On behalf of the International Brotherhood of Boilermakers thank you for
the invitation to appear before the Merchant Marine Panel on Tuesday
July 23, 2002 to discuss shipbuilding and the Maritime Security
Program. Unfortunately, I am not able to attend the hearing due to a
prior commitment outside of Washington D.C.

In an effort to make sure that shipbuilding labor's views are incorporated
in the hearing's record, I ask you to include the enclosed letter at the
hearing for the record. The letter was sent to your office on June 26th of
this year and was signed by representatives of the shipbuilding unions.
Once again, thank you for the opportunity to present shipbuilding labor's
views for reauthorization of the Maritime Security Program.

Prop SAVE SHIPBUDDING JOBS To Sharinon Beren

Date 6/29/02 Time 7.50 30 AM

Page 2 of 3

* INTERNATIONAL ASSOCIATION OF MACHINISTS
* INTERNATIONAL BROTHERHOOD OF BOILERMAKERS, IRON SHIPBUILDERS,

BLACKSMITHS, FORGERS & HELPERS
INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS

*SHEETMETAL WORKERS' INTERNATIONAL ASSOCIATION
*UNITED ASSOCIATION OF JOURNEYMEN AND APPRENTICES OF THE PLUMBING &

PIPE FITTING INDUSTRY OF THE U.S. & CANADA

UNITED STEEL WORKERS OF AMERICA

2722 Merrilee Drive, Suite 360, Fairfax, VA 22031 - (703) 560-1493Phune - (703) 560-2584 Fax

June 26, 2002

The Honorable Duncan L. Hunter
U.S. House of Representatives
2265 Rayburn House Office Building
Washington, DC 20515

Dear Chairman Hunter:

On behalf of the thousands of working men and women employed in shipbuilding we write to ask you to strengthen America's national security to ensure a reserve fleet of commercial, militarily useful ships built, owned, crewed, and operated by Americans – to meet national security requirements m time of war and national cmergency. As debate begins to reauthorize the Maritime Security Program (MSP), an extension of the program as currently structured will not meet our national security requirements for the 21* Century and will not receive our members' support.

To meet America's national security requirements and ensure a commercial fleet of the right size and types of ships needed, the Department of Defense (DOD) should procure commercial, militarily useful ships and lease them to U.S. ship operators in peacetime based on the international bare boat charter rates for comparable commercial vessels. Lease payments to DOD will defray the up-front cost of constructing an American Merchant Marine fleet, and will restore U.S. ownership and control of this fleet to serve as a fifth branch of our Armed Forces in emergency.

If these major reforms are not made to the 1995 Maritime Security Program, the demise of an American Merchant Marine will be inevitable, and U.S. dependency upon foreign shipyards and foreign companies to build and operate a fleet of merchant ships to serve as a DOD reserve fleet will increase. Foreign maritime dependency will increase the risk of terrorist attack, increase the risk of terrorist tampering in construction of the fleet, increase DOD transportation cost in peace time, jeopardize transportation of DOD supplies in time of war, jeopardize the industrial capability of the United States to build warships for the Navy, increase the price of those warships, and eliminate thousands of highly skilled shipbuilding jobs essential to national defense. This is an unacceptable and unaffordable security risk to the United States.

Thank you for your support in restoring U.S. construction and ownership to the U.S. Merchant Marine in the Maritime Security Program reauthorization.

DEPARTMENT OF DEFENSE REQUIREMENTS FOR VESSELS OPERATING UNDER THE MARITIME SECURITY PROGRAM

HOUSE OF REPRESENTATIVES,

COMMITTEE ON ARMED SERVICES,
SPECIAL OVERSIGHT PANEL ON THE MERCHANT MARINE,

Washington, DC, Tuesday, October 8, 2002. The panel met, pursuant to call, at 9:01 a.m., in room 2212, Rayburn House Office Building, Hon. Duncan Hunter (chairman of the panel) presiding.

OPENING STATEMENT OF HON. DUNCAN HUNTER, A REP

RESENTATIVE FROM CALIFORNIA, CHAIRMAN, SPECIAL OVERSIGHT PANEL ON THE MERCHANT MARINE

Mr. HUNTER. The hearing will come to order. My opening remarks will be brief. However, before we address the business before this panel, which is consideration of the military's commercial sealift requirements under a new maritime security program, I would like to extend a warm welcome to our witness today, General John Handy, Commander in Chief, United States Transportation Command (TRANSCOM).

Thank you very much, General Handy, for being with us and spending some valuable time with the panel today. We appreciate you.

General HANDY. Thank you, sir.

Mr. HUNTER. This is the third in a series of hearings being held by the panel that will lead to a reauthorization of a new Maritime Security Program (MSP). At the first hearing, the panel heard from current vessel operators, as well as the so-called section 2 citizens. Frankly, I think many of us learned a great deal at that hearing.

At some point, I am convinced, we will come up with a legislative solution that will address some of the issues raised at the hearing.

At the second hearing, we heard from witnesses representing both large and small shipbuilding interests. Since that hearing, I have started to see some creative financing proposals that offer us a realistic opportunity to have a shipbuilding component in any new MSP reauthorization. My personal view is that we can reach agreement on a shipbuilding component without jeopardizing the operational component of the new bill.

After hearing from General Handy today on the Department of Defense (DOD), MSP sealift requirements, I will ask the Department of Transportation (DOT) and the Maritime Administration (MARAD) to appear before us and present their proposal for a reauthorization of MSP. Just as important as their appearance and