Kelly's serious but flawed maritime strategy initiative
Building up the Navy requires a credible budget commitment, not propping up a commercial industry.
In the early stages of his political career, Arizona U.S. Sen. Mark Kelly seemed like a derivative figure. He won election two times borrowing heavily from Kyrsten Sinema’s successful electoral playbook of minimizing a Democratic affiliation and pledging an independent, bipartisan approach to governing. Yet, in Washington, Kelly was a reliable vote for whatever the Democratic policy de jour happened to be.
Kelly, however, is a substantive individual, a combat pilot and an astronaut. Of late, he seems to have started charting his own course as a politician.
One of the causes he is marking as his own is reviving the position of the United States as a seafaring power, both militarily and commercially. He recently issued a bipartisan call-to-action, titled “Congressional Guidance for a National Maritime Strategy”. His co-authors were Democrat Rep. John Garamendi and Republicans Marco Rubio in the Senate and Mike Waltz in the House. Kelly and Waltz co-wrote an opinion piece touting it in the Wall Street Journal.
The short pamphlet is pretty vague and general. But the bottom line is a call for an industrial policy of sorts to prop up the overall maritime sector. There’s little question that the sector has been in sharp decline. The country’s shipbuilding capacity has shrunk precipitously and U.S. ships carry a markedly smaller share of the world’s goods. However, the call for an overall industrial policy conflates two things that should be considered separately: military needs and commercial shipping capabilities.
The pamphlet is heavily grounded in the geopolitical rivalry with China. China now has the world’s largest Navy and dominates the shipbuilding industry generally.
There is a consensus among defense experts that the United States needs a bigger, more capable Navy. But there is less of a consensus on what the role of that Navy should be.
Kelly and his cohorts want the United States to remain the guarantor of free passage for shipping throughout the globe, specifically citing the threats from the Houthis in the Red Sea and Gulf of Aden. The U.S. has been attempting to counteract that threat and we are lucky that it hasn’t resulted in some kind of significant military setback, including serious U.S. casualties. Yet, that passage is far more important economically to Europe than the United States. It’s another example of the United States assuming risks disproportionate to our stakes in the outcome.
Currently, our allies have insufficient capabilities to protect their proportionate interests. Getting them to that point is perhaps the most important strategic imperative for the United States at this time. Not only in Europe, but as importantly in the Indo-Pacific. The United States is assuming a disproportionate burden on containing China. Much more of the burden needs to be assumed by the countries threatened by China’s desire and drive to regional hegemony. That desire and drive is a far greater threat to India, Japan, South Korea, and Australia than the United States.
The appropriate size and configuration of a U.S. Navy is, in significant part, dependent on the extent to which allies step up to assume proportionate responsibilities.
Assuming that a bigger Navy is needed, as is likely even with a resorting of respective responsibilities with allies, the blockage isn’t the lack of an overall maritime industrial policy. It is incontinent fiscal policy and a dysfunctional budget process. There is abundant talk in Washington about the need for a bigger Navy. What there isn’t is a reliable stream of money to make it happen.
If the finances of the federal government were healthy and sustainable, and if there were a broad bipartisan consensus in favor of a range and timetable for an expansion of the naval fleet, the domestic shipbuilding capacity to accommodate it would be created.
With annual deficits of 6% of GDP, double the 3% generally regarded as sustainable, the federal government’s finances are far from healthy. Even if there were a broad bipartisan consensus in favor of a range and timetable for naval expansion, potential investors in additional shipbuilding capacity would have doubts about the follow through.
It’s worth noting that Kelly is complicit in the sorry state of the federal government’s finances, having voted for every budget-busting proposal emanating from the Biden administration.
The authors wouldn’t put it this way, but the pamphlet basically advocates an industrial policy to prop up a commercial industry to compensate for the inability of the federal government to make a credible commitment to military shipbuilding. If there were a robust commercial sector, seems to be the unstated belief, it would be available if the federal government ever got its act together.
There are two elements to the proposed commercial industrial policy worth discussing. The first is preserving and strengthening the Jones Act. The Jones Act requires that goods traveling between U.S. ports be conveyed via vessels owned and operated by Americans and staffed with a majority American crew.
Enacted after World War I, the Jones Act has been widely criticized by economists as an inflationary protectionist measure, increasing shipping costs particularly for Alaska, Hawaii, and Puerto Rico. And it hasn’t arrested the sharp decline in American shipbuilding capacity.
The other element is invoking the Defense Production Act in favor of the domestic, commercial maritime industry. This call was made explicitly in a January letter to the White House, led by Kelly and featuring an even broader array of bipartisan co-signers.
Under the Defense Production Act, the federal government can commandeer private sector resources. Supposedly this power is to be reserved to meet true national defense needs. But the act long ago slipped from those moorings. The Biden administration has already invoked it for baby formula and green energy materials.
The proposal is for the federal government to require that ship-making materials be first sold to shipbuilders, irrespective of whether there are higher bidders or pre-existing contractual obligations.
Kelly and his cohorts claim that an overall maritime industrial policy will provide net economic benefits, but that’s not the case. If government diverts resources from where a market would allocate them, overall economic output will go down, not up. If there were a true and important national defense interest served, the cost would arguably be worth bearing. In this case, the relationship is highly tenuous and success highly questionable. The costs are far more certain than the potential benefits.
This has been a mostly critical assessment. However, Kelly’s maritime strategy initiative is a serious endeavor on an important, but politically unsexy, topic, and in that respect laudable. My guess is that Kelly will be a serious legislator, over time charting a more independent path and becoming a more independent force in the Senate. That would be good for the state and the nation.
Today’s politics are suffused with irony. And there is one ironic twist to Kelly’s maritime strategy initiative worth mentioning as a coda. Kelly occupies the seat formerly held by John McCain. One of McCain’s legislative hobbyhorses was futile efforts to repeal the Jones Act.
Reach Robb at robtrobb@gmail.com.