SCA ALERT – FY13 SHIPBUILDING FUNDING SUMMARIES
These tables and explanatory notes are provided as a summary of defense shipbuilding budget activity, both appropriation and authorization, that has occurred in the House of Representatives over the course of the past two weeks. Both files, one for Shipbuilding and Conversion, Navy (SCN) and one for the National Defense Sealift Fund (NDSF) reflect the annual marks completed by the House Armed Services Committee and the House Appropriations Committee The Defense Authorization bill is currently on the House floor, but no adjustments to the funding amounts for shipbuilding programs are anticipated. The Defense Appropriations Bill was voted out of full committee on Thursday; the timing of floor debate is not known at this point. If you have any questions regarding funding for a specific program, please contact Ashley Godwin. These tables will be updated as Congressional activity continues.
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SEQUESTRATION UPDATE
Leadership at Odds over Looming Budget Crisis
President Obama and Senate Majority Leader Harry Reid on Wednesday rejected House Speaker John Boehner’s call to begin negotiating an increase in the debt limit and addressing other coming budget crises, seemingly slowing any progress that Congress will make in reaching a deal. Boehner sought to push up the timetable for negotiations when he warned Democrats that he would not support an increase in the debt limit, anticipated to be needed later this year, without spending cuts equal to or greater than the increase. Reid said at the same meeting that he would not talk about a debt limit increase until Congress first determines what to do about the sequester and threatened to oppose any effort to turn off the sequester unless it is replaced with “a balanced agreement that pairs smart spending cuts with revenue measures asking millionaires to pay their fair share.” It is widely believed that no comprehensive deal is possible until after the November election. In recent weeks there has been increasing talk about extending the tax cuts that expire at the end of the year for three to six months, as well as postponing the sequester for the same period.
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BUDGET UPDATE
House Appropriators Mark-up FY13 Defense Appropriations Bill
On Thursday the House Appropriations Committee held its full committee markup of the FY13 Defense Appropriations bill. This follows the Defense Subcommittee markup that was held on May 8. In total, the legislation provides $519.2 billion in non-war funding, an increase of $1.1 billion over the fiscal year 2012 level and $3.1 billion above the President’s request. The bill also contains $88.5 billion for Overseas Contingency Operations (OCO) for Defense activities related to the Global War on Terror. The House appropriations bill funds 11 ships in total – the 10 the Navy requested plus a third DDG-51 destroyer. New ship construction plus funding for advance procurement, service-life extension programs and more bring the total amount appropriated to $15.2 billion, almost $1.7 billion more than the request. House appropriators also included $792 million to maintain and modernize three cruisers the Navy had planned to decommission. The FY13 Defense Appropriations bill was adopted by the full committee on a voice vote.
The HAC defense appropriations report can be read HERE
The HAC defense appropriations bill can be read HERE:
House leadership plans to bring spending bills to the floor when the House returns on May 30 for a week and a half before recessing again for a week on June 8.
House Appropriators Mark-up FY13 Homeland Security Spending Bill
On WednesdayMay 16, 2012the House Appropriations Committee held its full committee markup of the FY13 Homeland Security funding bill which also funds the U.S. Coast Guard. The Homeland Security Subcommittee marked up the bill last Wednesday May 9. The Homeland Security appropriations bill provides a total of $10.0 billion for the U.S. Coast Guard, an increase of $211.7 million above the President’s request and $63 million below last year’s level. Among the efforts funded by the additional money would be two additional Fast Response Cutters and funding for long-lead-time materials for a seventh National Security Cutter. The Committee also recommends additional funding for enhancements to critical depot level maintenance programs. Floor debate on the bill has not yet been scheduled, and the House adjourns today (Friday 18 May) for a two-week recess.
The HAC homeland security appropriations report can be read HERE:
The HAC homeland security appropriations bill can be read HERE:
House Concludes Debate on FY13 Defense Authorization Bill; Administration Threatens to Veto
The House today (Friday 18 May) concluded debate on the FY13 National Defense Authorization Act, including the 142 amendments that were accepted by the Rules committee for consideration. The House now adjourns for a two-week recess. The bill authorizes $554 billion for national defense and $88 billion for Overseas Contingencies Operations, consistent with the House budget resolution, which is nearly $4 billion more than the President’s budget request, but it is still less than last year’s request. The House increases Shipbuilding and Conversion funds (SCN) by nearly $900 million, primarily for advance procurement of an additional submarine and destroyer to the 2014 shipbuilding program. The House also fully funds the Navy's request for Ship Depot Maintenance adding $68 million for cruiser retention. The White House on Tuesday threatened to veto the defense authorization bill, publishing an eight-page list of objections to what Republicans had proposed, which can be read HERE. Congress and the White House may eventually be able to work out many of their important differences on the authorization act; lawmakers have passed the NDAA for 50 consecutive years, and OMB’s memo closed with the promise that it was “looking forward to working with Congress to address these and other concerns.”
Senate Appropriators Delay Mark-up FY13 Homeland Security Spending Bill
The previously scheduled full Senate Appropriations Committee (SAC) mark-up of the FY13 Homeland Security appropriations bill has been delayed to next week.
SASC Mark-up Next Week
Next week the Senate Armed Services Committee will mark-up its version of the FY13 National Defense Authorization Act. The mark-up schedule is as follows:
- Tuesday, May 22, 2012:
9:30 am: Subcommittee on Seapower
11:00 am: Subcommittee on Readiness and Management Support
2:00 pm: Subcommittee on Emerging Threats and Capabilities
3:30 pm: Subcommittee on Airland
5:00 pm: Subcommittee on Personnel
- Wednesday, May 23, 2012:
9:30 am: Subcommittee on Strategic Forces
2:30 pm -9:00 pm: Full Committee
- Thursday, May 24, 2012:
9:30 am -9:00 pm: Full Committee
- Friday, May 25, 2012:
9:30 am – Completion: Full Committee
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LEGISLATIVE AND POLICY UPDATE
House T&I Committee Holds Hearing on Coast Guard Capital Improvement Plan
The House Transportation and Infrastructure (T&I) Coast Guard and Maritime Transportation Subcommittee held a hearing on Wednesday on the Coast Guard’s 5-year Capital Improvement Plan. The Subcommittee, chaired by Rep. Frank LoBiondo, examined the status and sustainability of the U.S. Coast Guard’s acquisition program and plans for recapitalizing its aging vessels and aircraft, formerly known as the Deepwater program. According to the Coast Guard’s 2007 baseline, completion of major acquisitions under this program was estimated to take 20 to 25 years and require over $24 billion. However, the Government Accountability Office has determined this baseline is no longer valid, and an additional 10 years and $5 billion may be necessary to replace these critical assets. Since the Subcommittee’s last hearing on the Coast Guard’s acquisition program, there have been several significant developments, including release of phase II of the Coast Guard’s Fleet Mix Analysis and assessment of current asset requirements and release of the Department of Homeland Security’s Major Cutter Study. A copy of the briefing memo can be read HERE:
Senate Schedules UNCLOS Hearing
The Senate Foreign Relations Committee has scheduled a hearing on the United Nations Convention on the Law of the Sea (UNCLOS) for May 23. Secretary of State Hillary Rodham Clinton, Secretary of Defense Leon Panetta and Chairman of the Joint Chiefs of Staff Gen. Martin Dempsey are slated to testify. The treaty governs international commercial rights and responsibilities for nations using the world’s oceans and has been ratified to date by 161 countries and the European Union. Two-thirds of the Senate must approve ratification of a treaty before it can go into effect, and Senate conservatives have been able to block ratification for over two decades. Democrats, however, say they think they might be able to muster the necessary votes this year, with the help of a coalition of interests that include the business community, oil companies, national security officials and environmental groups.
Navy in Talks with Guam Shipyard
The Navy will soon begin exclusive negotiations with Guam Industrial Services Inc., which does business as the Guam Shipyard, on the terms of a 40-year lease for performing ship repair, overhaul and maintenance of military ships onGuam. Guam Shipyard was the lone bidder for the lease contract. The military leased the ship repair facility in Apra Harbor to the government ofGuamyears ago when the Navy stopped operating its own shipyard. The local government, in turn, subleased the ship repair facility to Guam Shipyard, which employs hundreds of local workers.
US Offshore Wind-Powered Grid Project Gains Federal Approval
The U.S. Department of Interior has approved the Google-backed 'Atlantic Wind Connection' underwater power line project planned off the East Coast pending an environmental impact statement. Interior has announced there was no competitive interest in using certain areas of the Outer Continental Shelf to build a backbone transmission system 12 to 15 miles off the coasts ofNew Jersey,Delaware,MarylandandVirginia. The declaration means the Atlantic Wind Connection (AWC) project, a system spanning about 300 miles, will avoid delays associated with an auction if there had been competitors seeking to secure the same right-of-way on the shelf. AWC officials say it could shave one year off the time it takes to develop the project. With approval by the federal agency, the project can move forward with its permitting process, in contrast to what is happening inNew Jerseywhere up to 11 separate developers have expressed interest in building offshore wind farms off the coast.
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JONES ACT NEWS
Rep. Cummings Proposes More Requirements to Waive Jones Act
The House Rules Committee accepted Rep. Elijah Cummings’ (D, MD-7) amendment to the Defense Department Authorization that would make it harder for MARAD & DHS to waive the Jones Act including a range of new reporting requirements to DOT and MARAD. The proposed changes to waiving the Jones Act can be found HERE.
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MISCELLANEOUS
National Maritime Day is Next Week
The Maritime Administration has declared May 22, 2012 as National Maritime Day, to honor our maritime industry, our mariners and our proud maritime traditions. National Maritime Day was first declared by Congress in 1933. A MARAD statement issued reads: “America’s maritime industry has made significant economic and defense contributions to our country and its citizens in times of war and peace throughout our nation’s history. From its earliest beginnings prior to the American Revolution, through the War of 1812, Civil War, two world wars, the Vietnam and Korean conflicts, and more recently the wars in Iraq and Afghanistan, the U.S. maritime industry continues to support and defend our freedom and liberty.”
President Declares May 14 as National Defense Transportation Day, Transportation Week
On Monday, President Obama declared May 14 as National Defense Transportation Day. (You can read the proclamation HERE). Although the President mentions shipyards as integral to the foundation of American Infrastructure, he focuses on the investment of highway and rail infrastructure projects. In reaction, 15 bipartisan Members of Congress sent a letter to Homeland Security Secretary Janet Napolitano to urge the Administration to recognize the importance of the maritime industry in general and the Jones Act in particular. You can read the letter HERE.
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Announcements
SHIPYARD PHOTOS NEEDED FOR NEW SCA WEBSITE
SCA would like to feature pictures of member shipyards on our new website. Photos of shipyard workers and ships during all phases of construction, repair and maintenance are requested. Additionally we’d like to feature aerial and panoramic photos of yards and facilities.
Please send all photos to preever@balljanik.com. To send copies of photos on a CD, please mail to our address:
Shipbuilders Council ofAmerica
ATTN: Paula Reever
655Fifteenth Street, NW
Suite225
Washington,DC20001
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Canadian Shipbuilding Program
An announcement, found HERE, was received from the US Commercial Service for those of you interested in the Canadian Shipbuilding Program
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Support Joe Courtney
Come out to support Congressman Joe Courtney (D-CT-2) on Tuesday, June 19, 2012. For more information, click HERE.
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SAVE THE DATE
SCA’s Fall General Membership Meeting will be held October 15-17th, 2012. Mark your Calendars!
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NAVY LEAGUE SPECIAL TOPIC BREAKFAST – ADM. CURRIER, USCG
The Navy League will be hosting a special topic breakfast featuring remarks by Vice Admiral John P. Currier, USCG on Wednesday, May 30th. For more information on the event, click HERE.
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OPPORTUNITIES IN BRAZIL
Through our partnership with the U.S. Department of Commerce, Commercial Service Brazil, SCA has been notified that theBrazil’s Atlantico Sul Shipyard is in need of international partners to meet Petrobras requirements.
U.S. Commercial Service representatives are on stand-by to support introductions and can arrange visits to meet with Brazilian industry principals and tour the shipbuilding facilities in Recife. The formal trade lead can be found HERE.
So far, attempts by Atlantico Sul to find a substitute for former partner Samsung Heavy Industries have failed. There is a 4th new president for the shipyard with the same task in front of him. Please see link HERE
The U.S. Commercial Service Brazil reports that Camargo Correia and Queroz Galvao Group, two ofBrazil’s largest construction multinationals, will pay for shipbuilding expertise from any foreign partner that can help them build the ships and drills ordered by Petrobras. They are also open to hear any other offer that may lead to building the ships and platforms. Petrobras has a $ 250 billion 4-year investment budget for the next 3-4 years.