AAPA Pressing to Exempt Many Port Activities from Federal Sequestration

As the federal government faces sequestration and otherwise looks for ways to reduce spending, the American Association of Port Authorities said it's imperative to focus scarce federal resources in those areas that can have the greatest impact on economic growth, immediate and long-term job creation, national security, and our current and future competitiveness in the global economy.

Sequestration could result in an 8.2 percent cut for programs such as Corps of Engineers' construction and Harbor Maintenance Tax-funded maintenance dredging, the Maritime Administration, the Environmental Protection Agency and the Department of Homeland Security, including Federal Emergency Management Agency grants, according to an OMB report.

AAPA is urging Congress to fully consider the vital importance of federal funding in and around America's seaports, which facilitate trade and commerce, create jobs, help secure our borders, support our military and serve as stewards of valuable coastal environmental resources, it said in response to our query on the impact of potential sequestration of federal spending, which could result in about 8.2 percent cuts in virtually all federal spending, effective Jan. 2, unless Congress reaches a budget compromise (see ITT's Online Archives 12091723 and 12091802).

"Nearly a third of the nation's GDP is derived from international trade, with 99 percent of our overseas trade moving through seaports," said AAPA President Kurt Nagle. "The federal government has a unique Constitutional responsibility to maintain and improve the infrastructure that enables the flow of commerce, and much of that infrastructure in and around seaports has been neglected for too long."

AAPA is concerned that funds collected by the Harbor Maintenance Tax since its creation in 1986 have been increasingly diverted from their intended purpose , said spokesman Aaron Ellis, and "gravely concerned about the recent proposal to eliminate direct funding for the FEMA Port Security Grant program."

"Seaports are integral to our economic recovery, jobs, national security, and federal revenue," Ellis said. "Further limiting effective federal investments in America's seaports would be detrimental to our country."

AAPA is watching sequestration carefully, Ellis said, "and we are quite concerned over what cuts to federal programs could do to limit the ability of seaports to effectively handle trade, maintain freight transportation infrastructure, such as maintenance dredging, and provide adequate federal coverage for port security, such as CBP officers at ports."

"The most obvious concerns are over the day-to-day operational aspects of trade," said Michael Smiszek, an International Compliance Professionals Association member and senior manager-global trade compliance for Varian Semiconductor Equipment. "As we all know, time is money, and every extra hour a shipment is detained has a ripple effect on our manufacturing operations and, ultimately, our customers. ... It will be a devastating blow if this budget crunch significantly derails this process."