AMO Currents - Consolidated Appropriations Act fully funds MSP at authorized level, sustains programs key to U.S. merchant fleet in fiscal year 2017

AMO Currents - Posted: May 5, 2017

Consolidated Appropriations Act fully funds MSP at authorized level, sustains programs key to U.S. merchant fleet in fiscal year 2017

President Trump has signed the Consolidated Appropriations Act, 2017 - legislation that fully funds the Maritime Security Program at the authorized level for fiscal year 2017 and sustains other programs crucial to the U.S.-flag maritime industry and merchant fleet.

Congressional leaders announced they had reached a bipartisan deal at the beginning of the week after passing a temporary spending measure to prevent a shutdown of the federal government. The omnibus appropriations bill to fund the government through the end of September 2017 moved to approval in the House of Representatives and Senate earlier this week.

The Maritime Security Program is now fully funded at $300 million for fiscal year 2017, bringing it to the level authorized in the National Defense Authorization Act of 2017. This amount is an increase from the authorized and appropriated level of $210 million in fiscal year 2016.

The funding increase amounts to a stipend of $5 million per ship for each of the 60 U.S.-flagged commercial ships in the Maritime Security Program fleet. The stipend for fiscal year 2016 was $3.5 million per ship.

The MSP supports a fleet of militarily-useful U.S.-flagged ships, which are crewed by U.S. merchant mariners and operate in international commercial trades. The ships and their corresponding privately-owned intermodal cargo systems and networks are available to the Department of Defense for military sealift operations and in national security emergencies. The cost of the MSP amounts to a small fraction of the projected $65 billion it would cost the government to replicate this sealift capacity and the intermodal infrastructure and global cargo networks provided to the DOD by private-sector MSP participants.

The appropriations act also provides funding for U.S. food-aid programs, including Food for Peace Title II, for fiscal year 2017.

The House Appropriations Committee, led by Chairman Rodney Frelinghuysen (R-NJ), released the following statement regarding the $2 billion in funding for overseas food aid contained in the omnibus bill: "This includes $1.466 billion in base funding for the Food for Peace program and a one-time, $134 million increase to address famine crises around the world. It also includes $202 million for the McGovern-Dole International Food for Education and Child Nutrition program. Both of these programs deliver food to those in need around the world and are flagship examples of the Administration's goal to 'Buy American, Hire American' by sending domestically-produced food on U.S.-flagged ships around the world."

The base funding level of $1.466 billion for Food for Peace Title II is the same amount appropriated for fiscal year 2016, supporting the shipment of U.S.-sourced commodities to nations in need. Under U.S. cargo preference requirements, at least 50 percent of U.S. government impelled food-aid shipments must be carried by U.S.-flagged vessels.

American Maritime Officers and American Maritime Officers Service maintain leading roles on Capitol Hill in advocating full funding for the Maritime Security Program fleet and Food for Peace Title II, as well as keeping the funding in the Title II program dedicated to providing U.S.-sourced food aid to nations in need, as opposed to cash transfers and vouchers.

The appropriations act includes approximately $274.5 million in funding for the National Defense Reserve Fleet, including expenses related to the Maritime Administration's Ready Reserve Force. In fiscal year 2016, the appropriation was approximately $273 million.

The legislation appropriates $6 million for the National Security Multi-Mission Vessel Program to continue with the design and construction of a vessel type that can be used to produce multi-purpose training ships for the state maritime academies and the U.S. Merchant Marine Academy - ships that could also be used in defense sealift and humanitarian crisis missions domestically and abroad. In fiscal year 2016, $5 million was appropriated for this program.

The appropriations act also provides $3 million for the administrative expenses of the Maritime Administration's Title XI shipbuilding loan guarantee program, which provides loan guarantees to support private-sector financing of, among other things, the construction of commercial ships at U.S. shipyards.