Jones Act Speech

Associated Builders and Contractors Member Appreciation Dinner July 10, 2012

by Linda Lingle (Text as Prepared)

Aloha,

It’s good to be with you tonight.

I want to begin my remarks by thanking you for ABC’s enthusiastic and early endorsement of my candidacy.

It was at the end of last year that you publicly let the people of Hawaii know that you believed I was the best person to represent our state in Washington as Hawaii’s next U.S. Senator.

Your endorsement reflected your opinion that we need a leader, not a follower, to represent us in the nation’s capital.

I want especially to thank Jonathan Young for his help and support.

Beyond our fundamental right as Americans to cast our vote for the candidate of our choice, one of the most important public benefits of a spirited campaign such as this one, is the discussion and debate of issues that affect our lives.

Some issues are straightforward, such as the need for pro-growth economic policies that will put the people of Hawaii and America back to work, while others are more complicated and their solutions less clear. When an issue is clear, I enjoy stating my position and advocating for my point of view, even when not everyone agrees with me.

But when an issue lacks sufficient objective analysis to enable a fully informed decision, and especially when the wrong decision on the issue has the potential to negatively impact American jobs and security, then I want to give it the research, thought and public discussion that it deserves.

I would like to have part of that discussion with you tonight on the Jones Act, a 92-year-old law that my opponent in the Republican Primary as well as one of the Democrat Primary candidates says should be repealed.

They argue that the Jones Act increases Hawaii’s cost of living and that it would be cheaper if foreign built and operated ships could stop to and from Hawaii on their way going and coming back from the Mainland United States.

I think the impact of the Jones Act on Hawaii’s cost of living is a fair place to begin the discussion, but there are other critical aspects to this issue that need to be discussed and understood as well.

When it comes to costs, we also need to analyze whether lower shipping costs would be sustainable over the long term should America’s shipping industry disappear.

Our domestic shipbuilding industry could disappear because of the lower cost of foreign shipbuilding due to lack of environmental protections, poorer working conditions, lower wages, and foreign government subsidies.

So, even were costs to decline in the short-term, what assurances do we have that the foreign ships would keep those costs low when there is no competition from U.S. ships?

As a former Governor, and now once again on the campaign trail speaking with families and small business owners, I am acutely aware of how Hawaii’s high cost of living makes it a struggle for many people and businesses to make ends meet.

That is why I worked hard to reduce business and personal costs by lowering business fees by more than $50 million during my years as governor, and advocated for lower taxes and reduced government regulation of businesses.

But an objective analysis of the Jones Act cannot simply be reduced to an argument about lower shipping costs.

The Jones Act issue goes much deeper than shipping costs and merits a deliberative analysis of such issues as national security and the continued existence of a U.S. commercial shipbuilding industry.

As many of you know, the Jones Act was passed in 1920 to ensure the health of a robust domestic shipbuilding industry and merchant marine.

As the world’s pre-eminent maritime nation with global transportation, resource and defense interests, these two purposes are no less important today than they were in 1920.

In fact, with the intent to fight the war on terror overseas, those interests may be more important today than they were in 1920.

To those who say repealing the Jones Act wouldn’t harm national security, I would ask them to consider these comments from a report written by Dr. Daniel Goure, the former Deputy Director of the International Security Program at the Center for Strategic and International Studies.

Dr. Goure has also served as the Director of the Office of Strategic Competitiveness in the Office of the Secretary of Defense.

Dr. Goure first points out that America is a nation founded from the sea, and that seaborne commerce drove our economy for two centuries. He also points out that our economy is dependent on the sea to carry virtually all of the $3.5 trillion in international trade annually.

It is his specific comments about the interconnectedness of our ship building industry and our national security that give me the most pause when I think about what a repeal of the Jones Act would mean.

Here is a quote from his report, “…the great seafaring nations have built strong maritime industries, merchant marines and navies. The three components of sea power are interrelated.

“A maritime industry is vital to the ability to build ships, including naval vessels. The merchant marine is what carries goods to and from this country in both peace and war.

“A strong navy secures the oceans for U.S. seaborne trade and access but is dependent on the industrial base to produce new vessels and repair existing ones.

“The greatest danger to the role and function of the United States as a seafaring nation is the decline of its maritime industry and merchant marine.”

As Hawaii’s next U.S. Senator, I will be the first to call for a definitive study and report by the General Accounting Office into the pros and cons of the Jones Act as it relates to Hawaii and the Pacific region.

But the Hawaii study, unlike the GAO study that is currently being conducted with respect to Puerto Rico, must consider U.S. national security interests, U.S. military supply lines, maritime security as it relates to the State of Hawaii, shipping costs, the federal Harbor Maintenance Tax and Trust Fund, the effect of foreign competition on the U.S. commercial shipbuilding industry, the effect of foreign competition on the U.S. merchant marine, along with all of the other issues that would be impacted by the repeal of the Jones Act, a law that has well-served our nation’s security interests for over 92 years.

So as of today, I’m unconvinced that repeal of the Jones Act is in the best overall interests of the United States, Hawaii and the Pacific region.

Here’s what President Obama said about the Jones Act when he was first running for President in 2008, “America needs a strong and vibrant U.S.-Flag Merchant Marine.

“That is why you can continue to count on me to support the Jones Act and the continued exclusion of maritime services in international trade agreements.”

President Obama’s position was not a departure from his predecessor.

Here’s what President George W. Bush said about the subject in 2006. “It’s important for a president to embrace the Jones Act. I have for five-and-a-half years as the President, supported the Jones Act, and will continue to do so.”

How about earlier presidents, who members of both political parties often point to with pride?

President Bill Clinton expressed his thoughts in 1997 when he said, “My Administration…continues to support the Jones Act as essential to the maintenance of the nation’s commercial and defense maritime interests.”

And finally, here are President Ronald Reagan’s comments when he was a candidate in 1980: “I can assure you that a Reagan Administration will not support legislation that would jeopardize this long-standing policy…embodied in the Jones Act…or the jobs dependent on it.”

So, we have four presidents from both political parties over the span of more than 30 years expressing identical positions on the importance to America of maintaining the Jones Act.

I think you would agree that we would be hard pressed to find another issue that would generate this kind of consensus.

I want to be clear: I am not opposed to change, especially change that reduces shipping costs and benefits the people of the State of Hawaii.

I am, however, opposed to change that is unsupported by a reasoned analysis, especially of national security impacts.

My record as Governor shows my efforts to bring down shipping costs.

I encouraged and welcomed new interisland shippers into the market in order to provide options for our neighbor islands to move goods between harbors.

I successfully fought efforts by the State of California to impose a container tax on all shipments to Hawaii, and will continue to oppose such punitive actions if I am elected your next U.S. Senator.

And my Administration developed a $600-million modernization plan in cooperation with the private industry Harbor Users Group that gained bipartisan legislative support.

The plan focuses on reconfiguring and improving harbors around the state in order to increase efficiency and keep costs down.

As Hawaii’s next U.S. Senator, I commit to you that while the Jones Act issue is being fully studied, I will explore other ways to reduce the costs of living in the State of Hawaii.

For example, I will work with Alaska Senator Lisa Murkowski to advocate for an exemption for Hawaii and Alaska from the federal shipping tax currently imposed on all maritime transport.

As the two states almost totally dependent on sea-going cargo, I believe a good case can be made for this exemption.

And, I will aggressively work to reduce imports through my initiatives on indigenous energy development and food sustainability.

These are the concrete, definitive ways that your next United States Senator can help address costs in Hawaii while undertaking a thorough review of a law that has served our national interests well for nearly 100 years.

Thank you for your attention tonight and for the official endorsement with which you have honored me.

If I am able to win the election to become Hawaii’s next U.S. Senator, you can be sure that you have elected a leader, not a follower, to represent you in the United States Senate.