Senator Mark Kelly Talks SHIP | SHIPs Act 2.0 Re-Introduced Into Congress | Between Two Sterns

Summary

In a pivotal episode of 'What's Going On with Shipping,' host Sal Magliano interviews Senator Mark Kelly about the reintroduction of the Ships Act 2.0, a comprehensive legislative effort aimed at revitalizing the U.S. maritime industry. Senator Kelly discusses the urgent need for a stronger U.S. flag fleet to enhance national security and economic resilience. He emphasizes how a robust maritime infrastructure is crucial not only for military logistics but also for maintaining competitive commerce against global powers like China. The Ships Act addresses shipbuilding capacity, workforce development, and strategic commercial fleet enhancement, all of which are critical to sustaining America's maritime strength. Plus, the conversation highlights bipartisan efforts and international collaborations essential for executing this maritime renaissance.

Highlights

• Senator Kelly discusses how the Ships Act 2.0 is crucial for boosting national security through a more extensive U.S. flag fleet. 🚢
• There's an urgent need to grow the fleet to counter global powers' dominance, particularly China. 🆚
• Key elements include enhancing shipbuilding capacity and workforce development to ensure America's maritime competitiveness. ⚙️
• The Act also addresses integral issues like infrastructure improvements and international maritime regulation alignment. 🌍
• Bipartisan efforts signify unity in bolstering America's maritime economy and defenses. 🤝

Key Takeaways

• The Ships Act 2.0 aims to revitalize the U.S. maritime industry to boost national security and economic resilience. 🚢
• Senator Kelly highlights the strategic importance of expanding the U.S. flag fleet to compete globally, especially against China. 🌐
• The Act includes provisions for shipbuilding, workforce development, and aligning with international maritime standards. ⚓
• A comprehensive approach involving domestic funding and allied partnerships is essential to shore up U.S. maritime defense. 🤝
• Bipartisan support is crucial to passing this vital legislation, ensuring America's maritime future. 🇺🇸

Overview

Senator Mark Kelly passionately discusses the critical need to revitalize the U.S. maritime sector through the Ships Act 2.0, emphasizing its importance for national and economic security amidst growing global tensions, particularly with China. This sweeping legislative effort focuses on expanding the U.S. flag fleet, enhancing shipbuilding capabilities, and fortifying workforce competence to sustain American maritime prowess.

The Ships Act 2.0, reintroduced in Congress, outlines a comprehensive strategy to strengthen maritime infrastructure. It includes funding mechanisms akin to the highway trust fund, expanding shipbuilding projects, and enhancing naval logistics and commercial shipping frameworks. Senator Kelly envisions a future where American maritime strength is restored, supporting broader economic growth and national defense.

A bipartisan approach underlines the initiative's significance, with collaboration from various international allies poised to benefit from enhanced U.S. maritime operations. The goal is clear: to not only secure America's logistical capabilities in wartime but also to safeguard its economic interest in peacetime through a stronger, more resilient maritime infrastructure.

Chapters

• 00:00 - 00:30: Welcome and Introduction The episode begins with the host, Sal Magliano, introducing the show 'What's Going On with Shipping'. He shares that the episode features an interview with a significant figure, Senator Mark Kelly, in a segment called 'Between Two Sterns'. Senator Kelly, along with Senator Todd Young, has reintroduced the Ships Act to Congress. The host mentions that they have discussed the Ships Act in previous episodes, noting that it did not pass in Congress previously, leading to its reintroduction as Ships Act 2.0.
• 00:30 - 10:00: Overview of SHIPS Act Provisions The chapter provides an overview of the SHIPS Act's 12 major provisions. It includes a planned 15-minute interview with Senator Kelly and a concluding segment featuring a 30-minute detailed discussion with Senators Kelly and Young at the Hudson Institute. The chapter emphasizes the importance of staying informed by subscribing and getting alerts about new updates. It also introduces the SHIPS Act's oversight and national coordination element.
• 10:00 - 24:00: Interview with Senator Mark Kelly In this chapter, the discussion centers around the establishment of a maritime security adviser and a new maritime security board. The roles of the existing maritime transportation system national advisory committee are to be expanded. Oversight for these initiatives will be provided by the Government Accountability Office (GAO) and the Federal Maritime Commission. Additionally, funding will be secured through the creation of a maritime security trust fund, similar to other existing transportation trust funds.
• 24:00 - 65:00: Hudson Institute Discussion The chapter titled 'Hudson Institute Discussion' focuses on the utilization of money from duties, tonnage taxes, and other penalties. It highlights the U.S. trade representative section 301 port fees on Chinese-built and Chinese-owned ships, with the money being directed to a maritime security fund. The chapter also discusses the prevention of the suspension of tonnage taxes for foreign vessels owned by foreign adversaries. Sections three and four of the chapter directly address shipping, particularly the importance of maintaining strategic sealift and U.S. flag capabilities.
• 65:00 - 67:30: Closing Remarks The chapter discusses the coordination between the Department of Transportation and the Department of Defense to align commercial and national security military requirements within the strategic fleet operations. It emphasizes expanding the national freight strategic plan to incorporate sealift strategies and aims to amend laws to combat unfair international shipping practices. Additionally, the strategic commercial fleet initiative is highlighted with a goal to increase the US flag fleet to 250 vessels from the current 80 vessels that are engaged in foreign operations.

Senator Mark Kelly Talks SHIP | SHIPs Act 2.0 Re-Introduced Into Congress | Between Two Sterns Transcription

• 00:00 - 00:30 Welcome to this episode of What's Going On with Shipping. I'm your host, Sal Magliano. We have an interview today with probably the most significant figure we've ever interviewed here at What's Going On with Shipping in our four-year history in a segment we like to call Between Two Sterns. And sitting in the between our two sterns today is going to be Senator Mark Kelly. Senator Mark Kelly along with Senator Todd Young reintroduced into Congress the Ships Act. Now, we've talked about the Ships Act in the past. However, it didn't get out of Congress last time and so it's been reintroduced ships Act 2.0. We're
• 00:30 - 01:00 going to go over the 12 major provisions of the SHIPS Act. Then we're going to do a 15minute interview with Senator Kelly and then at the end of this video I'll have attached a segment that Senator Kelly and Senator Young did over at the Hudson Institute. They were interviewed about a 30inut discussion in detail about the SHIPS Act. If you're new to the channel, hey, take a moment, subscribe to the channel and hit the bell so be alerted about new videos as they come out. So, first, the ships act will have an oversight and national coordination element, including
• 01:00 - 01:30 establishing a maritime security adviser. Really interested in who that's going to be. Uh, and a new maritime security board. It's also going to expand the roles of an existing advisory committee, the maritime transportation system, uh, national advisory committee. And there'll be oversight provided by both the GAO and the federal maritime committee uh, commission. To fund this, they're establishing a maritime security trust fund. Much like the highway trust fund and other transportation trust funds, this one is going to derive its
• 01:30 - 02:00 money from duties, tonnage taxes, and other penalties. So, for example, the US trade representative section 301 port fees on Chinese built and Chinese owned ships. That money will be going into this maritime security fund. And it's also going to prevent the suspension of tonnage taxes for foreign uh vessels by foreign adversaries. Section three and four deals with shipping directly and particularly uh section three seal lift and strategic capabilities. Uh it's going to declare it US policy to maintain a US flag
• 02:00 - 02:30 strategic fleet. That's going to be done in coordination with department of transportation to identify commercial requirements and then department of defense to identify national security military requirements. It's also going to expand the national freight strategic plan to include seal lift and amend laws to counter unfair foreign shipping practices. Fourth, strategic commercial fleet will be launched. This is an effort to grow the US flag fleet to 250 vessels. There's roughly about 80 vessels right now involved in foreign
• 02:30 - 03:00 shipping. In other words, US ships involved in in in international trade uh hauling imports and exports by the US. They want to increase that up to 250 ships. That can be done by reflaging vessels into the US fleet. We've already heard from CMACGM. They're going to refl 20 more vessels into the current 10ship ship fleet they have that is US flagged under APPL. Uh allows in the interim foreign built vessels uh to phase them out uh over the next few years up to
• 03:00 - 03:30 fiscal year 2030. It's going to prioritize a tanker procurement program because we're woefully short of tankers especially for the Department of Defense. It's going to expand cargo preference. Uh rule that 100% of US government cargo must move on US flagged vessels, including imports from China. That's going to expand to 10% within 15 years. And then it creates a ships America office to promote US shipping and consumer awareness. Section five deals with some regulatory issues. So they're going to
• 03:30 - 04:00 streamline the Coast Guard compliance through an alternate compliance program. uh Coast Guard regulations are usually much more stringent than for example IMO and you see that in the next one where it says it's going to form a rulemaking committee to align US Maritime regulations with IMO standards and then it's going to modify the existing 1851 limitation of liability act. You may remember when the dolly hit the bridge in Baltimore the ship claimed limitation of liability to basically defer a lot of expenses. You can't sue more than the
• 04:00 - 04:30 cost of the vessel and cargo. Finally, there's going to be a lot of investment in ship building. Talking about authorizing 250 million annually for domestic ship building projects, not for ship building, but for ship building projects. 100 million a year for small shipyards. It's going to convert Title 11 financing into a revolving loan fund, which I think is key because it's not being uh authorized enough money right now. It's going to modernize the construction and capital construction funds, opening them to more maritime sector areas, including marine
• 04:30 - 05:00 terminals. It's going to streamline environmental reviews and unlock DOE, Department of Energy loan guarantees. And it's going to target and really mandate assessments of Chinese link uh logistics threats like Log Inc, which is a system that tracks cargo. So again, a lot of investment and reform in this new ships act. Section seven looks at defense ship building integration. DoD and Navy to incorporate commercial best practices. One of the problems we've had
• 05:00 - 05:30 is US shipyards, private shipyards have become sole source to the US Navy. There's no competition there. And so when you only have one customer, you've you build to meet that customer's needs. It's also going to enhance the recruitment and retention for the Military Sealift Command, the largest employer of merchant mariners. They employ about 5,000 mariners directly and about 1,200 through contract uh ships. and innovation and infrastructure is going to fund maritime innovation incubators at $50 million a year focusing on R&D. I love to see start
• 05:30 - 06:00 focusing on some of those ship propulsion issues like small modular reactors. I think that's going to be kill uh absolutely critical for us to enhance our ability to really become a major innovator in shipping. And then it strengthens ties in a national ship building research program and then workforce development. This is really a two-fold issue. which deals with both a shore and a float. It's going to make mariners and shipyard workers eligible for public service loan forgiveness and GI Bill benefits. I think that's really
• 06:00 - 06:30 key for merchant mariners, especially that latter. I sailed on board a hospital ship alongside my wife during the Persian Gulf War. She was eligible for GI benefits, everything. I was a merchant mariner in the ploy of the US government and I got nothing. squad, which is I'm not bitter about it, but I'm just saying it it if you want to really encourage people to go into an industry, especially where one out of every five US Navy ships acrewed by merchant mariners, you should treat them better than secondass citizens. Uh goes on here, establishes new recruiting pipelines via DoD schools and transition
• 06:30 - 07:00 programs. They've got to modernize how to get your merchant marine credentials. I've talked about this a lot. and then ex expand support for the Navy Cadet Corps and the international academic exchanges in naval architecture. Uh CC cadetses are a fantastic system. Uh it's kind of like uh boy uh the boys and girl scouts for the Navy. Uh it gets them involved. I want to see even more of that down into high school and community college levels. Let's get this promoted. I think it's a really key thing. Number
• 07:00 - 07:30 10 looks at the Merch Marinemies is specifically modernizing the US Merchant Marine Academy. Uh it needs funding. it it's in decrepit shape. It is not good and this should be a priority. There's already bills in Congress to do this. Uh Senator Duffy, the Secretary of Transportation has put this as a priority. And then boost support and um uh enrollment for the state maritimemies. Six state maritime, Michigan, California, Texas, u Maine, uh Massachusetts, and of course, how can we forget the best of them all, New York.
• 07:30 - 08:00 Uh and so including scholarships, training ship integration, naval exercises. I mean, we should do a lot to encourage the cadets and midshipmen at those schools to get their credentials, get their licenses, and more importantly, be able to keep it up, which goes into the next one here. Digitizes the merchant marine credentiing system, uh revises training stat uh standards, and clarifies renewal. Uh right now, the system is is broke. I can't say it any more than that. It is the 11th of 11 missions for
• 08:00 - 08:30 the US Coast Guard. The merchant marine credentiing is located in the maritime state of West Virginia. I'm not kidding. It's there because of Senator Bird putting it up there a long time ago. Uh we need to update this immensely. And and again, I don't think the Coast Guard should be certifying and and giving credentials to merchant mariners. The Air Force doesn't do it for commercial pilots. The Army doesn't do it for truck drivers. I I I don't know why the the Coast Guard still does this. It should be privatized or under the maritime administration and then authorize an
• 08:30 - 09:00 emergency reactivation of expired merch marine credentials. Yes, I would love to go back out to sea for a month or two every summer on a school training ship, but for me to get my license back up and running would cost a huge amount of money and a massive amount of time to get it going. And then last but not least, 12 tax incentives. Now, I should note that the ships act is a little bit different as it was implemented. All the other provisions are in one act. The tax incentives are in a separate bill. So there's actually two bills going up. Building ships in the America uh ships
• 09:00 - 09:30 in America act. So this establishes a 33% tax credit for building US flag vessels. Most tax incentives are usually about 25%, but this is a 33. Exempts various maritime program payments from gross income. Expands access to tonnage tax regimes and capital gains employees in new maritime prosperity zones. and creates a 25% tax credit for investment in shipyards and repair facilities. I think the tax incentives need to be expanded in my opinion. This is just my opinion uh on it. I think for example,
• 09:30 - 10:00 merch merchant mariners selling on their licenses should be given tax exemption for their federal income tax. I think that we should be seeing more opportunity for lowterest loans from the government. Building a ship is a huge investment because you don't get that ship for three to five years. We need to do more for that. We need to be able to defer the cost on the back end. And more importantly, if you're going to invest and buy a ship, the government should be there to provide some sort of safety net to buy the ship back or take it out of your hands, put into a layup status so
• 10:00 - 10:30 it can be used again another time. But again, that's my own opinion. But this is the way, excuse me, this is the way the ships act is currently laid out. All right. Now, I want to take you over to my interview with Senator Kelly, and then afterwards, we're going to hop into the uh interview that he and Senator Young did over at the Hudson Institute. So, we're joined by Senator Mark Kelly, uh Democrat from the state of Arizona, a former astronaut, uh former Navy sailor,
• 10:30 - 11:00 a graduate of the US Merchant Marine Academy, and sir, thank you for being with us on what we like to call here uh between two sterns. Well, S, thank you for having me on. Sir, as a former sailor, I can't help but notice you were doing a lot of ship talk yesterday and mainly because you and a slew of people were introducing the new ships act, the 2.0 version, yourself, Senator Todd Young, Republican from Indiana, co-authoring that, bringing it up. I was wondering if you could introduce to our viewers here what exactly this new ships act entails and
• 11:00 - 11:30 and why is it important to everybody? Well, S, let me talk about the importance part first. So, you say, "Yeah, I am a sailor. I was a naval aviator in the United States Navy, but I also went to the US Merchant Marine Academy. And between 1982 and 1986, when I was there, there were probably around 500 or so uh US flag ships in international commerce. By the time I was in the first Gulf War in 1991, that number was down to 400. And those ships actually helped us get some of that
• 11:30 - 12:00 combat power over to the Middle East, which we really needed. And today, we do have a military seal lift command. We we did then as well, but the number of US flagships continues to go down. That number in 1991 was 400. Today it's 80. China has 5,500. And I'm sure your viewers understand the problem and that it's unsustainable and we have to do something to fix this. So the Ships for America Act is the legislation that is
• 12:00 - 12:30 needed right now to get this industry back on track. And it's not only about building merchant ships. If we fix the merchant ship problem and we build the ecosystem to make these commercial vessels and that means uh fixing the the the capacity at US shipyards and having the right workforce and then flagging the ships and having the incentives in place then we will also be able to build
• 12:30 - 13:00 more Navy ships. We need the supply chains uh we need the shipyard capacity. So this is a national security issue for us and an e economic security issue as well. Yeah. When you were flying off midway during that first person Gulf War, I was sailing for military sea lift command. I was on comfort and one of the things that got me to swallow the anchor and come ashore was to become a historian to study how we did that. How we did that huge massive logistical movement of the seventh core out of
• 13:00 - 13:30 Europe and and and support six carrier strike groups over there in the Persian Gulf. something that I think uh you you talked about the other day in the at Hudson as a matter of fact with the national and security issues. So I was wondering if you talk a little bit about that the national and the military security issues that we face today. I mean we're dealing with issues for the first time of a potential peer-to-peer conflict or a peer-to-peer competitor out there. We've gotten away with kind of non-contested logistics for a long time. But more importantly, we've seen
• 13:30 - 14:00 with the section 301 report done by the US trade rep starting in the Biden administration and carried over to this one uh the dominance of the Chinese maritime in not just shipping but literally across the board in vertical integration and horizontal integration. Yeah. And on the shipping front, they have the ability to produce about 232 times the tonnage uh when they build ships every year. Every single year they crank out in tonnage 232 times what the United States does. That is just almost
• 14:00 - 14:30 hard to wrap your head around. They're building thousands of ships and we're building 10 or maybe 15. And it is um it's it's it's a huge problem. Now, we are really good at the contested logistics problem at the beginning of a conflict. This is my view on this. we're we're going to be really good in the beginning of a war, whether it's in the Western Pacific or the Middle East or in Europe, of getting the stuff we need there. We we've got that figured out.
• 14:30 - 15:00 The thing that I'm worried about is what happens on day 60 or a year into a conflict. And by the way, if conflicts go for a year, they usually go many years. If they're not over fast, they usually last a long time. and we've got to get stuff uh if the conflict's with China, we got to get it across a 5,000 milei Pacific Ocean. And that's going to be really hard to do when the Chinese have a similar uh kind of combat capability uh in
• 15:00 - 15:30 surfacetosurface missile systems and airto ground missiles and the uh what's called the A2, the anti-access any denial A2AD bubble that they're going to push out into the Pacific Ocean. So, it's going to be a challenge for us to get this stuff over there and then sustain it over a period of time. Uh, and you know, I, as you know, as you mentioned, I come from a background that's not just the Navy. Uh, my family,
• 15:30 - 16:00 by the way, my grandfather served in the merchant marine during World War II in the Atlantic Ocean, my other grandfather in the Navy in the Pacific, you know. So, I've got a sort of a long history uh with this. And this is a problem I've been looking at since the 1980s and I've wanted to figure out a way to solve it. And we can solve it. And this legislation, which is over 300 pages long, has all the components needed to fix the ship building, the flagging and
• 16:00 - 16:30 operating of US vessels and fix the workforce. And it does that by a number of different means. Yeah. I I want to ask you just to maybe explain briefly just a couple of those because I know you're you're short on time, but I got to agree with you 100% as the historian here. You know, what victory was in World War II was long before World War II started with things like the Merchant Marine Act of 1936 and then the Two Ocean Naval Act of 1940 that got ship building going back in our yards and created that infrastructure so that by 43 we saw the the fruits of that really
• 16:30 - 17:00 materialize, you know, on the on the battlefront for it. So, I I I watched your brief little talk you did up at Philly Shipyard the other day on board one of the new state training ships. And I was wondering if you could highlight maybe something here that you think is going to be a really key act uh asset that's going to happen, especially for the constituents in states like yours in Arizona and Indiana, which aren't on the ocean front. They're, you know, the Colorado River is a big river, but not quite oceanfront. Uh, you know, what is it for them that you're really trying to get across that's really important in
• 17:00 - 17:30 this legislation? Well, I mean there there will be places in the country that have shipyards that'll clearly benefit from the jobs perspective, but as we rebuild the the ecosystem to supply parts for commercial ships and then also naval vessels, those parts can come from anywhere in in the country. But it's not just about making jobs. I mean, we need to have the seal lift capacity uh to get things from all over the world here to the United
• 17:30 - 18:00 States. If you remember what happened in 2021 and 2022 uh postcoid or during COVID where supply chains were just cut off because of COVID, we could easily see a similar scenario if China just decides that they want to put you know a big amount of hurt on our economy and just shut down uh the transportation of goods to the United States. They could do that. They have 5,500 ships that are somewhat under their control.
• 18:00 - 18:30 So that is a huge concern of mine. So economic security matters to everybody. Uh and and it should and if we grow this industry, I think it'll help grow our entire economy and create good paying jobs. I can't agree with you more on that. And what I really found really interesting is in that short little talk you gave, you talked about issues, for example, of how the commercial really feeds into the Navy, too. you know, if we fix this ship
• 18:30 - 19:00 building aspect, it actually makes the Navy much more better able to do that. Uh, you were talking about workforce initiatives, too, which I think is really important as an element in there. I was wondering if you could talk a little bit about that. Uh, that that trying to get that workforce because you and I were in, you know, at a time when we had a 600 ship navy. We're looking at, you know, a potential cold war and then we went to a 300 ship navy and sat there and said, "Hey, our commercial shipping could be done by these, you know, open registries." But today we're seeing that's that's a a bit of a problem and it could be a problem in a
• 19:00 - 19:30 scenario going forward. Well, the workforce is is certainly an issue. I was over at the the Atlantic Council uh today. We talked about this and uh and if you go and did a survey of high school students and asked them, "What industries do you want to work in? Give me a list of 10." I can't imagine you're going to find many kids that are going to say, "Hey, I'm interested in working in the US Merchant Marine." It's not something they're aware of. So, we got to get the message out that these are great paying jobs that you can have for a career that are exciting, that are uh
• 19:30 - 20:00 that are worth doing, that's service to your country. So getting the the message out and then having the training programs in place to make sure the folks have the skills to do these jobs whether it's the US Merchant Marine Academy or Piney Point which is the unlicensed seafarers union the the the school for the union or the state maritimemies uh and then also training the workforce that'll work in the shipyards the welders pipe fitters electricians we
• 20:00 - 20:30 need uh the former president of Newport new ship building was a woman named Jennifer Boyin who when we were at the Merchant Marine Academy together. She was in my class. Her name was Jennifer Roman. Uh and she was, you know, at the highest level of leadership there at Newport News. And she used to always tell me one of the biggest challenges she faced in trying to get two, you know, submarines out the door every year, Virginia class subs or get that next aircraft carrier built was having
• 20:30 - 21:00 the workforce to build the ships. Now, they train a lot of their own uh workers. Uh but they also need to and they're trying to pay them more so they can retain them. So, workforce retention. There are some things in the legislation that deals with this tax incentives, you know, that has to do with the workforce. Uh but also money to help these organizations train the workers we need to support this industry.
• 21:00 - 21:30 Uh last question, sir, and and I'll let you go. Uh, do you see this I mean this is the first piece of maritime reform legislation substantial since 1970. So we're talking 55 years since the Merchant Marine Act of 1970. You and I were we little tots at the time running around. Uh do you see this as the end all of that or maybe just the beginning because of the really the awakening that a lot of people have had that's kind of sea blindness has kind of gone away because of issues as you mentioned with the supply chain crisis and how dependent we really are on that
• 21:30 - 22:00 international trade for both our imports but more importantly too for our exports. A lot of goods have got to get out into that international marketplace. Yeah. Well, I mean it could be just the the first step but this is a really very comprehensive piece of legislation. It's a thorough and comprehensive plan. It's 340 pages in total. Touches every part of this industry. So, we are laser focused on the next steps to get this through the committee process in the House and the Senate. Eventually, get it to the floor, have a a a uh collaborative process, Democrats and
• 22:00 - 22:30 Republicans, House and Senate, working together, get it to the president's desk, and then we'll figure out, you know, what what is next and and and what we should do in in this industry. But it would be a big win. I mean, this is a really a significant national security in issue for us, but it's also going to create jobs. It's going to lower costs. Um, and it's also an urgent response to the threat that China poses over the oceans. Um, and I'll tell you what, if
• 22:30 - 23:00 we cannot keep pace with, you know, China ship building and their fleet, it ultimately could drive up costs and it could threaten our national security. Well, I just want to thank you for taking the time to be with us today and especially I want to take you thank you for your leadership as a merchant mariner. It is great to have a merchant mariner in the US Congress. Uh, you know, you you take that seat from Senator McCain and and you know, he's a great advocate for Sea Power in the past and and I got to say I'm just really just full respect for what you're doing
• 23:00 - 23:30 for taking this on you and Senator Young and everybody who was involved. It's not just you two, but it was a big group and most importantly it was bipartisan across the country. I think this is one thing watching hearings on this in in Congress, it it's amazing how both sides, Republican and Democrat, are on focus with this issue and I I really appreciate you taking the time and more importantly being uh a leader in really pushing this home. So, thank you for being with us today, sir. Thank you, S. I I take this uh industry very
• 23:30 - 24:00 seriously. I really care about it. I have my two licenses, my third assistant engineers license and my third mate's license hanging on the wall right over there in my Senate office. I look that says all. We appreciate it, sir. Thank you. Appreciate it. Thank you. Welcome everyone. Uh thank you for joining us today. I'm Mike Roberts. I'm a senior fellow at the Hudson Institute. Uh I want to thank all of you who have supported our work on maritime and defense issues. Uh work relevant to today's discussion can be found under the American Maritime Security
• 24:00 - 24:30 Initiative Policy Center at hudson.org. Before turning to our distinguished guests, I want to take just a minute for background. I spent decades in the maritime industry helping shape the policies that govern US shipping today. And a few years ago, I came to a sobering realization. We got it wrong. We thought we had the right balance. Maintain competition under American laws in our home markets while
• 24:30 - 25:00 embracing wideopen competition in global markets. We put the interests of American consumers above all else, and that meant giving them the cheapest ships and shipping services. We knew that companies with American costs couldn't possibly match prices with companies that scour the globe for the cheapest labor and other costs, and that get massive subsidies from their governments. We didn't care. Security wasn't an issue. The Soviet Union was
• 25:00 - 25:30 defeated and China was still an impoverished country and had just 5% of the ship building market. Fast forward to today, China, our geopolitical rival, now has at least 75% of that market. It delivers three ships to the Chinese Navy for every one ship delivered to the US Navy. More than any other country, China controls the maritime supply chains that feed our economy.
• 25:30 - 26:00 All of this threatens our national security and our economic resilience. Thanks to the leadership of Senators Kelly, Young, and key House members, we now have a smart, comprehensive bill announced just this morning uh that can uh restore American strength in shipping and ship building. And with us today are two leaders who have been driving this e effort. Senator Mark Kelly of Arizona, an astronaut, Navy fighter pilot, and graduate of the US Merchant Marine Academy, and Senator
• 26:00 - 26:30 Todd Young of Indiana, a Naval Academy graduate, Marine Corps veteran, and a key voice on commerce and finance issues. It's an honor to have you here today, and thank you for your service. Moderating today's conversation is my colleague Brian Clark, senior fellow and director at Hudson's Center for Defense Concepts and Technology. Over to you, Brian. Thank you, Mike. Uh, and thank
• 26:30 - 27:00 you, senators, for being here. Uh, it's funny that we've got uh three Navy uh or two Navy Academy graduates, three Navy people, but no uh surface warfare officers here. So, we're going to talk about the surface fleet, but uh thank you very much for being here. Uh so this morning uh we released the uh ships for America act uh back into uh into the mix so that we could look at it as part of the legislative calendar for this year. So how does this fit in with the other activities we've seen on the maritime maritime industry over the last month the executive order that came out from
• 27:00 - 27:30 the white house. Uh there's a reconciliation bill that's now been introduced on the house side. Um how do these fit together and why is it important for us to pursue the ships for America act now? Well let me let me start. Brian, thank you. Michael, thank you for the uh opportunity to come here today. It's great for Todd and I to get out here, especially today, and talk about this legislation. It's really important to our national security. I think when the trade representative identified that we've got this problem, and obviously we've known about this
• 27:30 - 28:00 problem for a long time. It's problem that has existed all the way back to when I was a freshman plebe at the US merchant marine academy and before that know back then we had four or 500 oceangoing merchant ships in US trade that number definitely went down to about 400 when I was in the first Gulf War today it's 80 China has 5,500 and their ship building capacity just dwarfs I mean it's just huge compared to what
• 28:00 - 28:30 we have So, um, our original, uh, House co-sponsor on this legislation was Mike Waltz, who just happened that become the national security adviser, which is rather helpful. Um, so he highlighted this uh, this issue for the president, for the White House, and then the president did some executive actions, which says, hey, there's a problem, and we need to come up with some solutions to try to solve this problem. The executive action
• 28:30 - 29:00 doesn't have a lot of the solutions in it. Um, some of the stuff in the EO came from our bill, but the solution to the problem is actually to get this legislation passed. Senator Go. Um, well, thank you so much to Hudson uh for this opportunity and um, you know, I have to say that Mark Kelly has just done an exceptional job on this. He diagnosed a problem along with Mike Waltz. I came in when when Mike it was
• 29:00 - 29:30 clear Mike Waltz was going to be tapping out for other responsibilities and um the the legislation has evolved uh a bit since that period of time and I think we're we're broadening uh our uh constituency of support and and uh we have we have laborers uh we have industry and the national security community and and uh bipartisan support from different branches of government. It's rare uh that you have an issue uh in which there's such a convergence of
• 29:30 - 30:00 views and it is in part uh because uh the the the difference between our preparedness for a major uh longtime frame conflict and uh that of other adversary countries. as you begin to think about uh conflicts that could last into the many months, even the years, um it's u it required pretty uh pretty disciplined and and focused action. And
• 30:00 - 30:30 so that's what we propose here. Uh it's going to take some time to reconstitute our ability to uh to train the mariners to uh to manufacture the ships and and increase our capacities. But um I think that the president's objectives and our objectives harmonize very closely when it comes to this. Uh I agree with what Mark said. We offer more specific solutions here. And so I would characterize our efforts as as uh complimentary in nature. And then there
• 30:30 - 31:00 are some things that will have to happen outside of the scope of this legislation. On the military front that's happening at the same time. Perhaps we get a bit into to uh that. And then probably on an ongoing basis, we're going to have to optimize our workforce development system so that we have the requisite supply of workers. Yeah. And so let's we'll dig into a few of those topics. So you know, first of all, you had mentioned uh Senator Kelly just where where we stand relative to China. I mean, China's got this ship building industry that dwarfs ours by
• 31:00 - 31:30 hundreds of times in terms of the numbers of ships they they pump out per year. Um, and you know, the US is not probably going to be able to match what China does from an industrial standpoint. Um but why is it important for us to uh get you know a ship building industry going at some scale uh beyond where it is today? Um and uh how would that help address some of the the challenges you might face against China either in competition or conflict? I say one of the things our military is really
• 31:30 - 32:00 good at is contested logistics. Uh and we have the military seal lift command. We've got a transportation command that is phenomenal. Uh you saw this especially during the first Gulf War 1991 getting all that combat power on to the other side of the planet very quickly staging it ready. In that case against Iraq we were not facing a nearpeer adversary. If we were in a conflict with China,
• 32:00 - 32:30 they are a significant threat, especially when you consider we have to go across the 5,000 milei ocean and there if if the conflicts over Taiwan 100 miles off their shore. And we I think we would do well in the first days of any conflict with China. What I worry about is what does the second and third month look like? What does year two look like if if if it's a protracted conflict? and they've got a significant submarine force. Um they've got the ability to project power out hundreds
• 32:30 - 33:00 and hundreds of miles out into the Pacific. And if history is any indicator, a naval conflict, naval air conflict like that, you'd wind up with a lot of that capacity at the bottom of the ocean. And we don't have a lot of reserves to turn to. We've got 80 oceangoing US flag merchant ships. And if you consider what happened to our supply chains just from COVID in 2021
• 33:00 - 33:30 2022 time frame that had a significant impact impact on our economy if conflict with China would be much much worse than that right so we've got to be able to get stuff we got to be able to move stuff around and what I really worry about even beyond just conflict with China is them just deciding you know one day they're not going to support our economy anymore uh just to send message or maybe that becomes the opening of their move to repatriate Taiwan. Right. Right. And
• 33:30 - 34:00 that kind of supply chain warfare, you know, is something we're very vulnerable to, you know, considering the size of the US flag fleet uh compared to uh the ships under Chinese flag or the ships under Chinese control or the Chinese, you know, the ships that are the fleets that are using Chinese built ships, all of which could be leveraged against us. Um and uh so um you know, Senator Young, one of the one of the things that the bill does is create this strategic commercial fleet to try to put more ships under US flag and maximize or
• 34:00 - 34:30 increase, you know, by three times the number of ships that we've got operating under US carriers. Um do you think that'll help to address that? And what are some of the other benefits of of having this much larger US flag fleet that you think that the bill helps to promote? Well, I I do think uh that the uh strategic commercial fleet uh its its uh growth uh for the next decade or so will will help us fill that gap. And that's how I would characterize it. Fill a gap
• 34:30 - 35:00 until we really have the capacity to build on an ongoing basis a lot more of our own ships. Right? We're going to have to work with uh other countries uh and their foreign built built vessels, sign them up, put them on retainer so to speak uh to move our material, our personnel when necessary into harm's way. And uh as compensation for that, the structure is uh of course they'll receive the first right or refusal to move cargo and so their benefits uh to
• 35:00 - 35:30 membership as well. Um and uh so that's that's how we propose to get over that hump. And as with so many you mentioned economic coercion. This is at once it's it's a national security effort, the ships for America act, but it's also designed as was our semiconductor initiative uh that uh Mark was helpful in as well. Um it's designed to take risk out of uh our supply chain. Keep working with friends and allies. That's
• 35:30 - 36:00 part of economic resiliency in economic uh security, but take enough risk out so that we can't be on the receiving end of of coercive activity so we can continue to grow our economy, enjoy our way of life. Um much there's coercion that happens on a daily basis. This is part of of China's model now and much of it goes unseen by the American people. There are many things we don't do and we would otherwise do on account of the threat of being starved of of critical
• 36:00 - 36:30 inputs whether it's ships or critical minerals. Right. That's a that's a really good point and that's something that you know like you mentioned Senator Kelly in peace time you could be even a prelude to conflict or an alternative if you're China and looking to pressure the United States and staying out of a conflict over or confrontation over Taiwan. Um, so Senator Kelly, one of the, you know, Senator Young mentioned the idea of the chips act and how the chips act was sort of designed to promote supply chain resiliency and has a bunch of knock-on effects in terms of promoting other industries that support
• 36:30 - 37:00 the ship the chipm industry. Um, so for ship building, bunch of other ancillary industries are involved as well. So uh, and I think the bill gets at a lot of support to a lot of those other in industries as well. So the you know the the the people that do metal fabrication, the trades people that are involved there, the mariners that operate the ships, all of which are important to our military needs. Um so how do you so do you see that as being an essential dimension of the ships act is this kind of lifting up of the the
• 37:00 - 37:30 support to the the naval? It's like the entire ecosystem. You see this table here has got three legs on it. I think of this legislation as a three-legged stool and it needs every one of those or it's this thing will tip over. Uh, one of those legs is the ship building. You know, having the infrastructure. I was recently up at the Philly Navy Navy shipyard now owned by a South Korean company. Um, they look at this as an opportunity for them to expand. They've
• 37:30 - 38:00 already invested, you know, hundreds, I think about hundred million dollars in that shipyard. They can invest a lot more, build more ships, double actually, I think they said, Joe, correct me if I'm wrong, but capacity up to maybe 10 ships in a year. It's possibility for that, right? For for that shipyard, they do two, I think, right now. Um, to get that ship building capacity, they're going to need some tax credits. There's going to be some infrastructure improvement required, research and development. The other leg is the
• 38:00 - 38:30 shipping itself having US flag once these ships are built that they're US flagged with US crews. So you need incentives to get people to go into the maritime industry to to take on a career where you're going to sea and then the retention of those uh individuals but also the shipping companies are going to need incentives to flag the US ships. Uh Todd talked about that how that cargo preference, right? You know, could work or will once we get the legislation passed and then the final leg of that
• 38:30 - 39:00 stool is the entire workforce. Um you mentioned these uh suppliers. So I I went to uh the Merch Merchant Marine Academy with a woman named Jennifer Boyin. When she was there, she was Jen Roman. She was the president of Newport News Naval Ship Building. uh her biggest issue in cranking out aircraft carriers and submarines is workforce, right? And having the people who can, you know, weld the holes together and install
• 39:00 - 39:30 valves and pumps and all that machinery is is a real problem. Finding the the workforce and then after that it's having all the supply chain available. How many companies in the United States build valves that are certified for navy ships? You just can't go to any old company and and buy a valve that's going to go into a Virginia class submarine. Um so by getting this legislation passed
• 39:30 - 40:00 and building the commercial maritime industry, it has this ancillary benefit of supporting our naval ship building which as you mentioned uh the Chinese I would say our quality is is still better. Yeah. You know certainly in aircraft carriers and submarines but the quantity you know has a qualitative effect all on its own. Right. Right. Absolutely. And um so Senator Young, in the in the reconciliation bill, there's
• 40:00 - 40:30 a lot of money going toward um naval ship building, so investing more more ships, putting money into shipyards, um putting money into uh workforce development on the naval side. Um do you think there'll be opportunities for some of that to maybe benefit the commercial side as well? Because I think there's probably commonalities in the supply chain. There's obviously commonalities in workforce. Um, are there ways to take advantage of this kind of dual track of investment, if you will, between the the ships act and what's going on with
• 40:30 - 41:00 reconciliation? It's not coincidental that we're introducing this legislation at the very time uh that chairman wicker, ranking member uh Reed are are intently focused on rebuilding the United States Navy, right? Uh because uh these are complimementaryary investments. Um they're they're not synonymous, right? Um uh but the way we're thinking about our first step is is first rebuild the commercial ship building capacity as Senator uh as as
• 41:00 - 41:30 chairman uh Wicker and and Senator Reid build the Navy and u and then our workforce training initiatives uh our uh shipyard initiatives uh and all the other facets of this multiaceted legislation can be optimized over time and integrated with DoD's efforts. And so, who's going to do that work, that fine-tuning uh across government walls? Well, I mean, we we also bake that into
• 41:30 - 42:00 this structure uh by establishing a national maritime office in the White House uh because this this initiative uh spans from uh Department of Labor to education uh to DoD to commerce to transportation and and on. So, it's essential that from the beginning we have somebody coming up with strategic plans uh to to review and optimize, but first we have to get started. Right. Right. That makes sense.
• 42:00 - 42:30 So, so Sarah Kelly, the um we talked about workforce a couple of times here. Um and it seems like that's going to be a big challenge. It's already a challenge in the ship building industry that we have now that's focused mostly on naval ship building. Um and it's even a problem in the mariner workforce where if you talk to um maritime seal of command they're short thousands of mariners um and having to they're having to lay up ships because they don't have enough mariners to staff them. Um so how are we got how does the ships act start to promote uh more people going into the
• 42:30 - 43:00 maritime industry as a as a career choice? Um is it just by creating a demand signal or is it there's other incentives? Well, first we've got to uh make people aware that these are great paying careers and it could span an entire career. Uh jobs that in some cases require a four-year education whether at the US Merchant Marine Academy or one of the state schools. Mike Fawsome here in the front row is the head of the Texas A&M Maritime School in Galveastston. We flew in space
• 43:00 - 43:30 together twice and not many people I've flown in space with two times. Mike's one of the few. Um, and we need these schools to be uh, you know, at full capacity. Uh, I I I talked to Mike about this before. You know, attracting students that are willing to take on this career is a little bit of a challenge, but that's because you just need to educate people and tell them that these opportunities are there. And then the facilities have to be in in
• 43:30 - 44:00 good shape. The US Merchant Marine Academy where I went, Kings Kings Point, New York, you know, suffers some rather significant infrastructure problems. We're trying to address that. That's addressed in the bill. And and and the funding for the state schools is addressed in the bill. Making sure they have the training ships they need. There are ships being built right now u from, you know, previous defense bills. Um, but we've got to have these, you know, facilities operating at their full
• 44:00 - 44:30 capacity. And then also for the unlicensed crew members, there are, you know, seafare schools. There's one in Piney Point, Maryland. There's others around the country that they need to have the resources to run really great programs. And then we have to have incentives for people to stay in the industry. And some of that is is in the legislation as well, right? Um so uh one of the um things you had mentioned uh Senator Yang is a role of allies um in uh this effort to try to improve your
• 44:30 - 45:00 ship building. So Hanwa recently invested in the Philly shipyard. Um other foreign companies are looking to make investments in the US there. Obviously some have already uh OEL has a invest obviously owns OEL USA. Marinette Marine um is a subsidiary of thinking Terry. So, how do we see uh our allies being able to contribute to this effort to uh revitalize the US ship building industry? Um, a number of our allies uh South
• 45:00 - 45:30 Koreans in particular, I've had direct direct several direct conversations with them, some with the Japanese. Um, they have capital. They have capital looking for uh opportunities right now. They see opportunities here because of their core competencies in in ship building. And um we have a model from the chips act uh in in and uh in which uh you know this sort of partnership has has uh occurred. So we need to build on on that
• 45:30 - 46:00 success. We need to uh invite in uh after the capital is deployed and uh these shared investments are made, we need to invite in expertise so we can relearn uh certain skill sets, right? Um and then um this is going to be a value proposition not just in terms of the ROI for uh our foreign allies uh and the security benefits of of a closer partnership but also uh the the
• 46:00 - 46:30 technological uh I mean we have uh uh advances we we have things to bring to bear. we have our our tech community uh which uh can bring their expertise, their creativity to some of these processes and and uh activities as well. And and so the the Koreans in particular are excited about that about modernizing uh the own operations as as they locate here. But first, we got to get started,
• 46:30 - 47:00 right? And uh so before I sound too dreamy, uh we we've got to get started. we we've got to pass this legislation. Um but the president uh buys into the vision I just articulated um as much stur and drunk as as we have haph had uh recently as it relates to uh some of our trade partnerships is looking uh to build partnerships uh in some of these areas. This is one of those areas. I think Australia is a good
• 47:00 - 47:30 example. Yeah. Right. Right. So, you mentioned OEL who built the Freedom Class LCS ships. Built 10 of them. One has my wife's name, USS Gabriel Gfords on the back, LCS10. Uh they did a great job with that ship. I mean, there's a lot of controversy about that u that platform, especially from my predecessor, Senator John McCain. Um, but they're the the freedom class especially or the independence
• 47:30 - 48:00 class is uh is doing really well. But then there's the AUS program. Right now we've got uh Australian um naval officers on Virginia class subs, you know, on on patrol learning how to operate a nuclear sub. They've gone through a new power school and then Australia will be at some point here in the future building Virginia class attack ups which is critical to the fight in the Western Pacific. It's one area where we I would say more than
• 48:00 - 48:30 anything else we still maintain a significant overmatch over the Chinese. We got to take advantage of it. We got to expand it. But that's a that's a I think a good example of where this is going with one partner, but that can be true with other allies as well. Right. Right. One of the things if if I could circle back to uh some of our workforce challenges or opportunities and I think there are a lot of opportunities here. It may be a bit inongruous uh for some folks at home thinking United States
• 48:30 - 49:00 from Arizona. A mostly landlock state last time I I checked right zero water. That's right. Yeah. And Indiana, you know, Riverine, we have a little dip of Lake Michigan. So uh that makes us full-fledged maritime in my view, right? Um but but with that said, uh there are massive untapped opportunities to mobilize uh a workforce. A workforce that despite maybe some economic
• 49:00 - 49:30 analysis is not driven primarily by economic considerations. Young people want to do important things. They want to be called on to serve a cause greater than themselves. uh to be part of solving generational and multi-generational challenges. And and here we are. We're creating opportunities uh to to design to manufacture components uh across the country. And no, it doesn't take uh a a degree in naval architecture from a top
• 49:30 - 50:00 20 university. Um you can go to your local community college conceivably and enroll in a program, right? uh to to uh to realize your dreams to be part of of of of the American dream here. So that's we're trying to unlock that. We think about the backhome value proposition for this. It's about economic security. It's about national security, but it's also about becoming a better and more
• 50:00 - 50:30 resilient version of ourselves and giving regular people an opportunity to participate in this project. And I think that's a really good point is the idea that if you invest in the ship building industry that's going to promote the whole supply chain that goes behind them back into multiple tiers that are elsewhere in the country away from the coast. Yeah. I think but also made a a good point. You got to really trust us on this because our states don't really have any, you know, any dog at this in this in this fight here. I had a reporter asked me, "So what's the
• 50:30 - 51:00 connection to Arizona?" And I said, "Nothing." and he said, "No, really, really, there's got to be something like some company or something." It's like, "No, there's some connection." I mean, that that that wasn't our motivating factor. I I wasn't motivated despite maybe some perspectives back home uh to do the Chips and Science Act so I could get a packaging fab in West Lafayette, Indiana. I mean, frankly, that wasn't even on my radar at the time. It was economic security. It was national
• 51:00 - 51:30 security. But there there were benefits to be found, right? And here again, uh we've been led into this this effort in industrial policy by pure motives. And I do think there will be opportunities. You don't know what they are yet. Perhaps it's certain semiconductors that are mostly I say we should grin made in his state, not mine. Uh but uh that will go in there. In my own state, I've already discovered some value propositions. Uh we we have Rolls-Royce.
• 51:30 - 52:00 Uh they make maritime engines. We have Cumins. Yeah. Uh we have uh all sorts of of auto uh manufacturing uh supply chain small businesses that uh are looking at perhaps machining certain parts. So um if if we're smart and I think this White House is looking for spare capacity so that we can meet demand uh then um there's going to be broadly distributed opportunity uh associated with this
• 52:00 - 52:30 effort and um some of the technologies or approaches that our allies bring to bear use the modular ship building uh you know at Italy and can liberty ship model from generations inland and bringing the parts down to the coast and so um I think Austin does some of that today. So that certainly could promote a much broader industrial base for the maritime industry. Um, one of the things that the the bill uses which I thought was really interesting are basically market-based approaches to try to uh promote uh US ship building, promote
• 52:30 - 53:00 carriers to go under US flag. Um, and as opposed to just straight subsidies, it's a competitive bid process and you incentivize people to try to offer the lowest bid possible to get those subsidies. Um, did you was that part of the motivation or part of the idea was you're trying to create like a market-based demand signal. So, this is like a demandbased tool for promoting chip building rather than just pumping a bunch of money into the industry. We've got a $37 trillion debt and running a $2 trillion deficit every year. Uh, and
• 53:00 - 53:30 we've got to we've got to figure out that problem. Um, so it my view it's better to have something that's much better to have something that's fully paid for, paid for by incentives within the industry and a tax structure that'll work. So you don't have to go back to the American taxpayer and say fund this thing, right? You know that that it's integral to the legislation. Yeah, I mean it's a good point. Yeah, because the the subsidies that are provided are funded by the trust fund which is getting money from the fees and duties that are paid by shippers as they use
• 53:30 - 54:00 the US. I think it it helps get the thing, you know, passed too. Eventually, we'll get a score from the GAO on this, but it uh the idea was to have it paid for within the legislation. So, Senator Young, one of the things that uh that's one one of the elements in the bill, which I think is really important, also thinking about Indiana, though, is intramotal transportation and and peer infrastructure and basically all the stuff that gets the material off the ship and into the heartland of the country. Um, does the bill start to try
• 54:00 - 54:30 to address some of that uh trans shshipment or some of that interotal transportation uh infrastructure that I think has been probably lacking investment for a long time. Well, we do um one one way in which we address this is again through the National Maritime Office in in the White House so that uh they they can uh have an in integrated view of of different modes of transportation and and how they can plug into one another and and harmonize. Um
• 54:30 - 55:00 another uh thing we have done I I I think it's much needed uh and and long delayed is is establishment of uh a maritime trust fund. Uh we have this uh in the service transportation area, right? A highway trust fund. It hasn't always been well funded over the years, but um in this case uh we we take existing revenue streams from use of our assets, our ports uh and and other maritime assets, put those into a trust
• 55:00 - 55:30 fund and dedicate them uh towards the funding of various initiatives in this bill. So that too uh is is supportive of the broader intermodal effort and u it's fiscally responsible. Right. Right. Um and so the um so your vision for this is to is to get the the bill uh across the finish line this year and start the um provisioning of uh or the incentivization of of folks to start
• 55:30 - 56:00 putting ships under US flag right away. Um uh some of the things that we've heard uh recently in terms of US shipping vulnerabilities are LNG tankers. Um I guess one thing that that industry is challenged by is a lack of capacity that's not Chinese-built or Chinese controlled. We don't build any here, right? And so um do you think that we'll we'll start to see some kind of immediate benefits in terms of the resiliency of our shipping fleet and our ability to overcome some of the supply chain disruptions China might want to impose? Yeah, I mean that's that's the
• 56:00 - 56:30 ultimate goal. 250 ships oceangoing, you know, US flagged in in 10 years, you know, just for a start. And I I know that's not 5,500 like the Chinese have, but it's a hell of a lot better than 80, right? Uh and that could include LG ships. I know the speaker of the house is rather interested coming from Louisiana and the opportunities that we have there about with a uh LG port that he's interested in having having built. it would be beneficial to our national
• 56:30 - 57:00 security to be able to move move liqufied gas around. Um, so Senator Young, believe it or not, uh, we're making some vessels that they don't move LNG. They're smaller at Corn Island shipyard in Lamar, Indiana on the Ohio River. And Don Fers, if you're watching, he's probably not, but uh but uh there may be an opportunity for him. Years
• 57:00 - 57:30 ago, he mentioned this to me. He said, "You know, I've thought maybe someday." He said, "Maybe I'm dreaming. I've thought about maybe uh building LG vessels right here on the Huh. Is he the CEO of the company?" Yeah. Oh, yeah. Yeah. Don first, his son's a his grandson, a Naval Academy grad, so uh sea power is in his blood, right? But I mean that's just an illustration if if if if you can create this market signal the doers and dreamers start to you know they they start to get organized. Right.
• 57:30 - 58:00 Right. Um and um you know I think what you would probably see I guess one thing is that getting the ability to be reliably able to move uh troops and material also overseas in the event of a confrontation with China. I think that's one thing that you had mentioned at the beginning you know Senator Kelly. Yeah. We're not going to get control of a U Chinese ship even if that ship is coming to and from the United States. Uh but US flagships, United States government has the right to take control in time of war
• 58:00 - 58:30 uh and use those commercial ships for whatever purpose we need for our own national defense. I think um many of us uh have been deluded over the years because of some of the public commentary and and start dreamy thinking about a revolution in military affairs which in some ways has has been real but we've been lulled into thinking that most conflicts would be
• 58:30 - 59:00 short and tidy and I think many of our military planners uh have have perpetuated that few, right? And it's great if we can finish our conflicts like Gulf War One, right? But uh when we start to move into a several months or several year uh long effort, which is uh what modern history shows is quite common, right? Uh are we prepared?
• 59:00 - 59:30 Clearly, we're not. I mean, look at look at Ukraine and our military-industrial base. So shame on us uh if if we don't make the requisite changes now. And I think historically any conflict that lasts more than a year tends to last many years. Uh if they're not short, they tend to be very long. Right. Also think it's important to recognize that the and I know right now we're trying to retool reposition our forces for conflict in the western Pacific.
• 59:30 - 60:00 part of what this is about. It's I mean it's about our economy. It's also about our national security. It's a combination of those two things. But as we you know constantly make changes to our Department of Defense and what what our national strategy is going to be on defense, I also think it's important to recognize that usually the war we plan for is not the one we wind up getting in. Right. So you got to be we got to be aware of that too. We got to be we got to be kind of flexible here. Right.
• 60:00 - 60:30 Okay. Well, I mean, it brings up the point, you know, the Pentagon's moving towards this, you know, idea of a lot of small and a lot of small attraitable uncrrewed systems we're going to use to be able to stop Chinese aggression to attack targets downrange. And those things have to get over there somehow. You know, if we're going to once we use the initial supply that's in the you have to come up with a way to ship the rest of them into theater as the fight continues. It's totally a different topic. But this, you know, idea of drone warfare that we see over land between Russia and Ukraine, you know, it assumes
• 60:30 - 61:00 that you have some control over the electronic warfare environment, not necessarily going to be true, you know, here in the future. This push to go to more unmanned systems, I think it's a little bit premature. It's why I've been a big proponent of ENGAD. I think we need at least one more fighter because when things go to it's the guy in the cockpit that can still get to the target, get the bombs on the target.
• 61:00 - 61:30 It's not really true necessarily for unmanned systems. Right. Right. Now, right. Right. We could talk later about FAXX or the Navy. Yeah, that too. Um I just want to make a point. I I've lost track of time here, but um we've we've we've talked a lot about military power. There's been some reference by both of us to economic coercion and economic security, but just want to underscore the fact uh we are a trading nation. We've been a trading nation uh
• 61:30 - 62:00 and uh therefore emphasize the importance of uh having a navy to defend our our sea lines of trade and and communication for generations going back to the 1790s, right? And it was pretty early in our history uh from War of 1812 to the Barbarie pirates and harassment became clear we need we need a robust merchant marine and United States Navy to defend our way of life to grow our economy etc.
• 62:00 - 62:30 And um we're we're incredibly vulnerable right now if if if we don't bolster that capacity. This is not just about uh god forbid uh military conflict uh a major military and and long-standing military conflict. This is about day-to-day trading and not having to uh ask mother may in order to bring goods here and and
• 62:30 - 63:00 send them there. Right. Well, and um and just as we we close this out, um you know, Senator Kelly, I think the uh if you don't have a strong maritime industry though in wartime, you don't have something to fall back on to build that next uh trunch of ships that are going to replace the ones that you lose in the initial confrontation. Yeah. Like we saw in World War II. So, it seems like there's a you definitely a need to create this industry or to revitalize an industry that we're going to depend on. we've sort of gotten into kind of in the mode of well we only need
• 63:00 - 63:30 the ships we're building right now as opposed to the ones we might build in the future uh once the fight starts. Yeah, we we went through this before right before World War II uh with Liberty ships and we had a program to rapidly you know build ships to uh for for for that conflict. Yeah, I think our geography is kind of a double-edged sword. We have got oceans on both sides which has been great for some you know in uh from one perspective on the other perspective it also makes us vulnerable to getting stuff here if we are facing
• 63:30 - 64:00 adversaries uh that could interfere with shipping lanes and and and and shipping capacity. And then on top of it, if we if we do strengthen this industry, the commercial maritime industry with the workforce and the ship building and the flagging of US ships, it will help our naval ship building without a doubt. I don't look at it, some some people have said, well, it's going to compete. If we have a bigger maritime industry, it can
• 64:00 - 64:30 lift up places like Newport News and Electric Boat and other folks that build naval ships, right? Uh and that's the the ultimate goal here is to make our economy more resilient, you know, to our our major adversaries and to, you know, have uh just the national sec security capacity we need. Right. Absolutely. Well, I think that's a good place to end it. Uh, thank you very much, Senator Mark Kelly from Arizona, Senator Todd from Indiana. Appreciate it.
• 64:30 - 65:00 Well, I hope you enjoyed today's episode. It's a lot. It's a big episode, I know, but I can't thank Senator Kelly enough for giving me the time to come on the show. Uh, he was very gracious. Uh, very nice to come on. Uh, I get blamed a lot for being one political side or another. I've I'll invite Senator Young on also. I am not partisan at all. Senator Kelly, the only merchant mariner in Congress. He's the logical one for me to talk to and so I did. I hope you enjoyed today's episode. If you did, hey, take a moment, subscribe to the
• 65:00 - 65:30 channel, and hit the bell so you be alerted about new videos as they come on. Leave a comment, share it across social media. And if you can support the page, how do you do that? You hit the super thanks button down below or head on over to Patreon and become a monthly yearly subscriber. Until our next episode or our next interview between two sterns. I don't think I'm gonna be able to top Senator Kelly, but I do have some great interviews coming up here shortly. Till next episode, S signing