SCA Weekly Report | July 19 - 23, 2021

Shipbuilders Council of America

20 F Street NW, Suite 500

Washington, DC 20001

www.shipbuildersusa.org

SCA Weekly Report | July 19 - 23, 2021

CONGRESSIONAL NEWS

Senate Armed Services Completes Markup of FY22 NDAA

The Senate Armed Services Committee completed work on its version of the fiscal year 2022 defense authorization bill in closed session this week. No bill text is yet available, however, the committee released a 40 page summary of the bill. The bill would authorize the Pentagon to spend $740 billion in FY22, a boost of about $25 billion above the President’s request. The legislation, like the President’s budget request, does not include a separate Overseas Contingency Operations (OCO) request – any war-related costs are included in the base budget.

According to the summary, the bill authorizes $3.716 billion for Arleigh Burke-class destroyers and restores the 2^nd ship to the budget. The bill also authorizes $50 million for surface combatant industrial base stability initiatives, and “expresses continued support for a multi-ship procurement of amphibious warships and directs the Secretary of the Navy to provide a report on several potential acquisition strategies for such platforms.” Additionally, the legislation would prohibit the “early retirement of naval vessels unless the Secretary of the Navy makes certain certifications to Congress.”

The bill was advanced out of committee by a vote of 23-3. The bill now heads to the Senate floor for consideration. 

House Tees Up Spending Bill Minibus Package

The House has added seven funding bills to the House floor schedule next week, meaning they’ll be ready for passage if Democratic leaders can whip enough support. The minibus includes the spending bills for Commerce-Justice-Science, State-Foreign Operations, Legislative Branch, Labor-HHS-Education, Agriculture-FDA, Energy-Water, Interior-Environment, Military Construction-VA, Transportation-HUD and Financial Services.

The House is not expected to vote this summer on the remaining two funding bills — Homeland Security and Defense — because the measures are controversial and would likely fail.

House Speaker Nancy Pelosi (D-CA) and Majority Leader Steny Hoyer (D-MD) privately warned Democrats during a meeting earlier Tuesday that voting against spending bills this year will effectively cede power to Senate Republicans in negotiations over funding the government for fiscal 2022.

On the other side of the Capitol, Senate appropriators have yet to schedule markups or release bill text of any of the 12 annual funding bills. But Sen. Richard Shelby of Alabama, the chamber’s top Republican appropriator, said the Senate spending panel might mark up three of the bills before the scheduled August recess but that Defense appropriations would be delayed until September.

Infrastructure Vote Fails; Bipartisan Group Continues to Work on Deal

Senate Republicans blocked debate on a vast and still-unfinished infrastructure plan, rejecting Majority Leader Chuck Schumer’s drive to forge ahead while negotiators from both parties struggle to complete details of the $579 billion package.

The 49-51 vote fell well shy of the 60 needed to begin debate. Schumer switched his vote to “no” so he can call up the bill again. Centrist Republicans involved in the negotiations said they need more time to hammer out the details. By early next week, they said, there should be enough votes to bring up the proposal.

“We have the number of Republicans necessary to succeed with the cloture vote on Monday or Tuesday,” GOP Senator Mitt Romney of Utah said Wednesday before the Senate action. He said “almost everything” has been resolved in the talks, which have bogged down in discussions over how to pay for the legislation.

Schumer’s decision to force the early test vote Wednesday afternoon spurred a faster pace in protracted talks, which began almost a month ago when a group of 22 senators involved in negotiations announced agreement with President Joe Biden on the general outlines of the plan. A deal would mark a significant breakthrough in the drive for a massive infusion of money for roads, bridges and other critical projects like expanded broadband Internet service and improvements to power grids.

Biden, appearing at a union electrical training center in Cincinnati, Ohio, was asked if he’ll get an infrastructure deal. “Yes, we will” Biden said Wednesday. Still, any negotiated package faces significant hurdles in both chambers.

In the Senate, with its 50-50 partisan split, the deal may not go far enough to gain support of all Democrats, who have narrow control of the chamber, and it will need 60 votes to get past any filibuster by opponents. Just 11 GOP senators aided the negotiations and agreed on its framework.

NAVY NEWS

Gilday: With Current Budget, Cutting Ships Necessary for Navy Long-term

In an interview this week, Chief of Naval Operations Adm. Mike Gilday discussed the investments he’s looking at to prepare the fleet emerging in 2025. That’s when the Navy will be on the cusp of receiving several new additions to bolster the service, Gilday said. Those include new Virginia submarines, the service’s first Constellation-class frigate, the latest Arleigh Burke-class destroyer Flight III, among other weapons systems. By then, the Navy also expects that half of its air wings will contain a mix of fourth and fifth-generation strike fighters with the further introduction of F-35C Lighting II Joint Strike Fighters. That investment strategy “gets us to a more capable, a more lethal fleet, but not necessarily a bigger fleet, unless we see a rise in the top line,” Gilday said, referring to an austere budget that he said keeps the Navy hovering at around 300 vessels, despite a mandate for it to build out to 355.

To circumvent budget challenges, Gilday has argued that putting several ships on the chopping block, a strategy known as divest-to-invest, will free up money for other, long-range investments that the Navy will need to remain competitive against growing challenges from China and Russia. That argument has been met with pushback from lawmakers, including Rep. Elaine Luria (D-VA), a retired Navy commander, who has said the Navy’s plan fails to consider more near-term challenges.

INFRASTRUCTURE NEWS

Bipartisan Infrastructure Plan Could Get another Chance after Senate Setback

A failed Senate test vote dealt a blow to the bipartisan infrastructure framework, but the plan could have a chance to move forward again as soon as Monday. The Republicans working to craft the $1.2 trillion proposal voted Wednesday against advancing it as they draft final legislation. Despite the setback, the 22 Democratic and GOP senators drawing up the plan said they hope to release and push ahead with a bill “in the coming days.”

The vote leaves President Joe Biden’s top legislative priority in flux. If the bipartisan deal to revamp transportation, broadband, and utilities falls apart, Democrats will have to consider whether to pair physical infrastructure plans with their separate $3.5 trillion package to address climate change, child care, and health care.

Biden considers both plans critical to boosting the economy and preparing the country to face a warming planet. Asked Wednesday during a CNN town hall, Biden said he believes the Senate will vote Monday to advance the bipartisan framework he negotiated with senators.

Democrats have undertaken a tricky strategy to get both planks of their agenda through Congress. They aim to pass the physical infrastructure plan with Republican votes, then expand the social safety net without GOP support.

Senate Majority Leader Chuck Schumer, D-N.Y., has said he wants to make progress on both fronts before the chamber leaves Washington in August. He aims to pass the bipartisan infrastructure plan and approve the budget resolution that would allow Democrats to get their bill through the evenly split Senate with a simple majority.

OFFSHORE WIND NEWS

Vineyard Wind Signs Labor Agreement as it Prepares for Construction

The Vineyard Wind project continues to make progress to becoming the first offshore wind farm in U.S. federal water. On July 16, the project held a signing ceremony to commemorate the first project labor agreement for an industrial-scale offshore wind project in the United States. The contract is another important step for the project that gained federal approval in May and is also seen as a model for the future of the U.S.’s offshore wind industry. It is anticipated that roughly 500 union jobs will be created through the pact.

Proposed Staten Island Offshore Wind Terminal Gathers Momentum

The investment fund, Apollo Global Management, has signed for the exclusive right to invest in the new Arthur Kill Terminal project, a greenfield port facility in Staten Island that will be purpose-built for offshore wind construction and maintenance. New York-based Atlantic Offshore Terminals (AOT) will lead the development of Arthur Kill Terminal, which is slated to begin operating in late 2025 - just in time to support a boom in offshore wind projects in the New York Bight. The future terminal would be built on a 32-acre plot adjacent to the Outerbridge Crossing, the bridge connecting Perth Amboy, New Jersey with the southwestern tip of Staten Island.

IN THE NEWS

OMSA Launches Vessel to Document Jones Act Violations

The Offshore Marine Service Association (OMSA) has launched the Jones Act Enforcer, a first-of-its-kind vessel that will be used to gather video and photographic evidence of Jones Act violations. Evidence of violations will be submitted to authorities, made public, and shared with the media, OMSA said. OMSA said the Jones Act Enforcer is designed to produce evidence that show foreign-flag vessels that continue to violate U.S. law by transporting merchandise between points in the U.S., utilizing their significantly lower crewing costs to undercut U.S. vessels and U.S. workers.

Carnival Expects Three-Quarters of Capacity to Resume Sailing in 2021

Sixteen months after the cruise industry paused operations, the largest cruise corporation, Carnival Corporation, now reports that it hopes to have as much as three-quarters of fleet capacity in operation by the end of 2021. Five of the company’s brands are currently sailing, with it expected to expand to eight brands in the coming days and weeks. Operations in Asia and Australia however remain suspended with no target dates to resume sailing.

Port of Corpus Christi's Cargo Boom Continues With Record Quarter

In June, the Port of Corpus Christi set a new all-time record quarter and a record first half of the year, moving nearly 80.5 million tons of cargo in the first six months of the year. The port’s first-half 2021 tonnage saw a five percent increase over the same period in 2020. The boost came from a soaring 72 percent year-over-year increase in LNG exports, a 42 percent year-over-year increase in agriculture commodities, and a 3.6 percent increase in crude oil exports.

If you have any questions, please do not hesitate to contact Paula Zorensky on the SCA staff.