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Archive for the ‘Water Resources’ Category

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FMC on HMT: Unintended Consequences

In Congress, Federal Government, Infrastructure, Ports, Water Resources on October 18, 2012 at 11:52 am

In July the Federal Maritime Commission released a study that claims a relationship between the Harbor Maintenance Tax (HMT) charged in U.S. ports and logistics decisions that result in some imports bypassing U.S. gateways and moving through Canadian ports to American destinations.

Concerns at the Ports of Seattle and Tacoma that the HMT are tilting the competitive field prompted the study.  These are long standing concerns that predate the cargo fee.

In the mid-80s Congress eventually acceded to the Reagan Administration’s insistence that the cost of maintaining Federal coastal channels be recovered through a new user fee.  The main question was how to collect the fee, which at that time was proposed to cover 40 percent of channel O&M.  It is now 100 percent.

The issue of maintenance fees and cost-sharing on improvement projects—another Reagan demand—prompted a split among port authorities. A “small port coalition,” consisting of ports of all sizes, many of which handled cargo that made it easy to find political allies, wanted to avoid a fee that would burden low margin cargo such as export grain and coal.  Some of those ports with outsize channel maintenance requirements fought any suggestion that the new policy require their dredging costs to be supported by fees collected in their ports.  If a port had to rely on its cargo volume to cover its dredging costs the New Yorks, Norfolks, and Oaklands would have an advantage, not to mention those ports with naturally deep water.

Notwithstanding the efforts of the “large port coalition” that dominated the container trade and favored a charge on cargo tonnage, the small port coalition had success in defining the revenue mechanism. Key committee leaders, most notably Chairman Bob Packwood (R-OR) of the Senate Finance Committee, settled on a fee that would go easy on American export commodities and, as it happens, raise a tidy sum for the new Harbor Maintenance Trust Fund. The new HMT would be applied to cargo value, not tonnage.

Seattle and Tacoma (members of the large port coalition, for the curious reader) opposed the HMT provision. They sought to be exempt from the cargo fee, fearing the advantage it would create for nearby Vancouver, B.C. in the container trade. (Did they even imagine a Prince Rupert was in their future?) Their objections to the HMT won them only a section in the new WRDA ’86 law that tasked the Treasury Department, where the Customs Service was located, to study and report to Congress on any effect the HMT had on diverting cargo from U.S. ports.

A year or so later Customs reported back with its conclusion: no effect of diversions.  With no formal report to refer to one wondered how Customs arrived at that determination.

In the 25 years that passed since the HMT became law we have seen the tax increase from 0.04% to 0.125%, the Supreme Court quickly came to a 9-0 decision and voided the HMT on exports, and the Harbor Maintenance Trust Fund’s unexpended and seemingly untappable balance has ballooned to over $7,000,000,000.

Through those years, and with the addition of Prince Rupert to American West Coast woes, the Sea-Tac ports have pressed the argument that the HMT contributes to the loss of cargo. The fact that those ports benefit little by the HMT revenues—they require little in the way of dredging—is salt in the wound.

Enter the Federal Maritime Commission. Washington State senators asked the FMC for analysis of the extent to which the “HMT and other factors impact container cargo diversion from U.S. west coast ports to west coast Canadian and Mexican ports.”

The FMC was fertile ground for such a request. In the 1980s Maryland Port Administration attorney Richard Lidinsky energetically fought “Canadian diversion.”  Today he chairs the FMC.

The FMC inquiry commenced in late 2011, public comments were received, and the resulting “Study of U.S. Inland Containerized Cargo Moving Through Canadian and Mexican Seaports” was released in July 2012.  The conclusion: no FMC related law or regulation is violated in the use of the Canadian ports but the HMT plays a role to the extent that it adds to the cost of transportation.

The FMC study noted that ports compete on “a wide variety of variables.” (Such was the essence of the shipper and carrier comments–easily the most detailed and responsive comments submitted in the public process–that didn’t confirm the report’s presumption that the HMT is a factor in decisions to use Rupert.)  The study found no significant difference in cargo transit times moving through the U.S. and Canadian gateways. It acknowledged that the rates through Prince Rupert are lower but stated that other factors in the supply chain make it “difficult to conclude that transportation costs are significantly lower.”

The study employed a ports elasticity model developed years before by Dr. Robert Leachman. The FMC concluded that if the HMT (estimated to average $109 per FEU) were eliminated in the Sea-Tac ports, or if an equivalent charge were put on the U.S. bound cargo when crossing the land border, “up to half” of the containers “could revert to using U.S. west coast ports.” The report concluded that the HMT “does appear to be one competitive force that is not based on natural competition, but may indeed be a legislative disadvantage on some U.S. ports” i.e., an unintended consequence.

What is one to make of the study?  It is not conclusive in the way we like to have questions settled.  The FMC document has its critics within the agency, with two commissioners voting against its release. One called it “a political policy paper to justify a predetermined conclusion.” The other wondered why, if the HMT is such a discouragement, does Canada-bound cargo use U.S. ports?

After 25 years do we yet know the extent of the problem, assuming it is a problem?

If anything, the study gives Sea-Tac and their advocates in Congress something to quote as they lobby for a fix. One such fix, an exemption from the HMT, is not in the cards. (Why would other ports go along with that?)

Legislation has been drafted to apply an equivalent charge on U.S. cargo when it crosses the land border (a “land border loophole”?), the revenue from which might be put to making freight improvements. But is the FMC study enough to convince Federal policy makers to slap a fee on cargo entering through Canada or Mexico? Dress it up to look like a user fee to support infrastructure improvements but it still will come off as a penalty for not using an American gateway. The cargo interests will fight it, probably the railroads, too. And don’t expect the Commerce and State Departments and the White House Trade Representative to be mute on the question.

The valuable but imperfect HMT (title  for another blog entry?) continues to create problems while feasible solutions elude us.  Meanwhile, look to the east. There on the horizon are Nova Scotia ambitions to establish a Rupert-on-the-Atlantic.

The fight against the HMT is 25 years long and counting.  Pbea

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The WRDA Mantra

In Congress, Infrastructure, Water Resources on October 16, 2012 at 7:28 pm

Perennial Question: Will there be a WRDA?  Perennial Answer: Eventually.

The WRDA question is one of the more predictable queries heard over the course of every two-year Congress.

It is legislative Zen among the water resources community in Washington where mind-and-body is focused on achieving “WER-da.”

Likewise, that focus is found in the hinterland where flood control, navigation, shore erosion and environmental restoration projects are the infrastructure of economic stability and survival.

The Water Resources Development Act and its ancestral statutes dating back to the early years of this country are the bases for the civil works program conducted by the U.S. Army Corps of Engineers on behalf of the Nation, States, municipalities, ports and communities.

For the better part of the 112th Congress WRDA has been missing inaction (pun intended).  But at a Senate Environment and Public Works Committee hearing just weeks ago WRDA was anything but dead. The urgency to get a bill done was the message of the day that Chairman Barbara Boxer (D-CA) wanted everyone to know.  Her witnesses, requiring no prompts, were on-message.

The U.S. Chamber, International Union of Operating Engineers, Cargill, the American Association of Port Authorities, and the American Society of Civil Engineers said for the record why it is important for Congress to produce water resources legislation.

As the absent Ranking Minority Member James Inhofe (R-OK) said in his printed statement, “Our witnesses are here to further demonstrate the case for passing a WRDA bill.”  And so they did.

They talked about infrastructure integrity, jobs, trade, economic growth, competitiveness, etc. There were no hard questions, only ones to elicit a single response. {We want WRDA.}

“I hear you,” said Chairman Boxer.

Everyone including those committee members present talked toward the same goal of producing a WRDA bill to address various economic, infrastructure and public safety needs. One senator, observing that the one key witness not present for a hearing on this subject, the Corps of Engineers, made the point that significant reforms in the Corps civil works process are needed in the next WRDA.  The witnesses also said reforms and process streamlining are needed.

In her opening statement Barbara Boxer said “there’s no reason why we can’t get WRDA done.”  She held up as a model the bipartisan MAP-21 surface transportation bill that the committee produced earlier in the year and now is law.

Senator Boxer spoke in fully bipartisan terms. Pointing to how the labor and business witnesses were sitting side-by-side at the table before her she said that was purposely done:  “I want to make the point that we are united.”

The chairman said the hearing was to lay the groundwork for action in the lame duck session after the election. She told her colleagues that in the next weeks she will send around a draft bill and wanted their comments and suggestions. It’s going to be a bipartisan and “strong” bill.  Senator Inhofe‘s statement referred to how the lead senators already are “working hard to negotiate a WRDA bill.”

Senator Boxer asked the witnesses if they would be ready to work to get WRDA done much as stakeholders worked to see MAP-21 made law. They said they will. The supporting statements of other trade groups were added to the hearing record. No doubt they are unanimous in their views. {[We want WRDA.}

Congress adjourned a few days later for the final campaign stretch. The House and Senate will return for what promises to be a contentious lame duck session to address some unfinished items not the least of which is the looming “fiscal cliff.”  We’ll see then if Chairman Boxer is able to form a water projects and policy bill with her party  opposites on the committee.

I’m not clever enough to thrive in Vegas but I can handle this odds analysis. It’s not a good bet that a WRDA bill will become law this year.

In a short amount of time Boxer and Inhofe will have to get committee consensus on what can be the politically, and sometimes environmentally, touchy subject of water projects back home. The civil works process itself has been a particular target of senators who know the problem but lack agreement on a solution. Assuming the Boxer-Inhofe committee comes to agreement on detailed legislation the bill will have to be good enough to pass muster in the full Senate where one senator’s objection in the last weeks of Congress can kill a bill. Then there is the House where the no-earmarks rule has chilled even the thought of a WRDA bill escaping from the Transportation & Infrastructure Committee. Then there is the White House, which continues the long tradition of executive disinterest in the civil works program.

It’s a bumpy road ahead.

Chairman Boxer, who along with others of her colleagues genuinely want to move WRDA through Congress, put a good face on things at the hearing. Alas, there is little time left. After the election who knows how much interest legislators will have in the hard work of producing a projects and policy bill when some of them are packing up to leave Congress and others just want to get home for the holidays.

Then again, as Senator David Vitter (R-LA) said in noting it has been five years since WRDA 2007 was made law, the committee should start now even if their efforts have to extend into the new Congress that convenes in 2013.

Eventually.    Pbea

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HMTF: A Bump and RAMP Strategy

In Infrastructure, Ports, Water Resources on April 27, 2012 at 1:19 pm

Bump and RAMP doesn’t sound like a sophisticated legislative strategy.  It certainly isn’t a complicated one.  But when one is talking about the world of dredging one must do what one can to make it sound interesting.

As I’ve discussed previously the RAMP Act is an attempt to remedy a failing of current law.   A tax is collected on some of the beneficiaries of port infrastructure–specifically channels, turning basins, anchorages–in order to cover the cost of maintaining–specifically dredging–that Federal navigation infrastructure.

You can read about the Harbor Maintenance Trust Fund (HMTF) by going to previous postings:  RAMP Gets Its Chance and  The Seven Billion Dollar Clue.  (Hmm…those like a lot like Hardy Boys titles.  Who?…oh, never mind.)

The procedural (point-of-order) solution in the RAMP legislation is not a complete solution.  There is nothing to mandate full funding of channel maintenance.

Absent an automatic funding mechanism that effectively bypasses congressional appropriations–which ain’t happening–the president will have to budget for channel maintenance every year and Congress will retain the prerogative to decide how much to spend.

Yesterday, today and tomorrow ports and other stakeholders have to make the case to Congress in support of the Corps of Engineers channel maintenance program.  While the RAMP lobbying effort, led by the dredging industry, has proceeded so has the routine effort to increase the level of appropriations for channel maintenance. Bumping up the annual funding has been the persistent and particular point of emphasis for the American Association of Port Authorities along with others.  And the effort has seen success.

Since FY 2009 the appropriation from HMTF funds has progressively grown from $773 million to $833 million in FY 2012.  The FY 2013 budget, now subject to appropriations committee attention, estimates $839 million will be used from the fund.

Most, but not all, of the appropriated amounts apply to port O&M costs.  Some goes to dredged material management facility construction, offsets for St. Lawrence Seaway tolls on the U.S. side, and for administrative overhead costs. If we look at the HMTF allocation to O&M the growth over that same timeline has been from $737 million to $767 million, in actual spending, and $779 million budgeted for FY 2013.

That’s modest growth, especially considering the fact that over the same period HMTF annual revenue (HMT receipts + interest) grew from $1.253 billion to an estimated $1.864 billion in FY 2013.

But it is growth in a time when Federal spending isn’t exactly growing like gangbusters.

One might attribute the growth to the RAMP effort, which commenced in 2008, and to AAPA’s bump-up strategy.  Those complementary and not exclusive efforts have shone a bright light on the inconvenient fact that the infrastructure maintenance buying  power of dedicated user-taxes has been capped while Federal-managed channels are allowed to shoal.

As of this writing, 44 percent of the House Members have cosponsored Rep. Boustany’s RAMP Act (HR 104) and over one-third of the Senate has signed on to Sen. Levin’s S. 412.  Those numbers reflect a bipartisan sensitivity to taxes collected but not used-as-promised as well as a greater awareness of the correlation between full-depth channels and the ability of U.S. exports to compete successfully on the global market.

That increased appreciation on Capitol Hill for the muddy, mundane world of maintenance dredging explain the two most recent and significant developments to date.

First, the House of Representatives voted, by voice, in support of full funding of Federal channel maintenance.  The vote was an easy one.  It doesn’t have an enforcement provision,  so there is nothing in the approved amendment to ensure full funding in future appropriations.  That explains why the amendment–a watered down HR 104, also sponsored by Rep. Boustany–didn’t have the opposition of committees that object to the RAMP Act as well as any other proposals for mandatory spending from trust funds.

That said, it is slightly stronger language than the “sense of Congress” provisions contained in the House and Senate transportation bills and which simply say what the Administration and Congress should do.  So, for the first time, the full House is associated with the view that the total spending from the HMTF should equal HMTF revenue.

Second, and quantifiably more significant, the House Appropriations Committee this week approved a record level of funding from the HMTF for FY 2013.   It is a handsome, marvelously round number of $1 billion.  It is over $150 million more than in the president’s budget, which itself represents an increase.

We don’t know as yet what is the comparable HMTF allocation on Senate side but the draft committee report is quotable:

The Committee understands that the O&M budget fluctuates from year to year due to periodic maintenance dredging requirements, however, the general trend should be for this budget to increase.

Yes, indeed…all the way to the annual level of user-taxes being paid to keep the channels fully maintained.  So far, the trend is in the right direction.  Pbea

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HMTF: The Seven Billion Dollar Clue

In MTS Policy, Ports, Water Resources on February 11, 2012 at 6:04 pm

The Harbor Maintenance Trust Fund (HMTF) is overdue for a remedy. How do we know? The unspent balance of Harbor Maintenance Tax (HMT) receipts, plus interest, is a mere $7,000,000,000.

HMT receipts are accounted for in the channel “maintenance” trust fund. However (not to be too picky) the Federal channel system is not fully maintained, and not for lack of money (see “mere” above). That and other information can be found in this 2011 report by the Congressional Research Service.

(A Moment for Trivia: The HMT is considered by some folks a user fee but as the Supreme Court figured out, unanimously and with little effort, the value-based charge on cargo bears little relationship to the service being provided i.e., maintaining channel depths and other dimensions for vessels, and “therefore does not qualify as a permissible user fee” under the export clause of the Constitution.)

The HMT is collected on import and domestic cargo handled at most US ports. On cruise tickets, too. The majority of what is collected comes from the high volume, high value imports; much less from comparatively low value domestic cargo moving between American ports. US exports cannot be charged, sez the Supreme Court.

The HMT was set to cover 100 percent of the cost of coastal channel maintenance. But if 100 percent of the channel maintenance that is needed isn’t done then 100 percent of the funds isn’t spent. It’s the kind of math that even I can understand.

Well, you might say, that’s okay because the money is safe in a trust fund. It is dedicated for maintenance dredging, right? It will be there when it’s needed, right?

Sure, but the balance has grown every year since 1994 and, more to the point, full funding is justified now. According to the Corps of Engineers the total channel system, including small recreational harbors, would cost around $1.3 billion a year. And even if the money is sitting in a trust fund collecting interest, it actually is being put to an unrelated purpose. Turns out the HMTF is a handy offset, especially when you are running a Federal deficit. Makes the deficit a little lower–$7,000,000,000 lower.

The money is collected for a specific purpose but is not being spent fully for that purpose. More than a few folks argue that is not fair. Especially the ones who have a direct stake in channel dredging such as ports and dredging contractors.

But then fairness has been an issue since the HMT and the HMTF were made law.

In the mid-80s Congress deliberated how to offset the cost of Federal channel maintenance (originally by 40 percent and then a few years later by 100 percent). Some ports argued that because heavy cargo weighs down a ship the new user fee for maintaining channel depth should applied to cargo tonnage.

Other ports took the opposite view, pointing to how heavier cargoes are often low value as well as low margin US exports. They said the charge should be on cargo value, arguing that containerized cargo could afford the charge. And since the vessel operators had already succeeded in fending off a fee on the vessel (arguably the direct user of the channel) it came down to which ports and kinds of cargo had the most, or least, votes in Congress.

The “fairness” question was decided in favor of the greater number of ports, which were export oriented and/or whose channel maintenance costs might be expected to exceed channel fee collections in those harbors.

As was patently obvious the major international gateways would produce a substantial portion of the revenue. Indeed in 2005—yes, most HMTF data is musty stuff because the Federal government unreliably produces the mandated annual report—the top cargo value ports of LA (13.7%), NYNJ (12.2%) and Long Beach (12.2%) represented nearly $380 million, which was more than one-third of HMT receipts. The top ten ports by value handled over 68 percent.

Some of them, as it happens, also require little in the way of channel maintenance. (I’ll get more into that subject in a later post.)

The HMT and the HMTF are in ways unfair and they are imperfect by design. The value basis of the tax can be explained as a seaport maintenance policy crafted for nation where no seaport has the same cargo, cargo type, volumes or geography and whose Constitution forbids Congress giving “preference” to one port over another (Article 1, Section 9).

We can’t be so generous and understanding with the way the HMTF is crafted in law and managed in the budget process.

Changing the basis of the HMT is politically unlikely (see “snowball’s chance in Honolulu”). As for the HMTF, changing the law is not easy but it is doable. (To be continued.) Pbea

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Time for a Maritime Title

In Intermodal, Marine Highway, MTS Policy, Surface Transportation Policy, Water Resources on January 30, 2012 at 1:16 am

In a few days we will see if there is a maritime title, or section, in what is traditionally the highway bill.  What’s that, you say?  You heard right.

Back in July 2011  House Transportation & Infrastructure Committee Chairman John Mica (R-FL) let us peek at the planned contents of the surface transportation bill that finally will get its debut in committee on February 2nd.

That summary, aptly named A New Direction, included a description of maritime transportation provisions, which would have as much symbolic as substantive significance for those of us working the water.  Including a few marine transportation provisions in the once-in-a-decade highway and transit legislation could prove to be a foot-in-the-door for more of the same when the next big surface bill comes along.  (Some of us impertinently suggest that marine transportation in fact is a surface mode…the wet one.)

But one can argue that the foot has been in the door for quite some time.  The passenger-oriented Ferry Boat Discretionary Program has been the lone marine transportation element in surface transportation policy and program since 1991 and the landmark ISTEA. Interestingly, the ferry program is managed by the Federal Highway Administration–a fact that some folks in the Maritime Administration probably still have difficulty acknowledging–because that is where the money is.

John Mica has for years talked about having a transportation “vision” that is intermodal, multimodal and makes greater use of the maritime.  The Chairman’s intentions revealed last year with regard to a maritime title included three basic objectives:

  • Ensure full use of the Harbor Maintenance Trust Fund resources; only 60 percent of annual revenues are appropriated for channel maintenance.
  • Encourage  more maritime related activity including “short-sea shipping” by exempting cargo from the Harbor Maintenance Tax when moving between US ports.
  • Improve Corps of Engineer civil works project delivery.

This week the committee will meet to produce the bill.  There may be a maritime title with some placeholders to be added later.  Here’s what we see in our crystal ball:

  • The Corps project piece is not expected to be in the bill.  Such typical WRDA subject matter may be held back more as a matter of legislative strategy than anything.
  • Jurisdiction over the particular legislative remedy for the HMTF issue–contained in HR 104–is shared with the House Rules Committee where there is opposition to the so-called RAMP approach.  Appropriators are fighting it as well.  If RAMP isn’t included in the bill it won’t be for lack of trying by many stakeholders in the port navigation sector who have encouraged over 150 legislators to co-sponsor.
  • Maybe the topic that has the best chance of getting in the new maritime title is the HMT exemption for non-bulk cargo. But because the subject is within the jurisdiction of the Ways and Means Committee Mica’s transportation panel is expected to defer to the tax committee on bill language (likely to look like HR 1533).  So keep an eye on the Ways and Means hearing to occur this Wednesday. The HMT and HMTF issues will be heard and when that committee later meets to take up the transportation bill’s tax-related provisions we may find the HMT provision added.  (The subject of the vessel tonnage tax also is to be brought up at the Wednesday hearing.)

It looks like a maritime title will have, at best, a couple provisions. But if by the time the surface transportation measure goes to the House floor its 1000 or so pages include a maritime title–maybe only a wet highway provision to go with the dry highway ones–we should take a minute to savor a small provision and an encouraging direction for transportation policy.  Pbea

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The Mineta Speech, Pt.3

In Federal Government, Infrastructure, Leadership, MTS Policy, Ports, Water Resources on February 8, 2011 at 3:07 pm

Former Transportation Secretary Norman Mineta offered his audience at the North American Port and Intermodal Finance and Investment Summit recommendations “we can act on immediately” to address the inadequate “role of maritime issues in our national transportation policy.”    Here are Pt. 1 and Pt.2. Pt.3 follows…

It struck some people as a bit odd.  Here Norman Mineta was talking about changes that are needed to strengthen U.S. maritime policy but he waited until he was out of office  to raise them.  Perhaps these were ideas that coalesced in his mind only once relieved of the day-to-day tasks of office.  Maybe not.   Ultimately it didn’t matter.  At least he was raising them now.

“What is the path to victory?  I have ten recommendations we can act on immediately.  Some are major and some seem to be minor, but are critical to success.

“First, the Federal government must reorganize the Maritime Administration – MARAD.  I would rename it for what it should become – the Federal Maritime Administration, and I would combine virtually all of the Federal maritime responsibilities there.  It should reinvigorate the uniformed Federal Maritime Service and transfer the aids to navigation responsibilities from the Coast Guard to it.

“The portion of the Army Corps of Engineers whose responsibilities and capabilities for our domestic ports and waterways should be relocated to the Federal Maritime Administration.  The Army performing as domestic civil Federal engineers is not a role for the military and the country would save money and get a better product if these services were transferred to a single maritime agency.

“Secondly, the new agency must shift its focus to the condition of the nation’s ports and waterways and the role of this infrastructure in the totality of the U.S. transportation system.  The current agency has too many of its resources and its structure focused on the issue of ships and crews.

“Thirdly, the Merchant Marine Academy in Long Island should be renamed the National Maritime Academy.  It should be a Federal service academy where every graduate must perform his or her service in the Federal Maritime Service or as a commissioned officer in one of the other services as they do now including the Department of Homeland Security.  This Academy is one of the major assets of the Federal government and we need to give it our time and attention.

“Fourthly, the Federal government must develop a legislative reauthorization process that puts maritime issues on the same priority and level of importance that surface and aviation assets currently have.  If ports and waterways funding is always being relegated to parts of the surface transportation bill, or the defense bill, they will remain second-class subjects where the hope is to get your particular project an earmarked status.

“Fifth, the U.S. must revitalize its role in international maritime organizations and its maritime relations with other countries.  Whether its treaties or issues involving security and trade, the U.S. needs to give more time and attention to these areas.

“Earlier I said to achieve this refocus on maritime importance, state and local governments, port authorities, and other government entities reliant upon maritime trade must work with industry stakeholders to educate American citizens and their decision makers regarding U.S. reliance on a strong national maritime system.

“Therefore, I believe the next set of actions should begin with port and waterway interests and industry stakeholders – including financial players who want to enter this sector – creating a national association whose charter is to accomplish the following action items:

“Educate the Congress and the presidential candidates on the role of the national maritime system and get hard commitments to take action.  Educate American decision makers and others on the role maritime assets play in how freight and goods are delivered to them.  Then enroll them in the effort to get maritime’s fair share of infrastructure resources.

“My final recommended action is that you accomplish all of the above by overcoming the inevitable opposition – not only from without but from within.  Within the maritime industry there are many agreements of mutual mediocrity.  People are familiar with this system and will not want to see it changed.  The ground is shifting under their feet and they imperil needed financial investment and the innovation and the efficiencies it brings.

“Also, there are issues that need to be addressed within the industry – labor agreements, the role that technology will play in the labor force, and how security issues will be addressed.  These are important issues that need to be vigorously debated and resolved – but they are not reasons to oppose raising the importance of maritime issues on the national agenda.  Take a side in these issues, fight for them, but do not let it dominate the larger objective.

“Finally, for those of you who are looking for quick investments in ports and maritime infrastructure, I’m not sure I’ve given you a lot of useful information.  And for you I’m afraid there is more bad news.  There are no quick rates of return to be made here.  Private investment into ports and infrastructure will have to be a true and long-term partnership.

“The up side as we say is that this is an industry that has the potential for tremendous growth and to have a real impact on our national transportation system.”

So there you have it.  A message that is important not so much for the specific recommendations made–although there are some good ones there–but for the fact that he was putting the spotlight on a problem that few public officials and industry people bother to talk about or even acknowledge.  See the next post for some additional  thoughts.   Pbea

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I’m Dreaming of a New Congress

In Federal Government, Intermodal, Marine Highway, MTS Policy, Surface Transportation Policy, Water Resources on January 4, 2011 at 12:25 am

The new two-year Congress commences on January 5th and it promises to be different in ways beyond the changed list of sworn-in men and women.

In fact I think that we could see the start of some structural changes in Washington and maybe…just maybe…something good could come out of it.  Am I betting on it?  No. Washington is too fond of the fetal position.

However this time issues of a more fundamental nature are getting attention.  Those issues have been around for a long time, long before ARRA, TARP and the big dollar spending and tax cuts necessitated by the severe drop in the economy.  And it appears that some spines were stiffened in the last election and not just on the Republican side.  There appears to be more universal acknowledgment than ever before as to:

  • Growing entitlement programs that dominate non-defense spending and with predicted revenue shortfalls.
  • A large defense budget we can’t afford to leave off the table when cutting spending.
  • A tax system in need of a significant overhaul and simplification.
  • An infrastructure policy of disinvestment that makes our transportation less efficient and dooms us to second place status in the world economy.
  • Our economic and national security in the hands of oil producing countries most of which, at best, do not share our democratic values.

There is a potential for consensus that could slowly build around putting in order the nation’s fiscal house and addressing other policy deficits.  It is possible.  (Then again I thought it was reasonable to expect the Giants to take on the New Jersey label when they made the move to the Meadowlands.)

Still, hope persists because those are serious problems that undermine our long term competitiveness.

Closer to home…there are comparatively smaller issues that are fundamental in their own way and deserve attention in the new Congress.  Wading into the policy weeds, here are some things I would like to see Congress address over the next two years:

  • A vigorous marine highway program built on the converging imperatives to reduce petroleum consumption and emissions in the transportation sector.
    • Leverage private investment dollars in new vessel construction and incentives for users of blue and brown water service.
    • Encourage State initiatives to adopt marine highways as elements in the interstate transportation system.
    • Waive the Harbor Maintenance Tax for intermodal cargo moving in the domestic trade.
  • Improving understanding of marine transportation and the contribution it makes and, even more, can make.
    • Examine what is needed to update a US maritime policy to enable the private sector to break the cycle of decline and the public sector to incorporate US flag shipping in surface transportation improvements.
    • Improve funding and human resources for the Maritime Administration, which remains a lesser modal agency in the USDOT family.
    • Renew the effort to coordinate and elevate maritime related issues among the many agencies including more buy-in by USDOT, the one department that has the most to gain.
  • Fixing Federal water resources policy, especially as regards navigation.
    • Ensure port channel maintenance funding on a par with Harbor Maintenance Tax collections.
    • Fix the too-long flawed, too-long Federal (WRDA) process of planning, funding and constructing navigation projects.
    • Distinguish between frivolous earmarking and the prosecution of fully vetted navigation projects that provide economic security in most regions of the country.

The difference between the list above and the list below is that the latter is more politically doable…if Congress and the Administration would pay it attention.   Pbea   (this entry is a revised version 1.4.11)

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WRDA: Commonsense Earmarking

In Federal Government, Infrastructure, Leadership, Politics, Water Resources on December 20, 2010 at 8:01 pm

A restaurant is moving into our nearby Del Ray Alexandria neighborhood (and not nearly soon enough, I might add).  It is unabashedly called Pork Barrel BBQ.

The name–chosen by a  couple of former Senate staffers now opening their first restaurant–has plenty of context in the Washington area where “pork barrel” is a mud that gets slung by persons of all partisan and ideological stripes  deservedly or not.  The observation goes…”One man’s pork barrel is another man’s needed project” (or favorite eatery, as the case may be).

But let’s reject the term for such time as it takes to rationally debate the issue of earmarking.

The previous post on this blog discusses how a broad brush is being used in the “earmark” debate in Congress where schizophrenia has been in great evidence as party members opine on the subject of how earmarking should be treated by House and Senate rules starting next year.

You can tell that rhetoric and ideology are getting their way when House GOP leadership is telling the rank and file to cut their griping and just deal with it.  It being a prohibition on all earmarking (writ broad).

The thinking person should have problems with that.  Putting aside an obvious constitutional argument, let’s consider how not all project types are alike.  And to keep this short, let’s stipulate that while some earmarks are  little more than grand ideas others have been subjected to considerable analysis.  Put water resource projects in the latter category.

Federal water projects go back to 1824 when Congress told the US Army Corps of Engineers to make rivers safe for navigation.  Today the Corps’ civil works mission includes navigation (the Federal system of coastal and inland channels), protection against floods and shore erosion, and other project types.  Today projects are put through  an extensive and expensive series of wringers: environmental, engineering and economic analysis, EISs, White House sign-offs, reports to Congress, contracts between local project sponsors and the Federal government (covering sharing of costs, provision of lands, etc.), congressional authorization of projects that satisfy the various tests (see WRDA), and  subsequent funding decisions by Congress.  Oh, and there’s the public input opportunities along the way as well as more recent provisions for “peer” review of Corps feasibility studies.

As Amy Larson of the National Waterways Conference put it in her letter to Republican leaders, “water resources projects are scrutinized, arguably, to a greater extent than any other capital investment program in the government…”

In his letter of November 29, 2010, Kurt Nagle of the American Association of Port Authorities told the leaders “it is vital to find a solution that provides a process that enables investments in needed improvements in transportation infrastructure to move forward in a non-earmark environment, especially new-start construction projects.”

Yes, you are bound to find “pork” by someone’s definition even among scrutinized water resources projects but that can be managed through oversight by appropriators.  But if the leadership is not taking the time to understand differences among project types, the high hurdles that navigation projects must overcome to qualify for authorization and funding, or the simple fact that most of the nation’s navigation system consists of FEDERAL channels that Congress is obliged to maintain and improve in the national interest, then they appear to be engaging in little more than indiscriminate mud slinging.   Pbea

 

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Congress Should Ban/Allow Earmarking

In Federal Government, Politics, Water Resources on December 17, 2010 at 1:28 am

Step right up to the Washington Sideshow! See the lobbyist do strange things.

Go ahead.  Don’t be afraid.  Ask me about earmarking.  Then watch my head spin, my eyes bulge, and listen as I speak in exasperations, convolutions and contradictions.

Outside the Beltway earmarking might be a specialty of tattoo artists.  Inside the Beltway, and in the public sector among countless State and local officials–and even in the private sector–earmarking is about addressing solving problems and getting business done.  It is what you ask of your Senator or Member for your town or company or non-profit.

Earmarking, rarely adequately-explained in the media, is usually defined as bacon-brought-home.  The water supply project.  The library addition.  The in-the-bag contract with the Army.  The jet fighter the Air Force doesn’t want but your constituents want to build.  The genome research grant.  The road extension.

The claim is that earmarking costs money that otherwise would not be spent and, in any event, should not be spent in this time of record deficits.  Others respond that it represents “only” less than 1 percent of the cost of a major funding bill.

Defenders of earmarking reach for the Constitutional argument: Congress and Congress alone was given responsibility for making funding decisions.

Besides, goes the insulting tag line, why should Congress defer to “faceless,” “unelected” “bureaucrats” to decide what projects to fund or grants to award?

As a practice congressional earmarking grew significantly over the past 10 or so years.  Today thousands of earmarks populate annual appropriations.  Over 6,000  projects were in the last enacted surface transportation bill, SAFETEA-LU.  (The name that includes the then committee chairman’s wife’s name is itself an earmark.)

Recent congresses have adopted ever tighter rules to improve transparency and to formalize making earmark requests.  However in this post-election period we see earmark critics empowered to the point of sending once-proud practitioners to the public confessional from which they emerge chastened and converted to the cause.

The Washington Sideshow can be entertaining.  Righteous conservatives decry earmarking and then do an about-face as if it the real implications of an earmark ban on their ability to help their districts suddenly dawn on them.  (Doh!  I need that road project!)

Okay, enough about Congress.  What about your head spinning?

Okay. Here goes. Earmarking has gotten out of hand.  It’s the self righteous indignation about earmarking that has gotten out of hand. It used to be about bringing home the pork; today the farmyard is emptied of its livestock.  But there is an unreasonable demand for purity by tea party adherents and Republican leadership. Yes, but there definitely are bad earmarks and that’s got to stop.  But there is nothing bad about helping your district get funds for needed sewer lines. Something needs to be done.  Yes, something needs to be done.

Okay, okay.  So your head can spin.  What does this have to do with the MTS?

You will have to read the next post.  Here’s a clue…WRDA.    Pbea

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Next WRDA a Policy Bill?

In Infrastructure, Water Resources on November 3, 2009 at 3:29 pm

WRDAlite2

WRDA (say “wurr-da”) sometimes is an elusive, even mythical, thing.  When it appears out of the Capitol Hill mist–like Brigadoon–it’s not with the reliable–albeit once-in-a-hundred years–clockwork of that fabled village.   It is usually defined as a biennial water resources authorization bill but it rarely takes such predictable, finished form as a president might come to expect on his desk every two years…assuming he wants it there.

Part of WRDA lore (and lure) is that it is tailor made for end-of-congress action on the eve of congressional elections.  Before returning home Members would wrap up the bill and their press releases touting what WRDA holds for their districts.  For, above all, a Water Resources Development Act is a projects bill.  Indeed part of the legend–not without  good reason–is that for WRDA to get through Congress it must be laden with projects.  No projects, no critical mass.  No critical mass, not enough aye votes.

WRDA 2007, the most recent version made law, was propelled in part by the huge Everglades project.  It was not without controversy but as an environmental restoration project the Everglades project gave the bill essential critical mass and acceptability among many in the environmental community which often is critical of project bills.

Legislators submit their wish lists.  Even many Members who disdain the practice of earmarking.  Port channels.  Beach replenishment.  Flood control.  Environmental projects…these ever more so.  They include wastewater treatment, water supply and the like.

The foundation of any WRDA is projects that move “through the pipeline,” much as the Everglades restoration project did.  They are subjected to Federal feasibility and environmental studies and then Secretarial and White House review.  An interminable process to some.  Projects exit the pipeline, usually, as recommendations for formal authorization,  WRDA being the next step in a civil works project’s journey through government.

When it comes to critical mass, it looks as if WRDA 2010 could end up WRDA Lite.  Fewer projects and lower cost.  So far only a couple of projects have emerged from the pipeline.  Some folks suggest we may have more of a WRDA policy bill than a projects bill.  That’s possible.

As one example, ports have wanted the law changed to secure the Harbor Maintenance Trust Fund.   Harbor Maintenance Tax revenues go into the general treasury and only around 60 percent of the proceeds actually are spent on channel maintenance.   There’s meat for a WRDA.

We will have to see whether there will be sufficient oomph of any sort to power this next WRDA.  We may get a clue later this month.  The House Water Resources & Environment Subcommittee will hold its first WRDA hearing  on November 18th. Pbea