January 20, 2015

Hirono: Jones Act repeal would cost Hawaii 23,000 jobs

Sen. Mazie Hirono has joined the growing chorus against Sen. John McCain’s latest attempt to scuttle the Jones Act, arguing repeal would cost Hawaii thousands of jobs and jeopardize its shipping lifeline.

“In a state like ours, which is basically 80 to 90 percent dependent on shipping to bring in all the food and the goods that we need, the Jones Act provides that kind of reliability that we need,” the Democratic member of the Senate Armed Services Committee said in an interview Tuesday in her Capitol Hill office.

McCain, the Arizona Republican who chairs the committee, is pushing an amendment to the Keystone XL pipeline legislation pending in the Senate that would repeal the Merchant Marine Act of 1920, known as the Jones Act, which requires that goods shipped between U.S. ports be carried by vessels built in the country and owned and operated by Americans.

But any potential savings to consumers due to easing the act’s restrictions are “not particularly significant in view of the number of jobs that are dependent on the Jones Act — 23,000 or so in Hawaii and then nationally some 400,000,” Hirono argued, adding the data isn’t strong enough to support McCain’s argument.

“I haven’t seen credible analysis of what the Jones Act costs consumers in terms of increased pricing on goods,” she said.

But a 2014 report by the Congressional Research Service argued the law has increased shipping prices between U.S. ports. Moving crude oil from the Gulf Coast to the northeastern United States on vessels under the Jones Act costs $5 to $6 per barrel, but moving the same oil to the eastern part of Canada would only cost $2, according to CRS.

Hirono said she’s been hearing from shipbuilders and unions that are concerned about the possibility of repealing the Jones Act. Hawaii is working to increase its exports, she said, but right now the state mostly imports goods via U.S. flagged vessels.

“We in Hawaii need reliable shipping,” she said. “Hawaii is not on the normal shipping routes of international shippers, we’re not. And there’s an economic reason that they don’t come to Hawaii. What are they going to leave with? They can bring the goods into Hawaii but what are they going to leave with?”

Read the entire piece at: https://www.politicopro.com/story/transportation/?id=42860

By:  Leigh Munsel
Source: Politico Pro