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Senate Votes to Revamp Merchant Marine Payment

September 25, 1996|From Associated Press

WASHINGTON — The Senate voted Tuesday to end a 6-decade-old system of subsidies for the merchant marine fleet, replacing it with direct payments to owners who agree to make their ships available during wartime.

The measure, passed 88 to 10, overhauls the 1936 Merchant Marine Act that subsidizes ship owners for the difference between the costs of U.S. crews and registrations and the costs of sailing under a foreign flag.

The legislation passed the House in December and now goes to President Clinton, who is expected to sign it. It pays vessel owners who agree to make their ships available to the Defense Department during national emergencies $2.3 million per vessel in fiscal 1996 and $2.1 million per vessel for each subsequent year through fiscal 2005.

The program, authorized at $100 million a year, would cover about 50 ships. Sponsors said that was half the amount spent on subsidies.

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