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Herberger: Title XI Critical To Continued U.S. Commercial Shipbuilding

To help ensure that the commercial shipbuilding rebound continues in the U.S., Maritime Administrator Radm. Albert Herberger recently testified before the Subcommittee on Commerce, Justice, State and Judiciary of the Committee on Appropriations of the U.S. House of Representatives, to propose the Maritime Administration's (MarAd) FY '97 budget request. A centerpiece of his presentation was the request for $44 million to fund and administer the Title XI loan guarantee program.

According to the Maritime Administrator, "The Maritime Administration's fiscal year 1997 budget request reflects the President's commitment to maintaining the status of the United States as a maritime nation." He further added, "In the absence of timely sealift, the strategic concept of power projection of heavy forces and global reach will be merely hypothetical. The commercial U.S.-flag fleet is a cost-effective source of military sealift." Military Security Program According to MarAd, a key element of this year's budget is the Maritime Security Program (MSP). The organization contends the new program will foster a modern, competitive American merchant marine at substantially lower costs than the existing operating- differential subsidy (ODS) program and seeks to ensure the continued operation of merchant ships under the American flag. The program also provides supplemental sealift capacity and an intermodal system which can be made available when needed to support the nation's armed services. MSP will be financed by budget authority subject to annual appropriations, and MarAd is requesting $100 million for FY '97 to support this critical program.

The MarAd budget also supports the National Shipbuilding Initiative (NSI) through its funding requests for Title XI and research and development programs. With the enactment of this initiative, MarAd is seeking an unprecedented increase in commercial shipbuilding projects.

Since the enactment of NSI in 1993, MarAd has approved more than $1.5 billion of Title XI financing for 144 vessels and three shipyard modernization projects as of February 23, 1996. Included among these approvals were 13 double hull tankers. MarAd contends that the funding for the costshared, cooperative research and development program will not only help the U.S.' economic trade and national security interests, it is necessary for helping U.S. yards effectively contend with international competitors.

An appropriation of $44 million is requested for subsidy costs and administrative expenses associated with new loan guarantee commitments for FY '97. Of the total, $40 million is required to cover subsidy costs and $4 million is to cover administrative costs. These resources will permit loan guarantees of about $570 million during FY '97 to strengthen America's shipyards and introduce newer, more efficient ships into the fleet.




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