Ted Stevens

Mr. STEVENS

Mr. STEVENS. Mr. President, the Senator from Iowa is conferring off the floor concerning amendments that he may offer. So I suggest the absence of a quorum.

Mr. STEVENS. Mr. President, will the Senator yield?

Mr. STEVENS

Mr. STEVENS. Mr. President, I ask unanimous consent the Senate stand in recess subject to the call of the Chair. I will state to the Chair it will be about 30 minutes.

Mr. STEVENS

Mr. STEVENS. That is correct.

Mr. STEVENS. That is correct. It is an annual appropriation.

Mr. STEVENS

Mr. STEVENS. Mr. President, I suggest the absence of a quorum.

Mr. STEVENS. Mr. President, I think the Senate will note my partner across the aisle and I have been involved in a lot of issues together, particularly defense issues. With regard to these issues, at times the Senator from Hawaii has been chairman of the subcommittee. At other times, I have, depending upon the political winds of our country. But the Senator from Hawaii and I, as I have said in my opening statement, spent many hours over the last two decades trying to find a way to solve this problem. At one time when I was both chairman of the subcommittee of Appropriations and the subcommittee of Commerce, I secured the approval of the Senate, not once but twice, of a special program, the Eisenhower Build and Lease program. We tried to put it back into effect. We actually had the Congress appropriate more than $1 billion in a reserve to start that program. It was not possible to get it started because of the various conflicts within our merchant marine industry. We are now in a position of, really, suggesting to the Senate what amounts to a proposal like the Civil Air Reserve Fleet that we use in the event of emergency, where we have preexisting contracts with airlines that enable us to, really, commandeer our civilian airline fleet in order to meet our emergency needs. That is what we are talking about. We have now switched over to a concept of relying upon the private sector to build and we will lease. The Eisenhower program was building and then leasing. That went on for a period of time, but it just did not work because of the problem within the industry of subsidizing one line and not subsidizing another. It led to, really, problems within the merchant marine fleet. This answer that has come to us from the House, I think, is the most worthwhile approach that I have seen. It has taken a long time to work out. I am hopeful we will see approval of it today. Does the Senator from Iowa seek the floor at this time?

Mr. STEVENS. Mr. President, the Senate will soon consider House bill 1350, the Maritime Security Act of 1995. This is the companion legislation to Senate bill 1139, the maritime reform legislation approved by the Senate Committee on Commerce, Science, and Transportation earlier this year. This historic legislation is the culmination of over two decades of work by the Senate Commerce Committee. I said two decades. For most of the 1980's the senior Senator from Hawaii and myself spent hundreds of hours in congressional hearings, consultation with administration officials, and discussions with affected industry in seeking to find a way to stabilize and reform the Federal maritime programs. We became involved in this debate in large part because of our responsibility to the Senate and the Nation to find methods of improving our military support capabilities for the Department of Defense. The Navy and the Marines deploy the Maritime Prepositioning Force, which is our core capability to respond in an emergency to hostile actions worldwide which threaten the security interests of the United States. We have known for many years that advance military capability must be combined with the ability to provide both surge sealift capability and sustainment sealift capability. Without both surge and sustainment, we expose our fighting men and women to the dangers inherent in any military involvement far from our shores. The Congress has appropriated billions of dollars over the last 15 years to improve our surge sealift transportation capability. We have procured Fast Sealift Ships, Large Roll-On, Roll-Off ships, Ready Reserve Force vessels, and strategic lift aircraft to support our military forces in the initial days and months of battle. We now have the most technologically advanced surge sealift capability in the history of the world, and are approaching a maximum state of initial readiness. Military capability and surge sealift capability are, however, only two legs of the three legged stool for our advance deployed military force. The third leg is the ability to sustain these forces over extended periods of time, after we place them in foreign territory, far from home. The maritime security program in H.R. 1350 provides that third leg. Why is it necessary for the Federal Government to provide supplemental payments to U.S. companies to keep their ships under U.S.- flag? The answer is simple. We hold our U.S.-flag carriers to operating, safety, and labor standards far superior and far more costly than those imposed on foreign-flag carriers by their governments. Operators of U.S.-flag vessels must meet payroll taxes, including social security, unemployment insurance, Medicare, and Medicaid. U.S. carriers pay income taxes and a 50 percent penalty for repairing their ships overseas. These ships must be in compliance with more restrictive Coast Guard and OSHA safety regulations. In short, our Federal laws build in economic disincentives for U.S. companies to keep their vessels under the national flag. What is the national interest in keeping these ships under U.S.-flag? Opponents of the bill have pointed to Desert Shield/Desert Storm as evidence that commercial sealift can be procured in times of emergency. My questions to the Senate are two-fold: At what price, and in what state of readiness? Let me reemphasize to my colleagues in the Senate that there are no free meals in the real world. There will always be a price for an immediately available sustainment sealift capability in a trained and effective state of readiness. As chairman of the Senate Defense Appropriations Subcommittee responsible for managing the long-term costs of the Defense Department, I have come away with a much different lesson learned from Desert Storm. The costs of contracting with the private sector in an emergency come at a high premium and the state of readiness is inadequate. Logistical support is like an athlete's muscle--you must exercise these muscles early and often if you are going to compete and win in the field. The first lesson we learned from Desert Shield/Desert Storm is that foreign shipping companies can easily gauge the needs of the U.S. military and the availability of tonnage to meet these needs. The average cost to the United States for procuring U.S.-flag ships for sustainment sealift during Desert Shield was $122 per ton. Foreign- flag shipping, in contrast, charged rates averaging $174 per ton of cargo. Norwegian and Italian shipping companies, for example, extracted premiums in excess of 50 percent higher than their normal charter price and, in some cases, doubled their charter price. The second lesson from Desert Shield/Desert Storm is that the callup and coordination of civilian private sector operations to meet military surge requirements takes time. At the height of Desert Shield, we had over 120 U.S.-flag vessels called up and in service in the supply line to the Persian Gulf. Fifty-one of these ships were immediately available to the Department of Defense pursuant to their subsidy contracts with the Department of Transportation, and sixty ships were called up from the Ready Reserve Force [RRF] to supplement the commercial fleet. We also chartered over a dozen large roll-on, roll-off vessels from foreign shipping companies to carry heavy equipment and inventories. The RRF callup was painful in its early stages. The ships were being operated in a reduced state of readiness, and many were required to undergo extensive repair work in our shipyards before they could accept cargo. We experienced serious short-term manning problems as our maritime labor force scrambled to bring people out of retirement or other sectors of the economy to fill the berths in a national emergency. We had to wipe the cobwebs off the RRF and scrape for anybody who had ever sailed the high seas with a mariner's license. At the end, we had an active force of U.S. Flag ships with 3000 civilian, volunteer merchant mariners crewing the RRF ships and 100 U.S.-flag private sector ships time chartered to the Military Sealift Command. It was the U.S.-flag fleet which stepped into the gap and provided the sustainment sealift during the initial months of Desert Storm. These ships were fully crewed and ready to serve because they were operating in regular commercial service in the foreign waterborne commerce. These companies and mariners were ready when our Nation called, and they honored their contractual commitments to the Federal Government. The United States was not treated the same way by the foreign shipping community. We had foreign ships refuse to enter the war zone and saw foreign crews desert their ships rather than carry cargo to the Persian Gulf. In many instances the promise of double pay was not sufficient to keep these crews recruited and in active service during the Desert Shield/Desert Storm period. When we were able to get the foreign ships under contract, we paid the premium. It is my message to the Senate that we must not repeat the mistakes of the past. The Congress owes an obligation to this Nation to properly sustain our fighting men and women when the U.S. asks them to risk their lives in protecting America's security interests abroad. I do not stand before the Senate today to defend an old and obsolete subsidy program. With my good friend from Hawaii, I know the current system is dysfunctional and in need of a comprehensive overhaul. The task that began in the 1970's and ends today is simple: How do we ensure an adequate U.S.-flag, U.S.-crewed private sector fleet to provide sustained sealift in a cost-effective and logistically efficient manner? This Bill, H.R. 1350, is the answer to that question. There are two cornerstones of this proposed revision of our sustainment strategy: reform of the maritime program itself and inclusion of a new, state-of-the-art commercial fleet into the Emergency Preparedness Program. The first removes the inefficiencies that have crept into the old maritime programs over the last 50 years. The second acts as our Nation's insurance policy on the costs of sealift and provides the link between those water-borne assets and the Department of Defense mobility structure. When I served as chairman of the Senate Merchant Marine Subcommittee in the 1980's, the existing operating differential subsidy--the ODS program--was costing the Federal Government well over $350 million per year. U.S. companies were receiving differential payments for crew costs, insurance, vessel maintenance, and other associated ship costs. The per ship costs ranged between $4 and $5 million annually. We had no effective fiscal controls over this program because ODS was a contract entitlement. Today, the administration has the authority to enter into new subsidy contracts without the approval of the Congress or any prior appropriation of funds. We first started the discussion about substitution for the system of contract entitlement with a system of annual appropriations in 1986. This bill, H.R. 1350, would finally accomplish this objective, which is what the Senator from Hawaii and I started out to achieve. This bill would authorize only $100 million annually for the new sustainment sealift program, $250 million less than the funded levels in the 1980's and $150 million less than the costs of the existing program as it stands today. We are proposing a firm fixed price system rather than a differential cost program. Participating companies are to receive roughly $2 million per ship per year, half the amount these companies receive under the current entitlement program. U.S. companies will be forced to continue their improvements in productivity, capital and labor cost reductions, and intermodal transportation capability in order to remain competitive in the foreign water-borne commerce. In order to assist them in this goal, this bill would eliminate unnecessary trade route regulation and allow them to better adjust to the changing trends in international cargo movements. We would also be procuring participation in the Emergency Preparedness Program. There has been surprisingly little discussion about one of the more important features of the proposed reform effort in this bill. A major requirement of the new Maritime Security Program is enrollment in the Emergency Preparedness Program. This program is currently being tested as a pilot called the Voluntary Intermodal Sealift Agreement, or the VISA program. The United States Transportation Company, in consultation with the Maritime Administration, developed VISA in response to lessons learned in the Persian Gulf war. The objective of VISA is to tie U.S. carrier sustainment commercial sealift and their worldwide intermodal transportation and management networks into the DOD sealift program. Mr. President, worldwide water-borne transportation is no longer just a port-to-port movement of goods. It now involves multibillion-dollar intermodal transportation networks, including ships, the rail industry, the trucking industry, and aviation links. The industry's capital base includes sophisticated marine terminal and port facilities, worldwide computerization of cargo movements, and new age management systems. The VISA program accesses this multibillion-dollar shipping network. The objective of VISA is to promote and facilitate Department of Defense use of these existing systems. It would literally break the bank if Congress were forced to replicate, operate, and maintain a similar system. The Government costs for such a transportation system ranges from $800 million per year and up, we are told, and we simply cannot afford those costs in this time of budget control. An essential feature of the Maritime Security Program envisioned by this bill, H.R. 1350, is advance rate-setting through the Emergency Preparedness Program. As a precondition for a fixed price MSP contract, the participating company must agree to rates established in advance for the chartering of its ships to DOD in the event of a call-up. The MSP contract price paid to the carriers is, in its essential form, an insurance premium being paid for access to the multibillion dollar intermodal transportation network. This is clearly, in my judgment, the most cost-effective method yet proposed to allow for DOD access to sophisticated sustainment capability. Finally, the Emergency Preparedness Program will also require periodic training exercises with the commercial fleet. The United States Transportation Command is already conducting training exercises with select carriers on a voluntary basis as part of the VISA pilot program. As part of the Maritime Security Program, training exercises through simulated call-ups will become an integral part of the Department of Defense's Sealift Readiness Program. We will begin to exercise our sustained commercial sealift muscles on a regular basis. The next time an international incident, such as the Persian Gulf, arises, God forbid, the United States should be and will be ready under this bill. As we debate this bill today, I ask my colleagues in the Senate to look at the large picture now and avoid getting caught up in issues and subissues that are being raised as reasons to block the passage of the House bill, H.R. 1350, today. I believe that if we do not act on this bill today, there will be no U.S. flag sustainment fleet in the immediate future. The loss of our private commercial sealift will, in turn, result in huge defense costs and a gaping hole in our national sealift strategy. Mr. President, the Senate has the opportunity to close the book on an issue that has been ongoing for decades and, I believe, may and should act in a manner which strengthens our national security. I commend this bill to the Senate on the basis of the many hours I have spent with my colleague from Hawaii in trying to find a solution to the problems which beset our sealift capability. Mr. INOUYE addressed the Chair.

Mr. STEVENS

Mr. STEVENS. I ask unanimous consent the bill be deemed read for a third time and passed, the motion to reconsider be laid upon the table, and any statements relating to the bill appear at this point in the Record. The bill (H.R. 2982) was deemed read for a third time and passed.

Mr. STEVENS. Mr. President, I ask unanimous consent the Senate proceed to the consideration of Calendar 462, H.R. 2982.

Mr. STEVENS

Mr. STEVENS. I suggest the absence of a quorum.

Mr. STEVENS

Mr. STEVENS. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. STEVENS. I suggest the absence of a quorum.

Mr. STEVENS

Mr. STEVENS. Mr. President, I see that the chairman of the committee is here now, Senator Pressler. I want to add to the comments that I made previously that he and Senator Hollings, the leader and ranking member on our committee, the Commerce Committee, have allowed us broad leeway and literally allowed us, with almost all our funding from the Commerce Committee, to travel in connection with the hearings we conducted on this bill in the period of 2 years. Senator Pressler has contributed very greatly to the outcome of this legislation. I want to acknowledge his leadership as well as his cooperation. Both he and the staff of the full committee have assisted us in every way. I do thank him. And Senator Hollings has done the same for Senator Kerry. So it was with the absolute cooperation of the leadership of the committee that we were able to achieve the passage of this bill. It is another bipartisan bill that goes down on the record of Senator Pressler during his chairmanship of this committee. We look forward to working with him in the years to come. I would also like to add my special thanks to Senator Inouye, who has stood beside us and made a major contribution to this bill.

Mr. STEVENS. Mr. President, I used too much time. Mr. President, I ask unanimous consent for an extra 5 minutes on this bill.

Mr. STEVENS. Let me also thank representatives of the Western Alaska Fisheries Development Association, the Pacific Seafoods Processors Association, the Alaska Groundfish Data Bank, the Alaska Draggers Association, the Petersburg Vessel Owners Association, and the Kodiak Longline Vessel Owners Association. Mr. President, I am sad to report that the two people who urged me in the first instance to support the original act and introduce it in 1971 and then helped us get started once again on the revision that passed in 1976, Oscar Dyson and Harold Sparck, two Alaskans, are now deceased. I do want to recognize their memory in connection with this legislation, which they have also been instrumental in creating. Mr. President, I will not take all the time, but I do once again want to thank my good friend from Massachusetts. Had it not been for his determination and consistency, we would not be where we are today, having passed a significant, bipartisan bill. But beyond that, Mr. President, I want to issue one word of warning as I close. We have passed a bill to try to eliminate waste in the fisheries off our shores. Mr. President, if these mechanisms we have adopted through compromise do not work, I intend to be back with a stronger bill because it is the area off my shores, the shores of Alaska, that produce over half of the fisheries of this country. The waste has become just unacceptable, totally unacceptable. When we reached the level of 500 to 700 million pounds a year of fish being wasted because of the distant water fishing vessels, we have reached a level beyond our acceptance in the fisheries. Mr. President, I introduced the original 200-mile bill in 1971 because I flew from Kodiak to the Pribilof Islands and counted over 100 Japanese trollers off our shores. We sought to find a way to eliminate that scourge on our fisheries, and we did so by passing, finally 5 years later, the bill that is now known as the Magnuson Act, at my request. That law brought into effect a new distant water fleet. It is the factory trollers. And 75 percent of that waste comes from the factory trollers. If they do not put their business back in order and get away from bottom line fisheries and start thinking about the conservation of our fisheries and the sustainability of our fisheries, we will be back because Alaska will not put up with the total depletion of our fisheries. There are no known species off our shores that are overfished now. Several may be very close to it. The day that we get one--even one-- caused by factory trollers, I will be back with another bill, because we demand that the reproductive capability of our fisheries be sustained. That is what this bill does. That is the intent of the bill. If it does not work, Mr. President, thanks to God and my Alaska voters, I will be here 6 more years, and we will see to it that a bill will pass that will eliminate these vessels that are destroying the reproductive capability of the North Pacific. Thank you, Mr. President.

Mr. STEVENS. Mr. President, I again thank the people who were involved in this. As I said, prior to the passage of the bill, this is a bill we have worked out in 18 months. When it was previously before the Senate, it took 5 years. This has required a tremendous amount of staff time. I am particularly indebted to my staff people: Trevor McCabe and Earl Comstock; and to Tom Melius, who has worked with the chairman of the committee, Senator Pressler, and Penny Dalton, who has worked with Senator Kerry and Senator Hollings from on the committee. Let me also thank Jeanne Bumpus with Senator Gorton; Justin LeBlanc with Senator Murray; Margaret Commisky and Scott Atkinson with Senator Inouye; Clark LeBlanc who is with Senator Snowe; Mike Parks and Darla Romfo with Senator Breaux; Glenn Merrill and Alex Elkan, Sea Grant fellows with the Commerce Committee; Peter Hill and Tom Richy on Senator Kerry's staff; Alex Buell on Senator Wyden's staff; Carl Biersak, who has worked with the majority leader, Senator Lott; Carol Dubard with Senator Hutchison; Rick Murphy with Senator Chafee; and Wayne Boyles with Senator Helms. Mr. President, this bill would not have come before us if it had not been for the tremendous support from the Marine Fish Conservation Network. I particularly want to thank Greenpeace and the Alaska Marine Conservation Network for working very actively for the passage of S. 39, as well as the Center for Marine Conservation and the World Wildlife Fund. I ask unanimous consent to have printed in the Record the entire list of the fish network, who have all been helpful.

Mr. STEVENS

Mr. STEVENS. Thank you.

Mr. STEVENS. Reserving the right to object, Mr. President, does the leader's unanimous-consent request apply to the pipeline safety bill?

Mr. STEVENS

Mr. STEVENS. Mr. President, this bill took 5 years, from 1971 to 1976, to pass--the original bill. This one has been worked out in a very short period of time due to the total agreement of everyone concerned. I am thankful for that. I thank my good friend from Massachusetts in particular.

Mr. STEVENS. Mr. President, we have been waiting for one Senator, but we have waited a long time. I do ask unanimous consent now that there be a period after the vote of about, say, 10 minutes for Members who wish to make statements concerning this bill.

Mr. STEVENS. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. STEVENS. Mr. President, I suggest the absence of a quorum.

Mr. STEVENS. Have we disposed of all matters that were covered by the time agreement?

Mr. STEVENS. Mr. President, parliamentary inquiry.