One of the most critical issues facing America’s ability to provide assured support to American troops overseas is the looming funding shortfall for the Maritime Security Program (MSP) in Fiscal Year 2014 (FY’14) due to a $12 million carry-over funding anomaly. Unless the $12 million anomaly is fixed and MSP is fully-funded, United States-flag ships will be forced out of MSP, which will weaken our nation’s commercial sealift capability, send American maritime jobs overseas, and cost the taxpayer significantly more as the Federal Government must step in to support American troops by providing this commercial sealift capability itself.
MSP, which is congressionally authorized at $186 million per year, provides the Defense Department (DOD) with access to commercial assets – U.S.-flagged vessels, U.S. mariners, and global logistics networks – to support U.S. government sealift requirements. In fact, during the Iraq and Afghanistan wars, the vessels enrolled in MSP carried 95% of the DOD waterborne cargoes transported to the region. MSP participant carriers continue to provide essential direct support to American troops in support of Operation Enduring Freedom in Afghanistan. Working with the U.S. Transportation Command within the Department of Defense, the MSP carriers have developed and implemented ocean and intermodal solutions via the Pakistan Ground Lines of Communication (PAK GLOC), the Northern Distribution Network (NDN), and sea-air multimodal combination logistics.
Without the assured access to the vessels, crews and related intermodal assets that MSP provides, DOD would have had significant difficulty moving goods and supplies to our troops and would have incurred substantially more cost. The ability to access these commercial assets saves DOD a significant amount of money each year. If the U.S. government were to try to replicate this program through procuring and building such assets itself, it would cost $65 billion, plus an additional $9 billion annually to operate and maintain these assets. In other words, without access to the U.S.-flag vessels, American mariners, and intermodal and logistics networks provided by the commercial maritime industry, DOD would have to acquire, operate, and maintain U.S. government assets and intermodal systems at a significantly higher cost to the American taxpayer.
To prevent this loss in commercial sealift capability, a FY’14 carry-over funding anomaly must be addressed. When Congress adopted its last Continuing Resolution, there was a $12 million surplus in the MSP account that gave Congress the opportunity to appropriate $174 million for FY’13 rather than the authorized $186 million – thereby artificially setting the funding baseline at $174 million rather than $186 million. With the $12 million in funds carried-over into FY’13 plus the newly appropriated $174 million, Congress reaffirmed its support for a fully funded MSP.
There are not, however, any surplus funds remaining in the MSP account to be carried over and the funding baseline in the context of a continuing resolution for FY’14 is set too low to achieve the full funding as called for by the President and as intended by the Congress. Consequently, to ensure that the Department of Defense continues to have the U.S.-flag sealift capability it needs, Congress should correct this $12 million carry-over funding anomaly and appropriate the full Congressionally-authorized amount of $186 million for FY’14. If it does not, and Congress fails to include the full $186 million for the MSP but simply appropriates the same $174 million as in FY’13, the Maritime Administration has indicated that an initial four U.S.-flag MSP vessels will be removed from the Program, sending American jobs overseas and reducing the sealift capability available to the Department of Defense.
This potential funding shortfall is already raising readiness capability concerns within DOD. Commenting specifically on the potential FY14 funding shortfall for the Maritime Security Program and the resultant loss of U.S.-flag vessels and American mariners, the current commander of the U.S. Transportation Command (USTRANSCOM), General William Fraser, stated in a communication to Members of the House Armed Services Seapower Subcommittee that “USTRANSCOM relies heavily on the significant capabilities the U.S.-flag commercial sealift industry contributes to our nation.”
Gen. Fraser further warned that the loss of vessels in MSP coupled with “the loss of mariner jobs, access to the related intermodal logistics networks these companies provide, and potential loss of competition in certain trade routes may degrade our current support to forces deployed overseas and likely increase transportation costs to the Government.”
In the interests of our nation’s economic and military security, and to prevent the loss of militarily-useful U.S.-flag commercial vessels and the outsourcing of American maritime jobs, we ask Congress to address this carry-over funding anomaly and to approve full funding for MSP at its congressionally-authorized level of $186 million for FY14.