Republicans point to oil spill in push for Jones Act repeal
HONOLULU—As the BP oil spill continues to cloud the Gulf of Mexico, Republican lawmakers are leading another charge to urge Congress to repeal the Jones Act—a bill established in 1920 that regulates U.S. commerce in maritime waters and between ports and requires that carriers maintain a fleet that is U.S.-built and crewed with U.S. citizens.
Earlier this month, Congressman Charles Djou (R, HI) supported state lawmakers along the Gulf Coast in introducing legislation to quickly waive the Jones Act to allow foreign vessels to assist in the cleanup efforts. Djou also joined Texas and Florida Congressmembers John Culberson (R, TX), Ginny Brown-Waite (R, FL), Thomas Rooney (R, FL), and Ron Paul (R, TX) in sending a letter to President Barack Obama urging him to use his executive authority to waive the Jones Act. In the letter, the lawmakers say that current waiver procedures are inhibiting foreign resources from assisting in the spill and creating unnecessary bureaucratic delays.
“The situation in the Gulf of Mexico is unacceptable,” Djou said in a statment. “My colleagues and I agree with the President that no resource can be spared in the relief and recovery efforts. ... The Jones Act has been waived before in times of crisis and should be again. Doing so would send a clear message that we welcome any and all assistance in dealing with the largest environmental disaster in our nation’s history.”
U.S. Senator John McCain (R, AZ) wants to take it a step further—repeal the Jones Act altogether. McCain said the Jones Act hinders free trade and favors labor unions over consumers. The former presidential candidate said requiring that goods be shipped between U.S. ports on American vessels raises shipping costs, makes U.S. farmers less competitive, and increases costs for American consumers.
“Some senators have put forward legislation to waive the Jones Act during emergency situations, and I am proud to co-sponsor this legislation,” McCain said. “However, the best course of action is to permanently repeal the Jones Act in order to boost the economy, saving consumers hundreds of millions of dollars.”
A spokesperson for Djou told The Hawaii Independent that the Hawaii Congressman supports McCain’s effort to repeal the Jones Act entirely.
Democrats, however, don’t see a connection between the Gulf spill and a need to repeal the Jones Act.
In a letter to the Washington Post, Rep. Linda Sanchez (D, CA) said the Jones Act is necessary to prevent the U.S. economy from being dominated by foreign shipping interests and that a privately owned, U.S.-flagged fleet is vital to the country’s economic, military, and international political security. “[McCain] seemingly was motivated by accusations that the Obama administration was slow to accept assistance from foreign countries offering to help with the gulf oil spill cleanup,” Sanchez wrote. “There is no evidence that the Jones Act has interfered with the cleanup.”
Earlier this month, Rep. Mazie Hirono (D, HI) said that the Jones Act is not an impediment to foreign aid in the oil spill cleanup and that there are already 15 foreign-flagged vessels supporting the effort to clean up the largest oil spill in U.S. history. Hirono also said that according to information provided by National Incident Commander Admiral Thad Allen, no Jones Act waivers had been granted because none of these vessels require such a waiver to conduct emergency operations in the Gulf of Mexico; that such a waiver be deemed necessary, an expedited process is already in place.
Waivers related to the BP oil spill response are routed through the Federal On-Scene Coordinator, who forwards requests immediately through the National Incident Commander for expedited clearance.
A Jones Act waiver can be submitted by any interested party, either inside or outside the U.S. government.
Regardless of whether the Jones Act had an actual affect on the response to the BP oil spill, Republicans are adamant in unrestricting the maritime trade in the name of lightening the burden on the American consumer.
“The Jones Act also adds a real, direct cost to consumers—particularly consumers in Hawaii and Alaska,” McCain said. “A 1988 GAO report found that the Jones Act was costing Alaskan families between $1,921 and $4,821 annually for increased prices paid on goods shipped from the mainland. In 1997, a Hawaii government official asserted that ‘Hawaii residents pay an additional $1 billion per year in higher prices because of the Jones Act. This amounts to approximately $3,000 for every household in Hawaii.’”
Lawrence Boyd, Jr., a labor economist for the University of Hawaii’s Center for Labor Education and Research, questions those numbers in his essay “The Jones Act: What does it cost Hawaii?”
The amount Hawaii residents pay per household often cited by Jones Act opponents, in particular, is closer to $596 rather than $3,000, Boyd wrote, due to an incorrect use of the State’s Input-Output Economic Model. If the Jones Act were repealed, Boyd calculated that Hawaii would lose between $37.50 to $1,124 per household due to a decline in the ocean shipping industry.
The Jones Act was also a key issue in this year’s special elections to fill former-Rep. Neil Abercrombie’s House seat. Both Djou and Democratic candidate Ed Case opposed the Jones Act. Case once referred to the Jones Act as a “modern-day incarnation of the worst of the Big Five.” Hawaii State Senate President Colleen Hanabusa, the other Democratic candidate, supported the Jones Act—she argued the regulations sustained the domestic shipping industry.
President Obama had previously acknowledged that he would support a waiver of the Jones Act if the situation was deemed necessary. So far, according to the National Incident Commander Admiral, that time has not come.