Committee Cuts $250M from Navy’s Hurricane Aid Request

Friday, March 31, 2006
The House appropriators’ decision to slash $250 million from the Navy’s funding request to aid Gulf Coast shipyards ravaged by Hurricane Katrina is worrying Navy officials who fear the move can result in shipbuilding delays and cost increases, The Hill reported. But House appropriators will likely have to debate with their Senate counterparts during conference negotiations over supplemental spending bills for the war on terrorism and disaster assistance. The House passed the supplemental March 16. The Senate Appropriations Committee is scheduled to take up the bill on April 4. The $250 million would have gone mostly to Northrop Grumman shipyards in the region. The shipbuilder’s yard in Pascagoula, Miss., sustained significant damage. The company has another facility in Mississippi and two shipyards in New Orleans and Tallulah, La. House appropriators decided to cut $250 million from President Bush’s request, to $775.2 million. Those cuts were made because “estimates and possible reimbursements for damage to shipbuilding facilities from private insurance companies have not yet been determined,” according to the committee’s release. The White House has already protested the cut in a statement of administration policy issued before the House voted on the bill. While the Navy does not directly comment on Capitol Hill decisions, service officials have pointed out that it is critical to have the shipyards up and running as soon as possible. The concern is not only about delays and price increases but also about losing skilled engineers and workers, who may find jobs in other areas if the shipyards they were working in can’t recover fast enough. The Navy will pay for any damage to its own equipment — ships either being built or in the shipyard for maintenance, as well as equipment and tools used specifically for Navy requirements. The shipyards are insured, and the insurance would pay for the company’s facilities. But it could take years until the insurance claims would pay out. The company would reimburse the government for any insurance money overlapping with the supplemental. Northrop Grumman has already used $350 million of its own money to get the yard up and running again. (Source: The Hill)
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