Tax On Bonuses Received From Certain TARP Receipients - Continued

Floor Speech

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Mr. SPECTER. Madam President, I have sought recognition to discuss an amendment I intend to offer.

The U.S. shipyards play an important role in supporting our Nation's maritime presence by building and repairing our domestic fleet. The industry has a significant impact on our national economy by adding billions of dollars to our annual output. The commercial shipbuilding and ship repair industry is a pillar of the American steelworker labor force, employing nearly 40,000 skilled workers.

In the year 2000, the Philadelphia shipyard was rebuilt on the site of the U.S. Navy shipyard. The Philadelphia Naval Shipyard was a historical institution in Philadelphia, employed upwards of 40,000 during the height of the war. At the time of its closing, it employed about 7,000. We fought the case to retain the Philadelphia Naval Shipyard all the way to the Supreme Court of the United States because the government on the BRAC had concealed information from admirals that the yard ought to be kept open. But the case was too difficult, argued on the grounds that there was an unconstitutional delegation of authority to the base-closing commission. But the Supreme Court would have had to have overturned some 300 decisions to leave the Philadelphia Naval Shipyard intact.

The Aker Philadelphia Shipyard employs some 1,200 highly skilled professional workers. Since 2003, it has built more than 50 percent of the large commercial vessels produced in the United States. Additionally, the shipyard contributes over $230 million annually to the Philadelphia region--$5 to $7 million per month in local purchases, $8.5 million in annual revenues to the city of Philadelphia--and supports over 8,000 jobs throughout the region. Today, the Aker Philadelphia Shipyard is one of only two companies producing large commercial vessels in the United States and is a critical asset to the economic vitality of the mid-Atlantic region of the domestic shipbuilding industry.

Since the economic downturn, shipyards such as the Aker Philadelphia Shipyard do not qualify for loan guarantees under existing programs at the Department of Transportation. Without assistance, shipyards will be forced to begin reducing their highly skilled workforce.

As the economy recovers, so will the need for ships and our domestic shipbuilding capacity. There will also be an additional need for ships, as almost $5 billion worth of double-hull construction and conversion work will need to take place by the year 2015 to meet the double-hull requirement under the Oil Pollution Control Act of 1990.

To address this dire situation facing our domestic shipbuilding industry, I am seeking the establishment of a loan guarantee program where the Secretary of Transportation can issue a loan guarantee for $165 million to qualifying shipyards. Because loan guarantees leverage funding, the program would require only $15 million to leverage the $165 million. The $15 million is offset by reprogramming previously appropriated funds, so there is no additional spending associated with this program. The Federal assistance would be short-term financing, bridge financing, to enable shipyards to remain in operation and meet the future anticipated demand for domestically produced ships.

I ask unanimous consent to have the full text of my statement printed in the Record.

There being no objection, the material was ordered to be printed in the RECORD, as follows:

Mr. SPECTER. Mr. President, I seek recognition to speak on an amendment I am offering to H.R. 1586, which is the legislative vehicle for the FAA Air Transportation Modernization and Safety Improvement Act.'' This amendment would create a loan guarantee program to maintain the domestic manufacturing capacity for shipbuilding.

With the U.S. economy still struggling to recover, manufacturing investments can have an immediate impact. Manufacturers have lost more than two million jobs since the recession began in December of 2007, so there is an opportunity to create a large number of jobs in the industry and to simultaneously revitalize our economy and overall global competitiveness. One area where benefits can immediately be seen is the shipbuilding industry. U.S. shipyards play an important role in supporting our Nation's maritime presence by building and repairing our domestic fleet; and the industry has a significant impact on our national economy by adding billions of dollars to U.S. economic output annually.

These shipbuilding investments are vital to the United States, creating thousands of good-paying jobs across the country. The commercial shipbuilding and ship repair industry is a pillar of the American skilled labor workforce employing nearly 40,000 skilled workers; and the ships produced domestically are an integral part of commerce, international trade, the Navy, Coast Guard, and other military and emergency support. With more than 80 percent of the world's trade carried in whole or part by seaborne transportation, the shipbuilding industry has always had and will continue to have a large industrial base that can support significant job creation and economic growth.

Since the mid 1990s, the industry has been experiencing a period of expansion and renewal. The last expansion was largely market-driven, backed by long-term customer commitments. Those new assets created much more productive and advanced ships than those they replaced. For example, articulated double-hull tank barge units replaced single-hull product tankers in U.S. coastal trades, and new dual propulsion double-hull crude carriers replaced 30+ year-old, steam propulsion single-hull crude carriers. The new crude carriers are larger, faster, more fuel-efficient and have a four-fold increase in efficiency over the vessels they replaced.

During the last expansion, the Department of Transportation's Maritime Administration touted the success of Aker Philadelphia Shipyard as a great achievement for the American shipbuilding industry. In 2000, Aker Philadelphia Shipyard was rebuilt on the site of a closed U.S. Navy shipyard. In a few short years, the shipyard became the country's most modern shipbuilding facility employing 1,200 highly skilled professional workers. Since 2003, it has built more than 50 percent of the large commercial vessels produced in the United States. Additionally, the shipyard contributes over $230 million annually to the Philadelphia region, $5 million to $7 million per month in local purchases, $8.6 million in annual tax revenues to the City of Philadelphia, and supports over 8,000 jobs throughout the region. Today, Aker Philadelphia Shipyard is one of only two companies producing large commercial vessels in the United States and is a critical asset to the economic viability of the mid-Atlantic region and the domestic shipbuilding industry.

Despite these successes, the economic collapse has stalled the shipbuilding industry by delaying planned ship acquisitions, constraining the credit markets, and making large vessel acquisitions impossible to finance. The long-term customer driven commitments that drove the last expansion are not a possibility in this economic climate. As a result, this industry, which is a part of the national security industrial base, supports thousands of highly skilled jobs, and is critical to the industrial fabric of our nation, is struggling to survive.

Since the economic downturn, shipyards such as the Aker Philadelphia Shipyard do not qualify for loan guarantees under existing programs at the Department of Transportation. Without assistance, shipyards will be forced to begin reducing their highly skilled workforce, apprentice programs, and vendor and supplier contracts, at a time when we can least afford additional job losses. If this situation persists and companies like Aker were to cease operations, our nation's ability to construct commercial vessels would be severely limited and the investments we made to build this state-of-the-art facility would be lost.

At the same time, there is a strong and direct correlation between the performance of shipbuilding and the global economy and trade. Shipbuilding activities rise when global trade and the economy grow. Likewise, shipbuilding will be among the first activities to suffer when trade slumps and the economy stutters. This puts shipbuilding at the forefront of one of the world's key and most important economic activities, and a reliable barometer of economic performance.

As the economy recovers, so will the need for ships and our domestic shipbuilding capacity. The Maritime Administration has recognized that construction of vessels for the Nation's marine highway system could result in significant new opportunities for U.S. shipyards. The shipbuilding industry is also developing vessel portfolios that can be leveraged by the government including military vessels to meet the nation's needs in time of national emergency. For example, the Navy's Littoral Combat Ship and Joint High Speed Vessel programs are based on commercially designed and available vessels. There will also be a need for additional ships as almost $5 billion worth of double hull construction and conversion work will need to take place by 2015 to meet the double hull requirement under the Oil Pollution Act of 1990.

To address the dire situation facing the domestic shipbuilding industry, I am seeking the establishment of a loan guarantee program, where the Secretary of Transportation can issue a loan guarantee for $165 million to qualifying shipyards. Because loan guarantees leverage funding, the program would require only $15 million to leverage $165 million. This $15 million is offset by reprogramming previously appropriated funds, so there is no additional spending associated with this program.

The federal assistance would be a short-term financing ``bridge'' to enable shipyards to remain in operation and meet the future anticipated demand for domestically produced ships. I encourage my colleagues to help maintain the commercial shipbuilding capacity of the United States through the inclusion of a loan guarantee program.

Mr. SPECTER. It is my intent to offer this amendment when the time is right. I know the distinguished majority leader is now arranging a schedule of pending amendments for votes. So I will not offer it at this time but will seek to have all of the relevant record and all of the relevant information included in the Record as I have stated.

I yield the floor.

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