McCain tries to tack Jones Act repeal onto pipeline bill

JANUARY 15, 2015 — Making the already controversial Keystone Pipeline Bill yet more so, Senator John McCain offered an amendment January 13 that would repeal the Jones Act.

The Senator said: "I have long advocated for a full repeal of The Jones Act, an antiquated law that has for too long hindered free trade, made U.S. industry less competitive and raised prices for American consumers. The amendment I am introducing again today would eliminate this unnecessary, protectionist restriction. According to the Congressional Research Service, it costs $6 per barrel to move crude from the Gulf Coast to the Northeast United States on a Jones Act tanker, while a foreign-flag tanker can take that same crude to a refinery in Canada for $2 per barrel—taking money directly out of the pockets of American consumers. I hope my colleagues will join in this important effort to repeal this archaic legislation to spur job creation and promote free trade."

Needless to say,  McCain's move has stirred up a storm of protest.

"The McCain amendment would gut the nation’s shipbuilding capacity, outsource our U.S. Naval shipbuilding to foreign builders, and cost hundreds of thousands of family-wage jobs across this country," said American Maritime Partnership Chairman Tom Allegretti. "The shipbuilding requirement, which Senator McCain seeks to eliminate, is in place to ensure that the United States maintains the industrial capacity to build its own ships, so as to protect and defend the American homeland. It is hard to believe that the Congress would endorse a change to the law that would outsource U.S. jobs and reduce national security by effectively creating dependence on foreign countries to build our ships."

Here's what the Navy League said:

The Navy League of the United States opposes the McCain Amendment(amendment #2) to S.1, which would gut the U.S. shipbuilding industry by striking the U.S. build requirement provisions of the Jones Act.

The Jones Act requires vessels in domestic waterborne trade to be owned by U.S. citizens, built in the United States and crewed by U.S. mariners. These provisions keep American shipping companies, shipyards, mariners, maritime academies and thousands of people working. It is a critical component to the long-term sustainability of the U.S. fleet and the health of the U.S. shipbuilding industry. The Jones Act aids in controlling shipbuilding costs for the Navy, the Marine Corps and the Coast Guard by ensuring the health of the industrial base.

The Carl Levin and Howard P. "Buck" McKeon National Defense Authorization Act of 2015 demonstrates the national security importance of the Jones Act, stating that "coastwise trades laws [such as the Jones Act] promote a strong domestic trade maritime industry, which supports the national security and economic vitality of the United States."

The loss of the American-built provisions in the Jones Act would have devastating ripple effects on all the sea services. Its immediate impact would be a reduction in the number of ships built in U.S. shipyards, which would result in a loss of jobs, a loss of industrial knowledge and skills, and a loss in America's edge in shipbuilding quality and technology.

This would mean all ships used by our U.S. Navy, Marine Corps and Coast Guard, which of course will be built in the United States, would have a higher cost per ship due to increased overhead costs, and would have a less reliable industrial base. A strong industrial base is necessary for innovation and quality.

This amendment would increase costs for the sea services during a time of sequestration and tightening budgets, when each dollar our sea services spend must go farther. The impacts would be extremely detrimental to the sea services

Maritime unions have also expressed their opposition.

"Senator McCain has chosen to offer his amendment at the last minute to an unrelated bill because he knows that if the issue is debated fairly and openly on its merits, he would not be able to defend his position," said MEBA.

"This amendment has no place in the Keystone bill or in Congress," stated SIU President Michael Sacco. "It is just another attack on the Jones Act, one that could cripple the U.S.-flag maritime industry. We need all hands on deck to defeat this amendment.

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