcy. But now
let's explore.
I read a press report before I came to this hearing this
morning that suggested that some of my colleagues on the other
side of the aisle feel that the environmental restoration
projects that we commit resources to within the Corps budget is
perhaps a lower priority, and that we ought to be examining
what we do there. And we spend some $470 million a year, as I
understand it, on environmental restoration projects. Is that
about right?
Ms. Darcy. It is about right. I would have to check this--
--
Mr. Bishop. OK.
Ms. Darcy [continuing]. Year's budget submission.
Mr. Bishop. Now, the biggest chunk of that is the Florida
Everglades project.
Ms. Darcy. A large portion is----
Mr. Bishop. Yes. And my understanding is that a study has
been done that suggests that the full restoration of the
Florida Everglades will result in 440,000 jobs, and that it
will contribute to the economic vitality of the State of
Florida. Are you familiar with this study?
Ms. Darcy. Yes, sir.
Mr. Bishop. OK. So, can we talk a bit? If, in fact, there
is a perception that this $470 million is low-hanging fruit,
that we should be taking money out of that and putting it into
harbor maintenance dredging, can you talk about the economic
benefits of the kinds of projects that we are undertaking under
environmental restoration such as the Florida Everglades, such
as the Louisiana coastline project, things like that? Can you
talk about that for us?
Ms. Darcy. Yes. Our ecosystem restoration projects around
the country, we have several large ongoing ones that the Corps
is part of. Many of our projects are on aquatic ecosystem
restoration, we are also in partnership with not only the local
community, but also other Federal agencies. And, in particular
to your reference to Everglades, we have several Federal
partners in that restoration effort, including the Department
of Interior and EPA.
But all of those restoration efforts in many cases are a
result--and Florida is another example--of some work that the
Corps has done in the past that we are helping to restore the
results of what that project did. In Louisiana we are doing
coastal restoration projects, many of them--some wetlands
restoration, as well as others.
And all of those restoration projects--we are doing some in
the Great Lakes and California Bay Delta and the Chesapeake
Bay--all have economic impacts for the local community, as well
as job creation. There is construction. We have started four
construction projects in the last 2 years in the Florida
Everglades. Construction projects create jobs, so there is
economic development and economic activity, as a result of the
ecosystem restoration, not only in the short-term job creation,
but also long-term, for economic development within those
communities.
Mr. Bishop. Thank you very much for that. I think Mr.
Bridges, Mr. Koch, Mr. Anderson, Mr. Friedman all made
reference to the necessity of passing the surface
transportation bill. I couldn't agree more. I hope very much
that we will pass it.
My understanding of what is on the table is a surface
transportation bill that would be 6 years at $35 billion a
year--which is the funding that flows into the Highway Trust
Fund from the motor fuels tax--would represent roughly a $20
billion per year reduction in what we are spending now. Would--
is it fair for me to assume, given your support of passing a
surface transportation bill, that you would want us to lift
that annual expenditure number to the greatest extent we could?
Anyone?
Mr. Koch. Congressman, I think the private sector has been
repeatedly on record, whether it is the U.S. Chamber of
Commerce or the American Trucking Association, as saying yes to
that question. And the private sector, interestingly enough, is
perfectly willing--and many of the members of the private
sector have expressed support for--raising the gas tax as a way
to pay for it.
Mr. Bishop. Did you say raising the gas tax?
Mr. Koch. Yes, sir.
Mr. Bishop. I am sorry, just make sure I heard you
correctly. Would that not be a job-killing tax increase?
Mr. Koch. That is a judgment others can make. But I think
the private sector has been supportive of what you are talking
about, and the way to pay for it.
Mr. Bishop. But in fairness, I shouldn't tease. It is very
important, I shouldn't tease. You would encourage us to find
alternative funding mechanisms so that we could make the annual
expenditure of the surface Transportation bill be as robust as
possible. Is that a fair conclusion?
Mr. Koch. That is fair, if you need to find an alternative
revenue mechanism, yes.
Mr. Bishop. Mr. Friedman, would you agree with that?
Mr. Friedman. Yes, I would, Congressman. I think, you know,
there is ample evidence that suggests we have underinvested in
our transportation infrastructure for years, if not decades,
and we need to start catching up. And we certainly encourage a
maritime title in the transportation bill, because we have
needs that are not going in our----
Mr. Bishop. I am in full agreement, particularly if we are
not going to pass a WRDA. We would need to have a maritime
title in the transportation bill. Mr. Anderson, would you
concur with that?
Mr. Anderson. Yes, Congressman, I would. It is obvious to
everybody, I think, that the current tax that funds the
transportation in United States is a dwindling resource, and it
certainly makes it difficult to fully invest in our
infrastructure. I think the maritime title in the bill would be
very, very helpful.
I would also encourage that we look at the way that we work
in incentivizing and encourage public-private partnerships,
which we have done in JAXPORT. We have invested with--I
mentioned in my testimony both--two Asian companies, Mitsui MOL
and Hanjin, over $500 million in two public-private
partnerships. So we feel that is another way to leverage money.
Mr. Bishop. I have gone way over my time, and I thank the
chairman for his indulgence. Mr. Bridges, just give you a
chance to comment. You would encourage us to pass a robust
surface transportation bill?
Mr. Bridges. I absolutely would, yes. We think that the
focus should be on freight transportation, and look at it from
a supply chain total system approach, rather than just
segmented. But a maritime title would be absolutely essential
in a surface transportation act.
Mr. Bishop. Thank you all, and thank you, Mr. Chairman.
Mr. Gibbs. Representative Bucshon, you have a question?
Yes.
Dr. Bucshon. Thank you, Mr. Chairman. I think everyone in
the room can see today why we are way behind on everything,
because the Federal Government doesn't seem to have the ability
to prioritize anything. And, you know, if you ran your
household like that, when times are hard, when money was tight,
and you continued to spend it on extravagant vacations and
other things that you can't afford, you get the same thing that
we are doing here in the Federal Government. We are continuing
to try to fund everything, when we have critical things that we
need to fund.
I think one of--the biggest dispute we have here on this
committee and in Congress is not necessarily the amount of
money that is allocated to be spent, but how do we prioritize
that spending. And clearly, infrastructure is a critical part
of what we should be funding at the Federal Government level.
And we need to tighten our belts. And I do believe we can do
more with less if we prioritize and recognize that some of the
extravagant vacations that we want to spend it on, we can't do
that right now.
So, I think that--I have got just a couple of questions.
Ms. Darcy, I heard today with some of the other Members
saying that their ports are only getting 1 percent or less of
the money back that they put in. How does that happen? I mean
who is responsible for that?
Ms. Darcy. Congressman, the tax that is paid into the
Harbor Maintenance Trust Fund is an ad valorem tax for the
value of the cargo that is being imported into that port. That
tax is put into the trust fund. Because what goes into the
Harbor Maintenance Trust Fund is for operation and maintenance
of the ports, and we make a determination as to which ports
need, based on a national economic development and national
priorities, which of those ports need to have their operation
and maintenance done with that year's funding.
Dr. Bucshon. OK, then. But--I understand the frustration
that I heard from other Members of Congress here about their
ports only getting 1 percent of the money back. It seems to
me--I mean at what point does the ports that are only getting
their 1 percent--at what point do--does their priorities of
what they think need to be done take precedence over everything
else?
I mean it just doesn't make any logical sense to me, year
after year, how we could allocate the money and people could be
getting that little of their money back.
Ms. Darcy. Congressman, the operation and maintenance of
ports varies, depending on the existing depth, as well as the
natural depth that occurs there. There are some ports, in
particular on the west coast, Seattle and Tacoma, that are
naturally deep ports, so they don't require the same operation
and maintenance that other ports do. And so, we would not put
the exact same amount of money into that port that they put
into the trust fund, because their needs for maintenance aren't
the same as other ports.
Dr. Bucshon. OK, that makes sense. I guess it seems to me
that--would anyone--would everyone agree that, in some way, we
need to--and anyone can answer this--not only the Harbor
Maintenance Trust Fund, but a lot of other trust funds we have
in the United States--Social Security, for example--we
continually, over decades, raid that money and use it for other
things. Would anyone disagree that we need to somehow fix that
process, and target the money where it is supposed to be spent?
I mean, would--Ms. Darcy, you can comment first. I mean
would anyone disagree with that?
Ms. Darcy. The current Harbor Maintenance Trust Fund is
limited by statute as to where that money should be spent.
Dr. Bucshon. Yes, but we have been spending it on all kinds
of things.
Ms. Darcy. Right, the----
Dr. Bucshon. And it is not only now. It is previous
administrations, Republicans, Democrats. I mean this is a
chronic Federal Government problem, right, that we find money
in these trust funds and we use it for other things?
Ms. Darcy. Some of the balance of the trust fund is
invested in other--the same as other trust funds, you are
right.
Dr. Bucshon. Yes. And Social Security is a classic example,
right? We--it is full of IOUs, and there is really no money
there. I mean that is one of the biggest egregious examples.
I mean--anyone else? Mr. Koch, you want to comment on that?
I mean----
Mr. Koch. No, I think many in the private sector don't find
much trust in the trust funds because of the fact that money is
diverted for purposes other than what the fees or the revenues
were designed to pay for.
I would express a note of concern, however; I would hope
that our colleagues in the American port community do not end
up at each other's throats over how the Harbor Maintenance
Trust Fund is presently constructed. Congress designed that fee
on an ad valorem basis, as has been discussed, as a national
program for national harbor maintenance. It is clear, as the
Secretary said, some ports don't need much harbor maintenance
dredging, and therefore, they can complain that they pay more
in than they get out.
But that is the design of the system. And if you undo that
design, I think you then start pitting various U.S. ports
against each other, whereas I would hope that the industry
would be better served if the port community can stay together
and united on this, rather than to get at each other's throats
over who is getting a better deal out of the trust fund in a
particular year.
I mean the Mississippi River and the Port of New Orleans
are going to have a very different view about harbor
maintenance dredging than Seattle and Tacoma. That is
unavoidable, but I think the Congress recognized that when it
created this fund to begin with. And efforts to undo it, I
think, should be viewed with some degree of care.
Dr. Bucshon. Yes. My time has expired, but I just want to
say that makes total sense to me. It just seems like 1 percent
is a pretty small number. With that I yield back. Thank you.
Mr. Gibbs. Yes, just to make one quick comment, I think you
are trying to say think of it as a system-wide system.
Representative?
Mrs. Napolitano. Thank you, Mr. Chair. And I have a ton of
questions. I may not be able to ask them all.
But, Mr. Friedman, we talk about ballast water. And,
unfortunately, because California has the--very busy ports, and
we have had the influx of invasive species like the quagga
mussels that is costing millions of dollars for the water
agencies to try to eradicate. And then they have closed beaches
because of the contaminated water because of the ports--the
tides bringing it in. So, I was just making a comment, because
it hurts my economy, and it does create problems for our
environmental areas. So that said, I don't need a comment, I am
just bringing that to your attention, because that is an issue
in my area.
Then, Ms. Darcy, the--good to see you, ma'am.
Ms. Darcy. Yes.
Mrs. Napolitano. How many trust funds are there, besides
the Inland Waterways Trust Fund and the Harbor Maintenance
Trust Fund that deal with ports and inland waterways?
Ms. Darcy. Those are the only two within the Corps of
Engineers that deal with our ports or----
Mrs. Napolitano. Does any other----
Ms. Darcy [continuing]. Our inland waterways.
Mrs. Napolitano [continuing]. Agency have any other
transportation--dealing with assistance to these ports?
Ms. Darcy. I don't believe so, but I can't say that for
certain.
Mrs. Napolitano. Would you mind checking? Because you never
know----
Ms. Darcy. I will look----
Mrs. Napolitano [continuing]. What else there might be out
there.
Ms. Darcy. I will look for some more trust funds for the--
--
Mrs. Napolitano. That would be great. Thank you, ma'am.
Mr. Peyton, in your position as chair of the education
committee of the Marine Transportation System, the National
Advisory Committee, did you develop ideas on how to educate the
American people on the importance of seaports to our Nation's
economy?
Mr. Peyton. Yes, yes. There was about 4 years' worth of
work just to explain what this is. A committee was put
together, took about 4 years for everybody to drop their
swords, because it was basically a supply chain group, which
means every different part of the supply chain was represented:
retailers, carriers, everybody.
After 4 years of laying down the swords, about 4 years of
very good work was done. And I don't think anybody ever saw
it----
Mrs. Napolitano. Why not?
Mr. Peyton [continuing]. Honest.
Mrs. Napolitano. And why not?
Mr. Peyton. Well, there was a change of an administration,
there was a change in--like there is, you know, things flip
flop, and then you forget what was done before. But I believe
mainly because the group was disbanded, and it doesn't exist
any more.
Mrs. Napolitano. Does the work still exist?
Mr. Peyton. Yes, it does.
Mrs. Napolitano. And where might that be?
Mr. Peyton. Well, it was on a Web site, and then I believe
it was taken down. It was posted, and then somebody took it
down. But all of these studies were put in place and on a Web
site at one time. I know I have a copy of it, because I was the
cochair of the education committee, so I have a lot of this.
Mrs. Napolitano. Well, what I would like to have you--and
maybe send to us, to this committee, so that we may be aware of
some of the work that was done, because we may want to continue
educating the public on how critical these ports are to our
Nation's economy.
And then, do you link the President's initiative to double
our Nation's exports to having a state-of-the-art
transportation system that connects highways, railroads, and
bridges to our seaports? And I have a real strong connection to
the railroads and highways, because I have 54 grade separations
in my area from the Alameda Corridor East project.
Mr. Peyton. Yes, absolutely. And I think the word ``systems
approach'' is what was dealt with in the 4 years of study, is
how we take a systems approach to answering what the issues
are, because it is all the interlinking of the transportation
modes to really understand freight mobility, and I understand
that is what Congresswoman Richardson has worked on, and the
key word is ``projects of national significance,'' meaning
across the supply chain. That is the key, is understanding the
systems approach to this.
Mrs. Napolitano. Well, great, because--and, Ms. Darcy and
Mr. Bridges, you are very right on the button in linking
transportation--not only rail, but highway--to the ports,
because in my area, like I said, I have the Alameda Corridor
East, which goes through eight of my cities. And there is an
increase in traffic that is going to affect those 54 crossings,
and only 20 are scheduled to be separated, creating a lot of
issues: environmental, safety issues from my general public.
And so I have great concerns over that.
There are many other questions I have, Mr. Speaker, but
what I--Mr. Chair. But I will submit it in writing, and I yield
back.
Mr. Gibbs. Representative Shuster.
Mr. Shuster. Thank you very much, Mr. Chairman. Mr. Peyton,
I almost jumped out of my seat and said amen to what you were
saying. I don't mean to be insulting, but you sounded like a
Republican.
Mr. Peyton. Oh, that's not good.
[Laughter.]
Mr. Shuster. I said I didn't mean to be insulting.
Mr. Peyton. Well, let me say something on that, if I could.
Mr. Shuster. Sure.
Mr. Peyton. This issue of transportation is probably the
first issue that the union has ever stood side by side with the
Chamber of Commerce, locally and nationally, to say that the
significance of this is so big that we need to stand together
in one message.
So, I would think and I would hope, after the years of us
working on this--and literally, it was 10 years of work--that
again, we put down our swords and we understood that this is
for the good of the Nation.
Mr. Shuster. Right.
Mr. Peyton. And I think that that doesn't have to be any
one party.
Mr. Shuster. Right. And I think you are absolutely right.
But some of the things you said there--look, funding right now
is extremely difficult, and I understand the business community
wants to raise the gas tax and user fees, as unions do. But the
American people, when you go out there and talk to them, they
are saying, ``Hold it a second. I want to make sure I have a
job tomorrow before we--before I have to spend any more
money.'' And so that is the hesitation.
But there is other things we can do, and I think the
leadership on our side has already said, ``Let's figure out
where we can find some money without raising revenues, taxes.''
And I think that is possible. But I also come back to it just
seems like, in this town, it is real easy to say raise taxes,
get revenues, and that is real hard on the American people. But
it is really tough for us to figure out how we take programs
that have been in place for years and years and modernize them,
streamline them, reform them.
As you said, you have got 62 projects out there that are
being held by bureaucratic red tape. And my guess is that maybe
there is three or four of them that there is a real serious
problem there. The rest of them, they are just bureaucratic red
tape that are going through these endless revisions and
reviews. And we have got to get serious about this, because
again, I think we can do more with less, as I said in my
opening statement.
So, you know, I really appreciated hearing that come from
you. And I hope that portion of it resonates with my colleagues
on the other side, because this is an important issue. And
let's fix the regulatory--the bureaucratic regime, before we go
out there and take more money out of people's pocket books.
Now, with that being said, Ms. Darcy, I have great concern
over the Corps, not only in harbor maintenance, but expanding
your role. Just--there is a situation in Pennsylvania with the
Marcellus Shale, where the Corps of Engineers has revised its
review process. And what the Pennsylvania Department of
Transportation has done for 40 years, and done it extremely
well, when you have small stream crossings they have permitted
these. The Corps has decided they are going to start to do it.
And it has caused a big backlog in Pennsylvania, when it comes
to Marcellus Shale. This is not the hearing to do that, but
those are the kinds of things that are occurring in the Corps,
in the EPA, and across the Government.
So, my question to you is, as the administration cuts your
budget, how is that going to impact you as to the size, the
overhead, the personnel? You know, what are you doing to
respond to those cuts in funding?
Ms. Darcy. Congressman, we will respond to the cuts in
funding if--your reference to our regulatory program this year,
our proposal for our budget is to keep that constant, so that
we will have the regulatory capability to respond to the
concerns that you raise.
Mr. Shuster. OK. And I hope--it is not just about--again, I
come back to the reforming. You have been in existence, the
Corps has done a lot of great work in Pennsylvania. But there
are things you can do that are not necessarily cutting the
people, but just reducing what you do out there, and pushing it
out to the States, because there is a lot of capable and
competent State agencies that can do what you do with you
having oversight. Are those things you are looking at doing?
Ms. Darcy. We are looking at some of that. One of the
things that we are doing right now is there is--you may have
heard some of the other witnesses here talk about some of--the
length of time it takes for the Corps of Engineers to do its
planning process. What we are doing right now is looking at our
planning process to look at ways on how we can make it more
efficient. We have got some studies that have taken anywhere
from 6 to 10 years, and that is just too long, because it
requires a Federal investment, as well as an investment from
our local sponsors.
So, we are looking at some pilot studies now, to see if we
can find ways to reduce the length of time it takes, as well as
the cost.
Mr. Shuster. So, let me ask the question. Based upon what
Ms. Darcy said, do you, the panel up there, get a sense that
the Corps is reducing and looking at ways to streamline, or do
you get a sense it is same old, same old? Anybody care to--or
is everybody afraid the Corps is going to come in and hammer
them if they criticize them?
Mr. Bridges. From the AAPA's perspective, we think that the
Corps has made strides in improving the process. However, we
think that, due to lack of the resources and the proper
funding, their ability to deliver full services to the port has
been hampered somewhat.
And so, we work in partnership with the Corps to improve
those processes, and I think that that will bear fruit in the
long term. But it is absolutely essential that the Corps'
budget be restored, and that they be allowed to bring on the
resources to deliver the right product for the ports.
Mr. Shuster. Anybody else care to talk about the
interaction with the Corps, and if they think they are
streamlining and making strides in the right direction, or are
they doing the same old thing?
Mr. Anderson, you look like you are ready.
Mr. Anderson. Thank you, Congressman. We feel that, you
know, we are integrally linked to the Corps process, doing
water projects. And while we have every intention of continuing
to work with them, there are many areas that we feel that we
could do with just a few policy changes, both legislatively
here--for example--and again, I refer to my written testimony,
but a few specifics is allowing us to advance the Federal
portion of this and get credit for those dollars for projects.
We stand ready with our State to fund a specific project
that is $40 million, and we just can't do it. We are going to
have--there is 11 chief's reports sitting out there, we
understand 3 to 6 more in the next 3 months. And those are the
gold standard for moving forward. But we can't move forward
with those projects throughout the country.
So, it is partly making more efficiencies in their process,
and partly this body doing more to help them implement those
processes.
Mr. Shuster. Well--and again, my time has run out--if you
have anything, specifics, any ways that you see we can reform
the Corps or the EPA or any other of the agencies, I am
committed to doing that. I believe the chairman is. I know
Chairman Mica is. We have got to hear from you to be able to do
that, to be able to streamline this. Because, as Mr. Peyton has
pointed out, there are 62 projects out there tied up in the
bureaucracy, and they need to be changed.
And again, Mr. Peyton, amen. And I meant no offense by
telling you you sound like a Republican. I yield back.
Mr. Gibbs. Thank you. Representative Brown?
Ms. Brown. Thank you. And thank you, Chairman Gibbs and
Bishop, for holding this hearing.
I guess my quick question is are we going to have another
round of questioning? Are we going to have another round of
questioning? OK, good. All right, then. I don't have to really
rush.
Welcome, Mr. Paul Anderson, who is our port director in
Jacksonville, Florida. And the port is really the economic
engine for north Florida, over 65,000 jobs, the economic impact
of $19 billion. The question was asked to you, Mr. Anderson,
about the budget. You don't understand anything about the
budgeting process up here, nor do we. And it is evolving.
[Laughter.]
Ms. Brown. And so--but the point is, the trust fund take in
$1.5 billion and is $6 billion in there, and you all can't use
it because it sits there and they try to make it look like, you
know, we got all this reserve. And if we use this money for the
purpose that we take the money in, we could generate a lot of
jobs and be prepared for the next generation of ships that is
coming. Would you like to respond to that?
Mr. Anderson. Thank you, Congressman, and for the very
gracious welcome. I agree that I don't pretend to know--from a
lay person's perspective, the congressional budgeting process
is very complex. But I do know this at home. When I take in so
many dollars and I take out my taxes, I have to pay my mortgage
every month, and how much I need to feed my family, and do the
other things that you need to live. And I think the average
American understands how to do that. And we do that at the port
very well.
I do know that when you take in $1.5 billion, if we--it is
about system preservation, is the reason that the trust fund
was passed, to preserve our existing system so that we can
maintain our harbors, our waterways. Our country was blessed
with great ports. Cities grew up around our ports, not the
other way around. Many of the ports, like ours in Jacksonville,
are on a river. They take a lot of maintenance.
We work very vigorously with our Army Corps partner to try
and maintain the river so that we can continue to provide
economic development to our country. And we could always use
the additional dollars for that system preservation for our
resource that this country and taxpayers have already invested
hundreds of millions of dollars. So we need to preserve that
investment.
Ms. Brown. Would you explain to us--and I know this is
local, but you have the full funding, but you can't get it
authorized because what--local and State, but the Federal
Government is not a partner, or we haven't authorized it, and
you know we got this silly thing that we can't earmark because
this is a new rule the new leadership--so since you can't
earmark, then we can't pass a bill, because in WRDA you always
have member-specific projects.
I mean you need a process, whatever that process is,
hearings, whatever you want to do. But it has to be a way to
identify these projects, and not just let the administration--
which you know I support, but I don't care who the
administration--members should have some say-so as to members'
priorities in their area. Can you expand on that?
Mr. Anderson. Yes, ma'am, I will try to. I appreciate your
frustration. I don't consider it an earmark when we are willing
to put up every dollar for the project. We just need to change
the policy here to allow us--so we don't have to wait for an
authorization.
And in this specific instance, I think you are referring to
our project at Mile Point, which is hindering our ability to
take in the larger ships of--post-Panamax ships, by the way
that are coming through the Suez Canal for many customers and
Members. We will do that if we can just find a way to advance
the dollars that the State and the local government is ready to
put up.
Ms. Brown. Madam, can you talk about it? We have had
several meetings. I mean it is a bipartisan effort. I know it
is local, but this is my only bite at the apple. I got to get
you here.
Ms. Darcy. Thank you, Congresswoman. The portion of the
project that you are referring to, the Mile Point portion, is
not an authorized project. So, therefore, we can't budget for
an unauthorized project.
Ms. Brown. OK, but we can't authorize it because it is an
earmark. We are in a Catch-22. What do we do?
Ms. Darcy. I don't have a good----
Ms. Brown. So we don't understand the budget, nor do we
understand the legislative process, because it is not working.
It is broken.
I will have another round.
Mr. Gibbs. Representative Harris?
Dr. Harris. Thank you very much, Mr. Chairman. Let me go
into some of these issues with the Harbor Maintenance Trust
Fund and the Transportation Trust Fund. I am just going to ask
everyone, starting with Mr. Bridges and working down.
Mr. Bridges, do you support--and because I think you all
said we ought to have the multiyear transportation bill, and we
ought to fold a maritime title into it. Mr. Bridges, would you
support an increase in the gas tax to help pay for that?
Mr. Bridges. Yes.
Dr. Harris. OK. Mr. Koch?
Mr. Koch. I think----
Dr. Harris. That job-killing gas tax, you know, the ranking
member spoke about.
Mr. Koch. Yes, but----
Dr. Harris. You would?
Mr. Koch [continuing]. The gas tax increase for the surface
transportation bill.
Dr. Harris. Correct, right.
Mr. Koch. Yes.
Dr. Harris. Yes. Mr. Anderson?
Mr. Anderson. Yes, if it includes all modes of
transportation.
Dr. Harris. Mr. Friedman?
Mr. Friedman. Can you repeat the question?
Dr. Harris. Mr. Benjamin?
Mr. Benjamin. Yes.
Dr. Harris. Mr. Peyton?
Mr. Peyton. Spend money to make money.
Dr. Harris. Same question. Do you support--Mr. Bridges, do
you support an increase in the Harbor Maintenance Trust Fund
tax level?
Mr. Bridges. No.
Dr. Harris. No? Mr. Koch?
Mr. Koch. No, because----
Dr. Harris. Mr. Anderson?
Mr. Anderson. No.
Dr. Harris. Mr. Friedman?
Mr. Friedman. No.
Dr. Harris. Mr. Benjamin?
Mr. Benjamin. I support reformation of the----
Dr. Harris. Do you support an increase in the rate?
Mr. Benjamin. Reforming the system.
Dr. Harris. Mr. Peyton?
Mr. Peyton. I agree. Reform the system.
Dr. Harris. OK. So, let me get--let me summarize what I am
hearing. You think it is just fine to raise the gas tax, which
doesn't go to paying roads only, but you think it is not all
right to increase the Harbor Maintenance Trust Fund, because--I
suspect the reason why you believe that is because you think it
ought to go paying for the dredging, and we are not paying for
all the dredging, so we shouldn't be increasing the tax.
You just summarized the problem a lot of the Members have,
going to our constituency and saying, ``Let's raise the gas
tax, we really need to do it. But, oh, by the way, we are not
really going to build roads over there, we are going to do
things like fund mass transit, we are going to build bike
paths, and all the rest.'' That is the problem.
You would be much more believable to me if you say, ``Sure,
raise the Harbor Maintenance Trust Fund to--I know it doesn't
go to just dredging harbors, but let's do that too.''
Now, Ms. Darcy, thank you very much for coming back. And I
think I got a handle on this Harbor Maintenance Trust Fund
issue. There is a piece of paper floating around that has $6
billion on it. There really aren't funds anywhere. There is an
IOU written, right?
Ms. Darcy. It is in the treasury account.
Dr. Harris. ``Treasury account'' means it is in IOU--it is
an IOU written. There are no--in other words, if we decide to
spend that money tomorrow, they would have to go and find a
place to print it or transfer it or something.
What is the backlog of projects, total projects in the--
dredging projects in the United States? If we wanted to really
dredge our--you know, to authorize depths and widths, how much
would it cost? All the projects.
Ms. Darcy. All authorized projects to all authorized widths
and depths?
Dr. Harris. Mm-hmm.
Ms. Darcy. I think the figure is about $1.3 billion.
Dr. Harris. You mean we could dredge all our--well, I am
going to find that hard--you are going to have to show that to
me, because we can dredge all our ports in the United States,
their authorized widths and depths, and it is only $1.3
billion?
Ms. Darcy. In addition to what we already spend. I believe
that is the case.
Dr. Harris. You are going to have to go back and check your
figures, because I know these ports. These ports, despite the
fact that we are spending $800 million a year, we have huge
backlogs. And the number of ports that need a dredging done
that have been delayed is huge.
But let me ask you a question. So you say that we haven't--
your testimony is we are already spending an adequate amount.
But we are not spending enough to bring them up to authorized
widths or dredge to authorized depths. So I guess it is a
matter of what you consider adequate.
Ms. Darcy. It is adequate for the funding that we have.
Dr. Harris. I--oh, now let's go to the funding that you
have.
In the President's second stimulus bill, this current jobs
bill, how much has he set aside for dredging projects?
Ms. Darcy. I don't believe there is any set aside for
dredging projects.
Dr. Harris. No set-aside for dredging projects? Well, that
is very interesting. So then, you don't--the administration
really doesn't think it is a priority to go down to those
depths or those widths?
[No response.]
Dr. Harris. I mean because that is how you determine
priorities, you actually put it in one of these bills. Because
the President has said that we want roads and other
infrastructure, but no money for dredging? No money for that
important aspect of maritime infrastructure?
[No response.]
Dr. Harris. Finally, because my time is running short, your
testimony says that in deciding how to spend Harbor Maintenance
Tax receipts, you are going to make a comparison with other
potential uses of the available funds.
Now, first of all, the funds aren't being used, they are
being deposited in the treasury. What are some of those other
potential uses that could be more important than actually
dredging a harbor to accommodate these new ships that are--you
know, will be coming through the Panama Canal, et cetera? What
are some of those other potential uses of available funds?
Ms. Darcy. Some of them could be for other portions of
harbor development or harbor maintenance other than dredging,
things like jetty replacement and other kinds of maintenance
that is not specifically dredging.
Dr. Harris. OK. But you could do that with the current
funds. I mean you have a little leeway there, because you are
only spending $700 million and some-odd change out of the $1.5
billion.
Ms. Darcy. The $758 million is what we----
Dr. Harris. Yes.
Ms. Darcy [continuing]. Will be able to spend.
Dr. Harris. Right. So you think it is a more important use
of those funds to deposit them in the treasury than to invest
them in harbor maintenance at this point in time? Because that
is what is being done.
Ms. Darcy. Well, being deposited in the treasury, they will
be used for other priorities.
Dr. Harris. This year? Next year? Ever?
Ms. Darcy. I don't know that answer, sir.
Dr. Harris. Certainly not this year, right? Those monies
deposited in the treasuries, we just get a piece of paper IOU
back, right? We don't actually get a project.
Ms. Darcy. Well, those receipts are invested in treasury
securities.
Dr. Harris. Right, but you can't drive a ship into a
treasury security, you can't--I mean I guess it is a matter of
priorities. Thank you very much, Mr. Chairman.
Mr. Gibbs. Thank you. Ms. Richardson?
Ms. Richardson. Thank you, Mr. Chairman. First of all, the
gentleman who just spoke, I look forward to maybe having a
thoughtful discussion over coffee or a beer or something on
these issues. I respect and look forward to having a more
thorough discussion.
I would just like to say for the record, though, building
upon the gentleman's questions, there is a very key difference
between--several differences--of the Highway Trust Fund versus
the Harbor Maintenance Tax. One, the Highway Trust Fund has
been unfunded for quite a few years now, even dating prior to
President Obama, but President Bush, as well. The gas tax has
not been increased since 1993. And so it is an underfunded
program.
I also think it would be helpful to have a discussion of
the difference between increasing the diesel tax versus, as you
said, asking our constituents to pay a tax. Because if the
truckers are willing to pay a tax, an increased tax which would
be a diesel tax for the roads that they would be able to use
that would eliminate choke points and allow goods to move more
efficiently, that may be somewhere where we could find an
agreement.
Let me now get into the questions that I have. Mr. Peyton,
in your testimony on page 3 you stated your concerns with the
TWIC program. Can you describe how the TWIC program has
positively or negatively impacted the economics of our
seaports?
Mr. Peyton. Well, I think that we all know that--what we
went through on 9/11. But at the same time, the question is
where that spending goes, and what it means in the total.
Originally, when the regs were written, there was language
in the Coast Guard regs that said that the people that work in
the ports would be educated and become the eyes and the ears of
the port, which, without education, people in the ports were
the eyes and ears, because they were the ones who knew better
than anybody else if something was wrong, and a number of
instances were taken care of as a result of this.
So, what we are saying here is--we are not saying that
there isn't a place for security because, of course, there is.
But we are saying that the expenditure of that money when we
look at some of the other projects that need to be funded, that
maybe our priorities need to be shifted into goods movement.
And we have done enough over here, because fences, cameras, and
everything we put up seem to be multiplying by the day, but we
are not moving cargo more effectively because we don't have the
monies allocated there. That is what our point is.
Ms. Richardson. OK. And, building upon that, Mr. Peyton, I
would also like to ask you and Mr. Bridges and Mr. Benjamin. In
response to 9/11, port authorities lost many members. Out of
this attack, the Department of Homeland Security was formed and
subsequently funded. In addition to law enforcement officers,
however, there is many other people who could be considered a
first responder, such as retail clerks, ship pilots, marine
construction workers, and so on.
Do you believe that these workers should also be included
in security plans, in training, and a part of the process?
Mr. Benjamin. Yes, and we work actively with the other
members, including Coast Guard, members of law enforcement,
members of industry, in developing our specific security plans
at the port.
Ms. Richardson. But specifically--I realize from a port
perspective, but I am talking about your actual workers. Like,
let's say, your longshoremen or your retail clerks, do they
have an opportunity to participate in the planning? Are they
getting a chance to take advantage of the training?
Mr. Benjamin. I would look to also Mr. Peyton and my other
colleagues, but I believe the answer is yes, as it relates
between labor and the PMA and other members between labor and
their representative members of industry.
Ms. Richardson. Mr. Peyton, do you feel that you guys are
given an adequate opportunity to be considered a first
responder?
Mr. Peyton. No, we have not been built into this. We have
met with the first responder groups, and I will say that the
ports have done a very, very good job within their unit. But,
unfortunately, we were put one step removed because of facility
security officers at individual terminals, which means that we
were not trained. And it is just coming around now, it is just
starting. But no, we are not.
Ms. Richardson. OK. And then, I think my last question that
I might have, Mr. Bridges, Anderson, Friedman, and Benjamin, I
have authored a bill called the Freight Focus Act, and I would
like to ask the question. Are any of you involved with the
Department of Transportation in an advisory capacity that would
allow you to prioritize major goods movement corridors to
alleviate choke points, to participate in freight planning, and
to designate corridors of national significance, and to be able
to weigh in on what you think would be merit-based programs or
projects that should be funded? Are any of you allowed to
participate in that at this point?
Mr. Benjamin. Yes, we do. We happen--I think Mr. Bridges,
myself, and other members are involved not only at AAPA but at
the marine transportation committee established by the
Secretary--or re-established again, I would say.
Ms. Richardson. Would you like to expand?
Mr. Bridges. Yes. We are certainly involved with the
Secretary's office in that effort that is initiated through
MIRAD, and we are--I think there is three or four port
directors that serve on that, along with private sector
terminal operators and others. And at the AAPA we are also
engaged in trying to look at the national freight policy and
talking about corridors of national significance and that sort
of thing.
Ms. Richardson. Mr. Chairman, could I just ask a followup
question to that? Thank you, sir.
But are you allowed to specifically determine to look
across the Nation and say these are the top 10 goods movement
corridors, and where funding should prioritize----
Mr. Bridges. I believe that the agenda will--is such that
we will move to that. We have met once, since the inception of
the committee. But I believe that is the overall vision of the
National Maritime Advisory Committee.
Ms. Richardson. OK. Thank you, sir. I yield back.
Mr. Gibbs. OK. I think there is a few more questions. I
will start off--go ahead, Representative. Go ahead. You can go,
and then we will switch back and forth here.
Mrs. Napolitano. Thank you, Mr. Chair.
Mr. Gibbs. We are going to make this second round kind of
quick, though.
Mrs. Napolitano. I appreciate the time. Mr. Peyton, in your
testimony you are very credible in some of the issues that I
have great concerns with, and one of them is a diversion of
cargo away from our west coast seaports to Mexico and Canada.
Should our Government prohibit transshipment of goods through
Mexico and Canada coming to the U.S., since they do not have
the same security, the same safety, and environment regulations
that we have at our ports?
And I kind of think of the trucking situation with NAFTA,
where that has played a great part in taking some of the jobs
from our members. And I know that Canada has been continually
investing in their roads and infrastructure to be able to move
more cargo through their ports, and that they have a factor of
several days, if I remember correctly, to expedite the
transshipment of goods. And is it cheaper? But all of those are
part of my question.
Mr. Peyton. Yes, I think the key here is--we have heard
this word before, but it is called fair. And fair means even,
across the board, that they don't get an advantage because
their Government funds something that ours isn't willing to,
that they get around the Harbor Maintenance Tax when we have to
pay it, when we have environmental concerns that they don't
have, when we have security concerns that they don't have to go
through. It is called fair.
And an even playing field--because, given an even playing
field, we have done a very good job--I'm talking about the west
coast now--at developing what we need to develop, and doing
what we need to do to stay in this game and win our market
share back. We have picked up, since 2007, we have picked up 2
percent of the 6--we lost 6 percent of our market share. We
have picked up 2 percent of that and brought it back. So we can
win this battle, but we need an even playing field.
Mrs. Napolitano. Well, and talking about the even playing
field, I know there is a move of Beat the Canal, which puts the
local, the State, labor, Chambers of Commerce, chambers
themselves, former Governors, railroads and trucking
associations on the same playing field to be able to expedite
the port's traffic, and also to be able to look at regulations,
which bring me to Ms. Darcy.
Is any move to have any of the other agencies--like EPA,
Department of Transportation, Commerce, and others--working
with the Army Corps to expedite the processes that hinder some
of these projects that are waiting in line?
Ms. Darcy. In our districts we try to work cooperatively
with the other agencies, in particular, for----
Mrs. Napolitano. But that is local, ma'am. I am talking
about here in Washington, so that we all know that this is a
move that is going to help create better ability for our ports
to move forward on their projects.
Ms. Darcy. We are working with Transportation and other
agencies to try to better coordinate upfront what the
requirements will be for the regulatory process, so that it
doesn't get bogged down with one agency saying one thing and
the other saying another.
Mrs. Napolitano. OK. And then, to the panel, is what would
you suggest to all these agencies to do to be able to get to
the table and resolve these choke points? Anybody?
Mr. Benjamin. Well, I think that it starts with something
we have been advocating, of having a nationwide strategy and
policy around the movement of goods----
Mrs. Napolitano. With whom?
Mr. Benjamin. Amongst--at the Federal level.
Mrs. Napolitano. What agencies?
Mr. Benjamin. All of them. And that there be a central
cabinet-level representation that focuses on this on a systems
approach, as Mr. Peyton said, and Mr. Bridges, and everybody
has commented. We need a systems approach, a national
perspective, to manage these----
Mrs. Napolitano. But what would be the priorities that you
would want this super-agency to be able to work on to relieve
the--your ability to be able to move forward? Anybody?
Mr. Bridges. Well, if we look at the airline industry, for
instance, there is the FAA that primarily focused on aviation
issues. There is the Federal highway that deals with the road.
I believe that we, in the national freight scenario, we would
need to have an agency quite similar to the FAA that kind of
brings all of the variant pieces together that look at the
complete supply chain, from the water side all the way through
to the destination.
So, that is creating more bureaucracy. But hopefully it
would be a streamlined process that can alleviate some of the
road blocks as we go forward.
Mrs. Napolitano. Mr. Anderson?
Mr. Anderson. Yes. I think my experience, that interagency
cooperation isn't always in Washington, what that sounds like.
I think it is imperative that the leaders of each of those
organizations makes sure that that is a priority for their
agency, they work directly together, and they drive it down
through the agency.
Mrs. Napolitano. And should the word come from Congress or
from the administration?
Mr. Anderson. Both.
Mrs. Napolitano. Any other comment, anybody? Yes, Mr. Koch?
Mr. Koch. I would simply note that I think you can look at
some examples where things have been done very, very well with
the existing system. And I would point to Mr. Bridges' port.
Norfolk is dredged, it has got intermodal rail connections, it
has got the heartland corridor, it has got new rail service
into North Carolina. It has thought about what it needed, it
has invested in what it has needed, and it has worked with the
Federal agencies very cooperatively.
Much of the highway infrastructure that needs to be
approved is subject to approval of the State highway plans. It
is not a DC issue, it is for California, the California highway
plan. And I think a lot of people struggle getting freight more
recognized in the State highway plans; a lot of these projects
require the State government to make them a priority, rather
than to have it imposed from Washington.
So, I think there are a lot of people who are actually
making things work with the present system, and I think Mr.
Bridges is a testament to that. So it can work, but it requires
a lot of coherent planning and commitment.
Mrs. Napolitano. Would really request any suggestions come
to this subcommittee, to the--because----
Mr. Peyton. Can I add one last thing? I think that, you
know, again, when we look at where we are going, as a Nation,
this is what we have to educate people to, everybody to, that
this is the future, that moving cargo effectively is going to
be the way we stay competitive in this world. So, in doing
this, I think it is to everybody's best interest that we
understand that.
Mrs. Napolitano. Thank you, Mr. Chair, for your indulgence.
Mr. Gibbs. Thank you. Well said. Representative Landry?
Mr. Landry. Thank you, Mr. Chairman. Mr. Peyton, I got to
tell you, I am with you, OK? I mean I really am. I mean I
appreciate your comments, I appreciate your position. It is
something--this issue is very near and dear to me. I have got a
number of ports in my district. The Port of Orleans is actually
in it, but I have got a lot of smaller ports.
But I got a question. If Congress injected $500 million
into the Corps' budget to address port needs--now I know they
need more than that, but just--do you have any idea how many
jobs we could create with $500 million?
Mr. Peyton. Well, let me tell you this. On the 62 projects
that are sitting there, it represents about a little short of
$7 billion. That $7 billion has been equated out to 100,000
construction jobs.
Mr. Landry. OK, all right. And----
Mr. Peyton. That is the only number I have to go off of.
Mr. Landry. OK. And Ms. Darcy, any idea how many jobs--if
we just gave you $500 million, how many jobs, directly, you
could--not only in construction, but either jobs saved, or
additional jobs created by improving our ports? $500 million.
Ms. Darcy. Sorry. The figure that we usually use for
construction jobs is $1 billion of construction funding would
create 30,000 jobs.
Mr. Landry. Wow----
Ms. Darcy. So, $500 million would be----
Mr. Landry [continuing]. 30,000? OK. Mr. Peyton, you
realize we spent $500 million on Solyndra to create 12,000 jobs
that are now gone? Do you understand how backwards this
Government is, how they don't know how to prioritize? How we
chase utopian green energy jobs at a time when 8 of our 10
largest ports are under draft restrictions?
I mean think about the amount--that amount of money,
100,000 here, 30,000 there, 12,000 jobs at Solyndra. I just
wanted to set the table so that you understand that this fight
is not only at this table and this committee, it is within this
entire administration.
Now, Assistant Secretary Darcy, do you believe our Nation's
energy security should be a priority?
Ms. Darcy. Yes, I do.
Mr. Landry. OK. Well, the Corps ties its funding for ports
based upon tonnage transported to and from ports versus the
importance of the commodity being transported. Is that correct?
Ms. Darcy. That is correct.
Mr. Landry. OK. In my district, ports like Iberia and
Fourchon are vital to the energy security of our Nation. In
fact, 30 percent of the oil and gas consumed in this country
flows through the Port of Fourchon. And yet it receives only
$1.5 million for its dredging needs, which is not a--it is
barely enough to keep the maintenance of the port operable.
This is not to deepen the channel, this is not to improve the
channel, this is simply a maintenance.
Don't you think that somewhere in the equation we should be
looking not only in strictly a tonnage formula, but in the
commodity that is transported back and forth, or the security
needs of the country?
Ms. Darcy. Congressman, I think you raise a good point. But
as you outline, we do currently just base it on the tonnage.
Perhaps we need to take a look at the value, or--especially in
light of energy security--in looking at how we prioritize.
Mr. Landry. Well, great. That is a great answer, and I
would encourage you to do so, because it is not only small
ports like myself, like these ports in the district that I
represent, but there are a number of small ports out there as
well, that a--just a little bit more of investment in
infrastructure could mean a lot more to those ports, in the way
of creating jobs and allowing the towns and cities around them
to flourish.
And so, I just think that sometimes we should keep an eye
on not only a tonnage formula, but exactly strategically where
we want to be in this country. So I encourage you to look to
that.
Mr. Chairman, I yield back.
Mr. Gibbs. Thank you. Representative Brown, do you have
another question?
Ms. Brown. Yes, sir. I do have a couple of comments. First
of all, let me just say, first of all, that the President
proposed that Congress dispose. So members of this committee
and Members of Congress pass a bill that cut Army Corps'
funding--that is first of all--and cut it by 10 percent.
Now, if the members on this committee don't like certain
aspects of it, pass your bill. You got 200 and what members?
All you need is 218 to pass any bill you want to pass. You
control this House, and you keep talking about waste and abuse.
Iran and Iraq and Afghanistan, over $60 billion. Halliburton.
So this is Transportation. And in the past, Transportation have
always worked bipartisan. And if you don't like any of the
proposals of the stimulus, some job proposal, pass your bill.
And you only need 218. And you got one more. So you got one. I
would vote with you on any bill that you have to straighten out
this mess that we are talking about today.
So, you don't have to talk the talk, you can walk the walk.
Introduce the bill. I guess that is the purpose of the hearing,
to lay out how we can improve the funding.
Now, let me just tell you something else. I am not going to
vote for a bill for Transportation and Infrastructure for the
next 6 years that is $230 billion. I mean, clearly, we need
about $500 billion or $600 billion. Transportation is
comprehensive. You can't just dredge the port and then don't
have the roads or the rail system to move it, as you just said.
I mean I have been on this committee for 19 years, and we
have always worked together. And we are the committee. We are
the engine that put American to work. But it is a problem. I
mean we are just talking about it, and you know, we are just
moaning and groaning. You control the House. You control the
votes. Do something, my fellow Americans. Do something,
Transportation Committee. Put your bill on the floor. Bring it
to the committee.
I mean I am sick and tired of all of the talk when people
are unemployed. Someone said something about the nature--
``Well, you know, the American people, they understand about
how you mortgage your home.'' Yes, but who paid cash for it?
You do--you don't have no money to pay cash for your home or
your car. You finance it. You pay your bills. And clearly, we
need to put American people to work.
Our competitors are there, and they are not competing with
Mississippi and Alabama and Georgia, we are competing with the
Japanese and the Chinese. And they have some strict rules when
they pull up in Jacksonville. They say they want those ships in
and out in a matter of minutes, or they are going somewhere
else.
And so, we have got to have our A-game going on, and we
need to work together. Our committee has always worked
together. So, if you got a better idea, put your idea on the
board. Bring it to the floor. Bring it to this committee, and
let's get it--let's get--you know, I have a Governor just talks
about, ``Let's get the work.'' Well, let's get the work.
And I have some questions that I want to ask, and I know
you going to send the answers to the committee, but I want to
make sure that I get the answers to those questions about the
Jacksonville Port. And I would like to know what it is that we
can do to cut some of this paperwork that they been talking
about. And I agree with it, it is getting more and more
paperwork, and we are not getting the projects done.
So, with that, does anyone have any quick comments to what
I have had to say?
[No response.]
Ms. Brown. Any comments?
[No response.]
Ms. Brown. Well, thank you very much. I guess you all agree
with me.
[Laughter.]
Mr. Gibbs. Representative Harris, did you have a question
or comment?
Dr. Harris. Yes. Just very briefly, Mr. Bridges, I just
have a question for you. Because I think where we left off
before, I had asked the assistant secretary what the potential
other uses of the Harbor Maintenance Trust Fund is. Because her
testimony was, well, you know, this is what we have to decide.
You know, we think there is an appropriate amount spent on
dredging--I personally disagree with that. But then it says
that we actually have to compare other potential use of those
funds.
Is there any other potential use that is more important, in
your mind, than getting through that backlog of dredging?
Mr. Bridges. The short answer is no. We believe that if we
expend the revenues that come in on an annual basis that will
meet our requirements for maintenance dredging--and from the
AAPA's perspective, that is what the fund was designed to do--
that is what we would like to have it do.
Dr. Harris. How much do you think the backlog is, the total
backlog of dredging, to bring all our ports into their
authorized width and depth?
Mr. Bridges. I am told that if we were to utilize the $1.5,
$1.48 billion that is collected, if we were to spend that on
maintenance dredging, we could get all of our requirements met.
Dr. Harris. Over how many years would that take, of
spending the total amount?
Mr. Bridges. We really don't--I really don't know the
answer to that.
Dr. Harris. You don't know. I might ask you to go to your
member ports and ask them, you know, exactly how much they
would need if tomorrow--their wish list--tomorrow we started
dredging all the ports to their width and depth, what it would
cost.
Mr. Bridges. I will----
Dr. Harris. Thank you very much. Thank you very much, Mr.
Chairman.
Mr. Gibbs. Mr. Bishop?
Mr. Bishop. Thank you, and I will try to be brief. I think
we all agree that we need--we want to see a greater proportion,
if not all, of the revenue that comes into the Harbor
Maintenance Trust Fund expended for the purposes for which it
is assessed, and that is maintenance of our harbors, and seeing
to it that they are dredged an appropriate depth.
But let's recognize, as I said before, the reality. There
is only a couple of ways we are going to get there. And one of
those ways does not include berating witnesses. We are only
going to get there if we are either willing to list the--lift,
pardon me--the statutory cap that we have imposed on ourselves
for discretionary spending going forward, or if we are willing
to make the hard decisions in terms of how we prioritize
expenditures within the energy and water appropriations bill.
Now, I will note that the energy and water appropriations
bill that passed this House with pretty broad support on the
majority side--not every majority member voted for it, but most
did--encapsulates, it carries forward the very problem that we
are talking about. It carries forward the fact that we are only
spending $700 million out of a $1.5 billion pool that is
collected.
So, if we are really serious about this, which I think we
all are, then we have to write an energy and water
appropriations bill that spends the money. And if we are
willing to do that, or if we are going to do that, we have to
be willing to, as a committee--and I would ask the chairman if
we could try to structure a process where we will go to the
Appropriations Committee and say, ``This is a priority for us,
and here are some things that you have made a priority in the
past that we now think should be less important.'' That is
something that we have to do.
We are not going to get--we can have every hearing we
want--and the RAMP Act, by the way, I am a cosponsor of the
RAMP Act, I think it moves us in the right direction, but it
does not get us to the Promised Land, if we define the Promised
Land as spending $1.5 billion. It just doesn't. We have more
heavy lifting to do.
And I very much hope that, as Mr. Peyton said, we can lay
down our swords and we can act on what we all say is a
priority. And, Mr. Chairman, I hope that we can find some means
of doing that with the energy and water appropriators that are
our colleagues, so that we can actually move beyond the stage
where we are all complaining, but we are not willing to make
the hard decisions to put in place a decision.
With that, I yield back.
Mr. Gibbs. Well, I thank you. I want to thank all the
witnesses for coming in. I think we highlighted how important
it is to make sure we have the infrastructure in place to meet
the 21st-century goals, and especially what is going on
globally with the Panama Canal widening and deepening.
Secretary Darcy, you are quite aware of that. And if we are
going to be competitive in the world, we have got to make sure
we get this infrastructure done right. So, I look forward to
working with you in the future so we make progress on that
endeavor.
It is time to--committee is adjourned. Thank you.
[Whereupon, at 12:17 p.m., the subcommittee was adjourned.]