Counterplans Inuit Consult cp



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Title XI CP

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Text: The United States federal government should increase Title XI loan guarantee funding.




Counterplan solves shipbuilding – Title XI loan guarantees would stimulate the shipbuilding industry


Goure, 11 [Lexington Institute, Obama Could Create Jobs And Support Defense, Daniel, PhD, http://www.lexingtoninstitute.org/obama-could-create-jobs-and-support-defense?a=1&c=1171]

Since the President probably is still working on the big economic proposal to be unveiled in September, I would like to offer him a few thoughts. Over the past two and a half years the administration has put forward one spending initiative after another. It is difficult to remember them all or to distinguish one idea from the other. How many times can the White House advocate for more spending on infrastructure before the idea, however plausible, loses credibility with Congress and the American people? President Obama could take a leaf from President Roosevelt’s playbook during the last great economic downturn. During the Great Depression the federal government spent funds from stimulus programs such as the Works Project Administration (WPA) to support expansion of shipyard capacity and even to build warships. Pre-war shipbuilding made a significant contribution to positioning the United States to become the Arsenal of Democracy. It also helped win the battle of Midway; the aircraft carrier Yorktown was built with Roosevelt-era stimulus funds. The administration likes to tout its stimulus plan as having halted the economic downturn and prevented even more job losses. I would suggest that continuing high levels of defense spending probably had a lot to do with this. In fact, on a dollar-for-dollar basis, defense spending probably had a greater positive impact on the economy than infrastructure spending because the money generally went for high value products and services. President Obama would be wise to consider opportunities to invest in the defense sector as a way of both stimulating the economy and supporting national security. Let me provide just one example. Both China and Russia have just demonstrated their first entrant in the competition for a fifth-generation fighter, something the U.S. already has in the F-22. The fact that the Russians and Chinese have entered the competition earlier than anticipated is a cause for alarm since the U.S. halted the F-22 program at only 187 aircraft. Mr. President, how about providing the funds to restart the F-22 line and build another 50 or 60 aircraft? That is a lot of high-tech jobs and a significant improvement to national security. A less well recognized candidate for increased government investment that would create jobs, improve infrastructure, remove impediments to economic growth and help national security is the domestic shipbuilding industry. Simply put, the United States has always supported a domestic shipbuilding industry and merchant marine on national security grounds. The centerpiece of this policy is the Jones Act, passed in 1920, which requires that vessels engaged in trade between two U.S. ports be American-built, owned and crewed. This is important for national security because the Navy both acquires its support vessels — tankers and supply ships — from U.S. shipyards and uses that same industrial base for overhaul and maintenance for its surface combatants. This industrial base could not be sustained on Navy funding alone, hence the need to support commercial activities such as the construction of Jones Act ships. The first thing that the President could do is provide continued funding for the Title XI Federal Ship Financing Program. Title XI provides loan guarantees on contracts to build or overhaul commercial vessels in U.S. shipyards. The guarantees can be employed to cover the production of any type of commercial vessel including barges and offshore oil rigs. Title XI encourages the maintenance of commercial facilities and a skilled workforce that can also be employed in constructing and maintain Navy vessels. An even bigger boost to the nation’s economy and national security would result from an administration decision to expand implementation of the Marine Highway Initiative. The MHI is intended to accelerate development of waterborne shipping services thereby reducing congestion on land as well as saving money since waterways shipping is extremely cost effective for the movement of high volume and bulk freight. Because of the Jones Act, initiatives under the MHI that involve funding support for the construction of carrier vessels would go to U.S. shipyards. The results would be a double boost to the economy (ship construction and reduced freight costs), the creation of jobs and support for national security. Mr. President, put more money behind the MHI.

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The counterplan solves shipbuilding – lowers startup costs and ensures long term financial sustainability


U.S. Department of Transportation Maritime Administration 11 (“America’s Marine Highway Report to Congress” April 2011 http://www.marad.dot.gov/documents/MARAD_AMH_Report_to_Congress.pdf)

The Title XI Federal Ship Financing Program, administered by MARAD, enables owners of eligible vessels and shipyards to obtain long-term capital financing with attractive terms by providing a full faith and credit guarantee of eligible debt obligations. When credit markets are constrained, this program has been particularly helpful to obtain long-term financing for vessels. Stakeholders have suggested modifications to the Title XI program to help introduce more environmentally sustainable vessels into the U.S. fleet and stimulate growth in U.S. shipyard jobs. Potential changes to the program could prioritize Marine Highway vessels, allow Title XI to be used for directly-related shoreside facility improvements, revise debt/equity and working capital requirements (responding to the needs of startup operators), and include a mandate to conform to high environmental standards. Any such changes, however, would need to be made in a manner that would not jeopardize the financial integrity of the Title IX program. Direct beneficiaries of Title XI loan guarantees would be vessel owners and operators and, potentially, shoreside infrastructure owners.

Counterplan solves ship building


Cook, 12 [H. Clayton Cook, Esq. has been involved with Jones Act issues for more than 40 years and served as General Counsel of the Maritime Administration from 1970-1973. He is currently Counsel to Seward & Kissel LLP in Washington, DC., “The Dual-Use Vessel Program and Americas Marine Highway Next Steps”, [ http://www.maritime-executive.com/article/the-dual-use-vessel-program-and-america-s-marine-highway-next-steps ] ,//hss-RJ)

A MarAd and Department of Transportation (DOT) “short sea shipping" program was announced by Maritime Administrator William Schubert in 2002 and discussed at length in his FY 2003 authorization testimony. The program was rechristened "America's Marine Highways" by Maritime Administrator Sean Connaughton. Congress addressed these short sea shipping issues in the Energy Independence and Security Act of 2007, which contained provisions establishing a formal marine highway program within the federal government and charged DOT with responsibility for implementation and administration. DOT received a broad grant of authority for federal action and for federal and local government collaboration in order to attract public and private sector projects to access the nation’s “ocean highways,” including the authority for European-style Marco Polo and Motorways of the Sea programs. The merits of these initiatives to “move traffic from our highways to our waterways” were obvious. The House version of the 2007 Act addressed the need for U.S. government-assisted financing for the required vessels by extending the CCF tax-deferral program to ro/ro and container services nationwide and authorizing $2 billion for short sea transportation use from the Title XI loan guarantee program. As the 2007 Act was enacted, it included the CCF program extension but not the $2 billion authorization for Title XI financing. Furthermore, it did not remove the 1986 Treasury initiatives that had been designed to curtail CCF program use and diminish its value. No initial funding was provided for implementation of the 2007 Act’s grants of authority, and only limited funding has since been available. However, MarAd moved ahead in designating Marine Corridors and Connectors and providing Marine Highway Grants and entering into Marine Highway Cooperative Agreements. Most importantly, as funds have become available MarAd has worked with the Navy to coordinate AMH and DUV program objectives. Prescription for Progress The principal issues of shipyard construction are apparently agreed on the basis of the 2007 and 2008 Workshop recommendations and the Design Report assumptions. The potential for Title XI and CCF programs to reduce fully financed costs is apparently agreed as tabled during the 2008 Workshop, subject to the removal of the 1986 tax barriers to CCF program use. With the Design Report in hand and two additional corridor studies due in May, MarAd and the Navy appear well on their way to achieving the Navy’s 2005 Senior Executive Sealift Forum objective of learning “what it will require to induce U.S. shippers and ship operators to move cargo and operate U.S.-flag ships, respectively, that will have military utility and be available for military use during a major contingency.” The next step will be to obtain Office of Management and Budget approval for a series of legislative initiatives to include the following: 1. Repeal of the Harbor Maintenance Tax as applied to AMH services; 2. Repeal of the Treasury’s 1986 CCF limitations enactments (returning that program to the form in which it was originally enacted); 3. Modification of the tonnage tax to allow its application on a strictly days-in-service foreign vs. domestic basis (returning the tonnage tax to the form in which it was originally drafted); 4. Authorization of a multiyear federal financing guarantee program that was a part of the House-passed version of the 2007 Act, backed by some form of multiyear appropriations funding; and 5. Authorization for a specific European-style Marco Polo program to mitigate start-up risks. With industry support, congressional approval of such legislation appears achievable. And with these changes made it may be possible to initiate one or more AMH services with relatively modest forms of government start-up assistance.



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