Maritime Update
Obama Administration Budget FY 2011
The Obama Administration released its fiscal year 2011 Budget on February 1, 2010. A review of the full fiscal year 2011 Budget submission provides the following information regarding programs affecting the maritime industry.
MARITIME ADMINISTRATION (MarAd)
- Maritime Security Program – The Maritime Security Program will be funded with $174 million to provide payments of $2.9 million for each of the 60 vessels in FY 2011, the same as the funding level for 2010 fiscal year.
- National Defense Tank Vessel Construction Program – Zero funding is requested, identical to fiscal year 2010 budget request.
- Title XI Shipbuilding Loan Guarantee Program – No new funds are requested for loan guarantees, the same as in the fiscal year 2010 budget request.
- Ready Reserve Force – $332 million for the Ready Reserve Force (RRF) from the Defense Department budget, reflecting an increase of $55 million over the fiscal year 2010 budget request. The Defense Department will continue to reimburse the Department of Transportation for operation and maintenance of the RRF from funds appropriated to DOD. MarAd will continue to manage the program. RRF vessels continue to serve in support of U.S. military operations overseas.
- Operations and Training – $164.4 million, including $100 million for the U.S. Merchant Marine Academy (of which $31 million is directed toward capital improvement projects), and $15 million for support of the State Maritime Schools and $49.6 million for MarAd operations. The operations and training account request is $11.5 million more than the fiscal year 2010 budget request.
- Ocean Freight Differential – $175 million is programmed, identical to the amount contained in the fiscal year 2010 budget request.
- Ship Disposal – $10 million is programmed to dispose of obsolete vessels in the National Defense Reserve Fleet, a $5 million reduction from the fiscal year 2010 budget request.
- War Risk Insurance Revolving Fund – $2 million is requested to provide interim insurance for those vessels operating in defined war zones until commercial insurance can be obtained on reasonable terms and conditions. The Fund carries forward an unobligated balance of $48 million. These figures are the same as those contained in the fiscal year 2010 budget request.
- Small Shipyard Grant Program – Under the terms of the American Recovery and Reinvestment Act of 2009, $100 million was appropriated to the small shipyard grant program. No new funds are requested in the fiscal year 2011 budget, identical to the fiscal year 2010 budget submission.
HOMELAND SECURITY (DHS)
- Coast Guard – The fiscal year 2011 budget request includes $6.878 billion for operating expenses of which $1.5 billion is earmarked for ports, waterways and coastal security; $1 billion for aids to navigation; $161 million for marine environmental protection; $589 million for marine safety; and $130 million for ice operations. The fiscal year 2011 budget provides $1.112 billion to continue the agency’s Integrated Deepwater Systems Program to be used for vessel replacement.
- Transportation Security Administration – The Administration has proposed $218 million for the Transportation Threat Assessment and Credentialing Program, of which $174 million is in direct appropriation and $44 million is derived through fee assessments. A portion of this account is used to fund the Transportation Worker Identification Credential initiative. In addition, the fiscal year 2011 budget request includes $300 million for the Port Security Grant Program, a reduction of $100 million from the 2010 budget request.
- U.S. Customs and Border Protection – The Administration has proposed funding for certain maritime related programs including $300 million for the port security grant program and $153 million for the Automated Commercial Environment initiative.
DEFENSE DEPARTMENT (DOD)
- National Defense Sealift Fund – $935 million for direct program activities and $1.05 billion for strategic sealift operation and maintenance.
- Army Corps of Engineers – $2.361 billion is requested for operation and maintenance; $1.690 billion for construction; and $209 million for Flood Control, Mississippi River and Tributaries.
AGRICULTURE DEPARTMENT (USDA)
For 2011, the budget provides an increase of some $100 million over the fiscal year 2010 request for foreign assistance programs of over $2 billion including:
- P.L. 480 Title I Export Credits – No funds were requested for this program in fiscal year 2011.
- P.L. 480 Title II Humanitarian Food Aid – The Administration requests $1.690 billion for this program, the same amount that was contained in the fiscal year 2010 budget request.
- Bill Emerson Humanitarian Trust – The Trust is a commodity reserve designed to ensure that the U.S. can meet its international food assistance commitments. Up to 500,000 metric tons of wheat, corn, sorghum, and rice can be held in the Trust. The Secretary is authorized to release commodities from the Trust for programming under P.L. 480.
- Food for Progress – The Food for Progress Act of 1985 authorizes U.S. agricultural products to be provided to developing countries and emerging democracies that have made commitments to introduce and expand free enterprise in their agricultural economies. The fiscal year 2011 budget assumes a program level of $146 million for the Commodity Credit Corporation funded portion of Food for Progress which is expected to meet the minimum tonnage level based on current commodity price projections.
- McGovern-Dole International Food for Education and Child Nutrition Program Grants – The Program provides for the donation of U.S. agricultural commodities and associated financial and technical assistance to carry out preschool and school feeding programs in foreign countries, as well as maternal, infant and child nutrition programs. For 2011, the budget request funding is $210 million, an increase of $10 million over fiscal year 2010 budget.
- Local and Regional Food Aid Procurement Program –$25 million is requested in the fiscal year 2011 budget program, the same amount that was contained in the fiscal year 2010 budget request.
EXPORT-IMPORT BANK
The fiscal year 2011 budget estimates that the Bank’s export credit support will total $19.4 billion, and will be funded by a requested $93 million of new budget authority in addition to amounts carried over from prior years. The budget also proposes $106 million for administrative expenses.
FEDERAL MARITIME COMMISSION (FMC)
The agency’s budget is programmed at $25 million, the same amount that was contained in the fiscal year 2010 budget request. Major program areas for fiscal year 2011 are carrying out investigations of foreign trade practices under the Foreign Shipping Practices Act; maintaining equitable trading conditions in U.S. ocean commerce; facilitating compliance with applicable shipping statutes through outreach and oversight; and reviewing ocean carrier operational and pricing agreements to guard against excessively anticompetitive effects.
ST. LAWRENCE SEAWAY DEVELOPMENT CORPORATION
$32 million is requested to fund the operation, maintenance, and capital infrastructure improvements of the U.S. portion of the St. Lawrence Seaway between Montreal and Lake Erie. The funding request is financed through appropriations from the Harbor Maintenance Trust Fund and other non-federal sources.
February 5, 2010