Have you ever heard of Hawaii Superferry? Well, in light of the recent news about the Solyndra bankruptcy, I thought you might like to know about another government handout that went swimmingly well, just like Solyndra.
There are two passenger ferries sitting empty at the Lambert’s Point Dock in Norfolk, VA. They were commissioned by a company called Hawaii Superferry. The company received $140 million in federal loan guarantees to pay for these two floating pigs, and then in 2009 defaulted and filed for bankruptcy.
The pork program involved is known as Title XI and has been around since 1936. Its purpose was to promote the growth and modernization of America’s merchant marine industry. Republicans and Democrats have historically used the program to support shipbuilders and owners of all kinds of marine vessels in their districts.
After 129 defaults cost the taxpayer over $2 billion Reagan suspended the program in 1987. It was resurrected by Clinton in 1993 when Title XI was reauthorized. Since reauthorization in 1993 the government has paid out $801 million in defaults on 15 loans it guaranteed. The government was able to recover only $142 million by seizing and selling assets of defaulting companies.
Now it’s 2011 and despite Title XI’s miserable bad-loan record, this year the Obama administration has awarded vessel owners $798 million in new guarantees, the most since 2001. An additional $712 million is currently being reviewed and will likely be approved. I personally like Reagan's 1987 decision - get rid of the program!
The program Administrator, David Matsuda, told a House panel that “the agency hasn’t always assessed risk.” And at times “decisions were made that, well, maybe they weren’t the best.” Well, no kidding!
And here’s what I found in the fine print of the Title XI authorization bill: “Title XI authorizes the U.S. Government to guarantee the repayment of debt obligations, including unpaid interest, of U. S. or foreign ship-owners…..” That’s right, FOREIGN SHIPOWNERS have access to these U. S. taxpayer loan guarantees. Are you upset yet? Disgusted?
The Cato Institute says that despite the massive losses in Title XI, members of Congress with shipbuilders in their districts will “fight to the death for it.”
The two Hawaii Superferry ships? They’re sitting in VA hoping the U. S. Maritime Administration can sell them for whatever they can get out of them in an attempt to recoup something, anything, for the U. S. taxpayer.
And Obama laments there’s no way to cut spending, we’ll be just fine if everyone “pays their fair share.”
Ah, Water Pork, pretty tasty, don’t you think?
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