House Panel Reviews MarAd, FMC Budgets

The U.S. House Committee on Transportation & Infrastructure Coast Guard and Maritime Transportation Subcommittee hearing June 3 involved FY 2027 budget development for the Maritime Administration (MarAd) and the Federal Maritime Commission (FMC).

President Donald Trump’s budget request seeks $2.6 billion for MarAd, $1.4 billion of which depends on a new Maritime Security Trust Fund, still to be established. The FMC would receive $40 million, the same as last year.

Maritime issues usually receive bipartisan support in Congress, and the hearing reflected that shared interest, but also some partisan tensions. Democratic members repeatedly asked MarAd Administrator Stephen Carmel about how Jones Act waivers would lower gas prices. Rep. Salud Carbajal of California said those waivers hurt the nation. Carmel replied that current Jones Act waivers are issued by the Departments of War and Homeland Security, not MarAd. He said MarAd becomes aware of each waiver only when mandatory 10-day voyage reports are filed.

Carmel said the FY 2027 budget keeps MarAd focused on a broad scope of activities to strengthen the U.S. maritime sector and help it work as a system. He noted the Port Infrastructure Development Program (PIDP), a major federal grant program, is being overhauled, as is the Federal Ship Financing Program, which helps to support shipyards.

Rep. Rick Larsen of Washington asked whether MarAd was letting the Small Shipyard Grant Program transition into a funding source for all shipyards, a change he opposed.

In reply, Carmel noted that smaller yards serve more as a repair sector, not construction. He said support for smaller yards also can come from other programs.

Carmel referenced MarAd’s Cable Security Fleet (CSF) program, which maintains specialized vessels for sub-sea cable-laying and repair. He noted that information and services form a significant share of U.S. exports but there are only two U.S.-owned cable repair vessels, so these are often contracted out to foreign services. Carmel also stressed getting ship-to-shore crane production back in the United States.

When asked about the development of the Maritime Security Trust Fund, Carmel said MarAd is working with partner agencies. “We have a significant package of legislative proposals being developed,” he said.

Carmel highlighted MarAd’s recent request for information about developing small modular nuclear reactors for maritime use. A successful reactor program “could be as transformative as containerization,” he said.

Laura DiBella took over as FMC chair in January. Subcommittee members asked her if the $40 million budget was sufficient to take on new issues important to American consumers.

DiBella said the FMC is working to do more with less. She noted that the FMC has administrative law judges on loan from other agencies to help with workloads, and she expects that cooperative work to expand.

Rep. Addison McDowell of North Carolina asked DeBella about the FMC’s review of allegations that Spain has disallowed port entry to U.S. ships possibly carrying arms to the Middle East. He said, “Spain is in NATO. We are supposed to defend them if attacked. What’s going on?”

DiBella said FMC’s inquiry into Spain’s decisions is ongoing. McDowell followed up, asking if Spain replied to the request for information. DiBella said it had, but she could not provide details because the inquiry is still open.

DiBella said the FMC is investing in new technologies and tools to maximize staff productivity and efficiency. These updates “will be a force multiplier,” she said. Another internal initiative is a preventative approach to resolve disputes before they reach a level requiring an administrative law judge.

Rep. Jimmy Patronis of Florida asked Carmel about maritime prosperity zones. These zones are designated by the Department of Commerce to support scaled-up systems and resources for related industries, training, transportation and services, Carmel said.

Patronis asked about challenges with restoring American maritime dominance. Carmel and DiBella had a common answer: cargo, getting more cargo on U.S.-flagged ships, and not government cargo. “We need a coordinated, coherent (system) within a clearer regulatory and tax structure,” Carmel said.

At adjournment, the chairman, Rep. Mike Ezell (R-Miss.) did not indicate any next steps or follow up.