
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SUNDAY, September 10, 1995                   TAG: 9509090007
SECTION: EDITORIAL                    PAGE: G-2   EDITION: METRO 
SOURCE: 
DATELINE:                                 LENGTH: Medium

TAXPAYERS

IN THESE parts, people are more aware of farm subsidies than maritime subsidies. But the latter no less than the former costs taxpayers a vessel of dough - and can no longer be justified.

Granted, the U.S. maritime industry has hit troubled waters, the result of intense foreign competition, rising labor costs and other factors. But it's being hurt, not helped, by Washington policies that make it dependent on taxpayers' bailout.

Cargo-preference laws, for instance, require certain federal agencies to transport 50 to 100 percent of their overseas shipments on U.S.-flag ships, giving the companies that own the ships a monopoly on the business. Several decades ago, that may have made sense. The U.S. fleet was 2,000 ships strong, and competition could be counted on to keep prices down. Today, with a fleet of less than 200, this only serves to drive up costs for taxpayers.

The General Accounting Office figures that mandates for agencies to use U.S.-flag ships will cost taxpayers $600 million more in shipping costs in 1996 than would otherwise be necessary. And because such laws affect relatively few mariners, it works out to about $100,000 in subsidies per seafaring job.

More direct subsidies are cash payments going to a few shipping companies to ensure a quota of their ships flying the U.S. flag in case of a national emergency. These payments, about $3.5 million per ship per year, mean simply that exorbitant American crew costs - about four times, on average, the costs of European crews - are passed on to taxpayers. Thus, there's no incentive for the companies to negotiate lower labor costs with the mariners' union, and the industry's noncompetitiveness is perpetuated.

Washington politicians argue that such subsidies are in the interest of national security, assuming a U.S.-flag fleet may be needed in a war. But during the Gulf War, only a handful of the hundreds of ships used to deliver supplies to the war front were U.S.-flag ships.

The maritime industry, management and unions, makes big political contributions. These help win politicians' favor, but should make taxpayers seasick. What's needed is a sea change in congressional priorities.

by CNB