Sometimes bad news is good news. Certainly that's true when the bad news is that the patchwork quilt of maritime subsidies, loan guarantees and cargo preferences is in tatters. That's one of the conclusions of a series by Post reporters Howard Kurtz and Michael Isikoff. But unfortunately the news is not completely bad. There's still a lot of work to be done before the whole rotten structure of maritime regulation is dismantled. And some of the costs will, even then, continue to come due.
The Reagan administration deserves much of the credit for the bright side of the story. In 1981 the administration jettisoned the old ship construction subsidies. This has put a lot of shipyards out of business, at some human cost. But the economic cost of maintaining these facilities was exorbitant.
Ship operators, breaking the longtime solidarity of maritime interests, supported this move because the administration allowed some of them to receive operating subsidies for ships built abroad. Now the administration wants to make this arrangement permanent. That's a bad idea. It would be better to pare down the subsidies, which cost $380 million last year for a U.S. flag fleet of only 400 ships. Other bad ideas: cargo preference, which reserves half of government cargo (food relief, for instance) for U.S. flag ships, and the Jones Act, which requires all cargo carried between U.S. ports (mainly Alaskan oil these days) to be carried in them.
The justification for all this has always been strategic: the United States needs a bigger civilian merchant fleet in case of war. That argument collapses under scrutiny. The Reagan administration has been increasing the Navy's supply of cargo ships, and any U.S. government in time of war would have access to the hundreds of ships owned by U.S. companies and registered under Liberian and Panamanian flags of convenience.
So the argument for maritime subsidies boils down to this: taxpayers and consumers should pay billions of dollars to continue the special and often lavish benefits enjoyed by a dwindling number of merchant seamen, shipyard workers and sharp operators who have figured out how to work the maritime laws. Who in Congress will come forward to take on this fight and earn the credit for completing the job the Reagan administration has begun of unraveling the maritime system?