Though grocery inflation has moderated in recent months, Bloomberg recently reported that food prices remain at the top of Americans’ inflation concerns. Unsurprisingly, this issue has become a major theme of the 2024 presidential election, with Joe Biden and Donald Trump—and Democrats and Republicans in Congress—pointing fingers at each other and making their case before American voters.

Yet, as I wrote in my column this week at The Dispatch, few people in Washington actually seem interested in lowering grocery prices—instead, some have been actively trying to increase them in recent cases by using protectionist trade policies to restrict available supply of products, such as beef, frozen shrimp, and fresh tomatoes. These recent actions (which are described in greater detail in my column) are moreover just the latest examples of long-standing US food protectionism.

For starters, as Table 1 shows, the United States still maintains high most-favored nation (MFN) tariffs on many food products, including produce that can’t be easily grown in most parts of the country, meats from different animal sources, and various dairy products.

Not included in the table are special tariff rate quotas, which impose additional tariffs on products such as sugar, milk, butter, cheese, baby formula, ice cream, peanuts and peanut butter, canned tuna, chocolate, and many others once imported quantities rise beyond a certain threshold within a specific timeframe. These quotas can significantly raise prices—the US International Trade Commission in 2017 found that Americans pay 12 percent, 15 percent, and 21 percent more for imported tuna, cheese, and butter, respectively, because of these trade restrictions. And altogether, the US Department in Agriculture (USDA) estimated in 2021 that eliminating US agricultural tariffs would increase consumer well-being by $3.5 billion per year.

Yet “standard” tariffs are just the tip of the iceberg when it comes to US agricultural protectionism. As Table 2 shows, there are 38 antidumping or countervailing duty orders on various foodstuffs, some dating back to the 1990s. These duties are additional to any MFN tariffs already in the books, and as I have written previously, they are imposed through laws that are intended to increase domestic prices whilst barring the investigating agencies from considering the harms that any action could cause to consumers, the broader economy, or even other US foreign policy interests.

And then there’s the “regulatory protectionism” that the federal government has long used to restrict the importation of items like beef, tuna, catfish, produce, and biofuels. Though such regulations may be imposed under the guise of protecting humans, animals, and the environment, they often protect special interests without any legitimate health, safety, or environmental basis. Notable examples of such regulatory restrictions include Obama-era mandatory Country of Origin Labeling requirements (which cattlemen and their congressional allies are seeking to revive); Food and Drug Administration sanitary restrictions on infant formula imported from high-standard countries in Europe and Australia and New Zealand; the Renewable Fuel Standard; and USDA-sanctioned produce marketing orders.

On a more optimistic note, American food abundance is very likely to increase in the future if individuals here and abroad remain relatively free to exchange goods, services, and ideas. As the Simon Abundance Index developed by Cato’s Marian Tupy and Gale Pooley documents, the relative abundance of 50 basic commodities, including many foodstuffs, exhibits a long-term increase and bounced back strongly last year after a brief, pandemic-induced decline. Meanwhile, the USDA projects that grocery inflation should continue to decelerate in 2024. (In some cases, prices may even decline.)

Were these gains to materialize, Americans should rightfully celebrate them—while keeping in mind that, in many respects, they happened not thanks to the folks in Washington.

President Biden’s Treasury Department has been the key driver of the Organisation for Economic Co-operation and Development’s (OECD’s) project to create a global tax system that raises the cost of international investment and taxes the most profitable American companies. As the global tax begins to be implemented around the world, it has become clear that the administration negotiated a bad deal for American businesses, their employees, and the US Treasury.

The administration and some Democrats in Congress are now trying to shift blame to Republicans, claiming that by pointing out the structural flaws in the deal, it’s Republicans’ fault that Americans are staring down a costly global tax hike. Republicans are right to criticize the OECD, and as appropriations season gets underway, they should renew efforts to limit US funding of the OECD for projects that raise taxes or otherwise promote government-centric policy solutions. 

A US-Led Effort, a Biden-Created Problem 

In her testimony before the House Ways and Means Committee in May, Treasury Secretary Janet Yellen characterized the OECD global tax deal as a US-led effort and told Congress that “we have pushed our allies” to adopt the deal. While true, this is a remarkable understatement.

For the past three years, administration officials have been waging a campaign to pressure our allies into adopting the new tax rules. They have done this while knowing that the OECD tax hikes are not supported by the US Congress, including some Democrats.

The most public pressure was put on Hungary in the summer of 2022, when the US Treasury canceled a tax treaty with the small European country in what the Wall Street Journal called a “counterpunch against” the country, which had emerged as a vocal obstacle to the global minimum tax deal. This is just one piece of the relentless pressure campaign waged by US officials to push other countries to the bargaining table and ultimately to adopt the global minimum tax system.

Now that some portions of the global tax increase are moving forward without the United States, Treasury officials are beginning to “recognize that US multinationals are in somewhat of a unique situation and face compliance difficulties that a lot of other countries’ multinationals don’t face.” This is because the Biden administration negotiated a complicated new tax system that allows 140 countries to claim new taxing rights on primarily American businesses.

Proponents of the deal in Congress and the Treasury Department have claimed that Republicans’ unwillingness to accept the bad terms the administration has negotiated will make a bad deal even worse. This is a contortion of the facts. The new costs faced by US multinationals are the direct result of the deal dragged across the finish line by the Biden administration.

Budget Inconsistencies 

It’s not clear from reading the president’s budget if the administration believes its own rhetoric about the OECD deal being good for the world and good for the United States. President Biden’s fiscal year 2025 budget proposal includes a number of significant tax increases that ostensibly align the United States with the OECD’s global tax deal. For example, the Green Book describes modifications to global intangible low-taxed income—the existing US minimum tax—to make it OECD-compliant. However, the proposal increases the new minimum tax rate to 21 percent (instead of the 15 percent US-negotiated OECD rate). The Green Book also raises the Inflation Reduction Act’s new corporate alternative minimum tax from its 15 percent rate to a 21 percent rate.

These proposals should leave Congress and peer nations around the world with several questions for the administration and how it sees its proposals as consistent with what it’s pushed for at the OECD. Does the administration think that its negotiated minimum tax rates are insufficient? Does the United States think the global minimum tax rates should be 6 percentage points higher (21 percent versus 15 percent)? And why have multiple overlapping corporate minimum taxes in the United States? Does the US Treasury believe the OECD global minimum tax is flawed in some way? There is also nothing in the Green Book to implement Pillar One, the second component of the US-negotiated global tax plan. The administration has negotiated a deal it doesn’t seem to believe in fully.

Appropriations Season Presents an Opportunity

Republicans are right to question the value of the global tax deal as negotiated by the Biden administration. As a matter of process, wholesale accepting an international tax increase on American business, negotiated by the president without any congressional input, sets a concerning precedent and undermines Congress’s constitutional role in setting tax policy and advising and consenting to treaties.

The primary message other countries are hearing from the United States is from Treasury officials, like Secretary Yellen, who have an ideological stake in the success of the OECD global tax increases. A louder and more forceful congressional message rejecting the OECD deal could go a long way toward undermining the administration’s pressure campaign for other countries to adopt the OECD rules.

Last spring, 10 House Republicans, led by Rep. Adrian Smith (R‑NE), asked the Appropriations Committee to prohibit US funding for the OECD from being included in next year’s budget. Members who are concerned by the Biden administration–led OECD effort to increase global taxes on Americans businesses should again push to withhold OECD funding—and ultimately US OECD membership—if the organization continues to facilitate implementation of its global tax system.

A more vocally opposed US Congress would help slow the adoption of the OECD system and could help undo the damage that has already been done.

Last week I wrote that if Congress truly cares about the Constitution, it should step in and reform the sweeping financial surveillance that is now the norm. Unfortunately, Representative Sean Casten (D‑IL) answered that call by doubling down and attempting to further restrict financial privacy in the United States with the introduction of the “Blockchain Integrity Act.”

In short, the Blockchain Integrity Act would first establish a two-year moratorium that prohibits financial institutions from going anywhere near cryptocurrency that has been routed through a mixer (a page out of Senator Elizabeth Warren’s (D‑MA) playbook). With that two-year moratorium in place, the Blockchain Integrity Act would then require the Department of the Treasury to study how people use mixers and other privacy-enhancing technology.

While the bill may be better than an outright ban, it’s not much better. Let’s consider the two provisions of the bill more to understand why.

A Two-Year Prohibition for Banks and Other Financial Institutions

As far as the prohibition is concerned, it would be illegal for financial institutions to “handle, use, or transact” cryptocurrency that has been routed through a mixer in the past or is routed directly (by a bank) to a mixer in the future.

Each violation carries up to a $100,000 penalty. Yet what’s perhaps more concerning is the ambiguity regarding past transactions. For example, the second condition is somewhat clear in that a bank is not allowed to send cryptocurrency “directly” to a mixer. This language suggests that a bank is no longer liable if a customer withdraws funds and then sends it to a mixer in a separate transaction at some later point. Yet the language describing previous transactions seems to suggest that a cryptocurrency must be blacklisted if it goes through a mixer at any time in the past.

This requirement is deeply concerning because it means the list of prohibited cryptocurrencies would only continue to increase so long as people continue to use mixers. Yet it is even more concerning for cryptocurrencies like Bitcoin, where there is also a finite supply. In other words, if people continue to use mixers for Bitcoin, then financial institutions could effectively become prohibited from touching Bitcoin at all once all 21 million bitcoins are run through mixers.

It likely wouldn’t take such an extreme scenario. Once some critical amount is reached (e.g., 50 percent of all bitcoins), it’s likely that banks would say the risk is too high and shut down operations. And that critical amount may not be too far away given that estimates suggest 1.6 million bitcoins were sent through the mixer known as Bitcoin Fog. That alone accounts for 7.6 percent of all bitcoins that will ever exist.

A Request to Find Out What Privacy Is

The second half of the legislation—the request for a study—is less concerning if it’s considered alone and without the surrounding context. The request seeks information regarding different types of privacy-enhancing technology, illicit and legitimate use history, and an analysis of what the government’s role might be here (among other things). Those are all reasonable inquiries. 

Again, without additional context, it’s an encouraging sign that Representative Casten is interested in learning more about how this technology is used for both better and worse. Yet what isn’t encouraging is that Representative Casten introduced the bill saying that “until we’ve studied [privacy enhancing technologies like mixers] and have a good audit trail, the presumption should be that these are money laundering channels.” So, without reservation, the stated position is that the presumption should be guilty until proven innocent.

If it were not for this statement and the stance that privacy should be banned until the government understands the technology, then the study would be welcome. But there is little getting around the reality that the bill effectively admits a lack of understanding while simultaneously calling for what it doesn’t understand to be prohibited.

Conclusion

As I cautioned last week, policymakers should rethink how financial privacy is treated. Americans would be less likely to seek out privacy tools if companies were not required to collect all of their information just to open an account. Rather than double down on decades-old surveillance, it’s time to rethink and reform how the system works.

Casual readers might misinterpret reports of yesterday’s decision by the federal Canadian government to make it illegal to consume illicit drugs in public spaces in British Columbia to mean that the federal government has just squelched the province’s three-year drug decriminalization. That is not the case.

In 2023, lawmakers in Ottawa exempted British Columbia from federal drug prohibition laws, permitting the province to begin a three-year pilot program decriminalizing the possession of all illicit drugs for personal use. Advocates of the idea argued decriminalization would allow law enforcement to focus resources on violent crime and drug trafficking.

Many residents of Vancouver and other British Columbia municipalities have grown upset viewing drug use and disorderly behavior in public spaces and complained to the provincial government. The provincial government requested federal lawmakers to modify British Columbia’s exemption to prohibit drug use in public parks, public sidewalks, and other public spaces.

The government will still allow adults to possess illicit drugs for personal use, but they must use them in private spaces and legal residences, overdose prevention centers, or other facilities operated by harm reduction organizations.

It is understandable and not surprising that many residents of British Columbia communities don’t want people openly using mind-altering drugs, especially in front of their children. They may get particularly upset if people under the influence of these drugs crowd public walkways, the doorways of their businesses, or congregate in public parks and near children’s playgrounds.

I think it is crucial for libertarians—and others who seek an end to the war on drugs—to make clear that we have no problem, in principle, with public nuisance laws. However, lawmakers must overcome a high bar when designating certain behaviors as public nuisances. And law enforcement should be reasonable, empathetic, and discretionary when they enforce such laws. I made this point in this blog post.

State and local governments have long had laws that prohibit openly consuming alcohol in public spaces. And public nuisance laws have their roots in English common law.

If harm reduction advocates and drug war opponents hope to see incremental reforms such as drug decriminalization avoid a public backlash, they should stress two major points:

• Decriminalization is not as effective as legalization. It preserves the black market, enriching the drug cartels and incentivizing them to develop even more potent forms of illicit drugs. Decriminalization also means drug users must still obtain their drugs on the dangerous black market, where they cannot be sure of the potency and purity of the drugs they purchase or even if they are the drugs they believe they are buying. Advocates of decriminalization should avoid promoting unrealistic expectations of decriminalization’s impact on overdose deaths.
• They should clarify that there is nothing wrong with enforcing public nuisance laws, as I discussed in this blog post, as long as they are enforced rationally and non-violently. (The same principle applies to homeless people camping on commercial streets or in front of residential properties.) 

Mary Anastasia O’Grady made a similar point when she wrote of Ottawa’s adjustment to British Columbia’s decriminalization experiment in the Wall Street Journal this week: ”The U.S. gave up alcohol prohibition in 1933 but to this day you can’t walk down Fifth Avenue with an open bottle of vodka. It isn’t too much to ask that drug use be contained to private spaces.” 

The iron law of prohibition—the harder the law enforcement, the harder the drug—is the reason why, in recent years, fentanyl has replaced heroin, the veterinary tranquilizer xylazine began being added to fentanyl to make more potent and deadly tranq, and, more recently, the synthetic opioid isotonitazene (“iso” or “tony”) has made its debut in the dangerous black market that prohibition fuels. As policymakers keep doubling down on law enforcement strategies to prosecute the futile war on drugs, they provide greater incentives for drug trafficking organizations to create new and more potent drugs and drug combinations to meet market demand.

State lawmakers have begun to crack down on xylazine by designating it a controlled substance. Florida, Ohio, Pennsylvania, and West Virginia have already done so, and several other state legislatures are also considering doing so. The American Veterinary Medical Association has called on Congress to add xylazine to the schedule of controlled substances, and a bill before Congress that would designate xylazine as a Schedule III drug has drawn bipartisan support.

Enter medetomidine/​dexmedetomidine, or Domitor. Law enforcement first detected this veterinary tranquilizer in fentanyl, fentanyl analogs, and cocaine samples seized in Maryland in 2022. The DEA has since detected it in St. Louis and in clandestine laboratory seizures in Florida, Ohio, and Canada.

Like xylazine, medetomidine is a potent veterinary anesthetic/​analgesic. Estimated to be 200 times more powerful than xylazine, PAGround​hogs​.org, a Pennsylvania non-profit harm-reduction drug testing organization, found it in two bags of fentanyl in Philadelphia and two dozen samples from Pittsburgh, Cambria County, and Blair County in Pennsylvania.

Look for medetomidine to become more prevalent if policymakers make it more difficult for drug traffickers to access xylazine.

Last year, in testimony before the House Judiciary Committee Subcommittee on Crime and Government Surveillance, I warned lawmakers that nitazenes were on the horizon and that doubling down on law enforcement to address the fentanyl overdose crisis may make a nitazene crisis come sooner. Instead, Congress passed the FEND OFF Fentanyl Act, which President Biden recently signed. Intended to put more pressure on the makers of illicit fentanyl and fentanyl precursors, the new law is likely to incentivize drug trafficking organizations to switch more rapidly to nitazenes, the precursors of which will be easy to come by but harder for law enforcement to track.

As is usually the case in the war on drugs, policymakers are fighting the last battle while drug trafficking organizations are opening new fronts.

If you read the endnotes for Build, Baby, Build, you’ll learn about all of the papers I could find on the connection between fertility and housing prices/​housing regulation. I’m afraid the total is only three:

• Simon, Curtis, and Robert Tamura. 2009. “Do Higher Rents Discourage Fertility?” Regional Science and Urban Economics 39: 33–42.
• Mulder, Clara, and Francesco Billari. 2010. “Homeownership Regimes and Low Fertility.” Housing Studies 25: 527–41.
• Shoag, Daniel, and Lauren Russell. 2018. “Land Use Regulations and Fertility Rates.” In One Hundred Years of Zoning and the Future of Cities, edited by Amnon Lehavi, pp.139–49.

All three articles affirm that lower housing prices and/​or less housing regulation raises fertility. But to be honest, the main reason I’m convinced of the natalist power of housing deregulation is not the research but common sense. Specifically:

• Higher housing prices make young adults more likely to keep living with their parents.
• Young adults who live with their parents are unlikely to marry.
• Even married young adults who live with their parents are unlikely to have kids.

I call this the problem of “basement fertility”: Living in your parents’ basement is a powerful form of contraception. Make housing a lot cheaper, and young adults will form new households — and new families — sooner.

The main doubt: Housing deregulation allows greater population density, and some smart people are convinced that density causally reduces fertility. Several people have recently waved Rotella et al.’s “Increasing Population Densities Predict Decreasing Fertility Rates Over Time: A 174-Nation Investigation” (American Psychologist, 2021) in my virtual face. While Rotella et al. admit that their main evidence is not really causal, they appeal to animal experiments where density per se slashes fertility:

In nonhuman animal studies, higher population densities have been associated with reduced reproduction rates (Fowler, 1981, 1987). Further, experimental work suggests that this relationship is causal: Organisms downregulate their fertility rates in higher densities (e.g., Both, 1998; Dhondt et al., 1992; Leips et al., 2009; see Sng et al., 2017; for a recent review of this literature).

Later, Rotella et al. elaborate:

In this view, adaptive behavioral responses depend on ecological constraints, which can differ in high- and low-density populations. Low-density environments are often characterized by high resource availability per individual, and lower intrapopulation competition for resources. In such conditions, it is more adaptive for individuals to exploit resources at a faster pace, to reproduce earlier, and have more children. In contrast, in more dense environments, there is greater competition between individuals. For individuals to compete successfully in such an environment, one needs to build relevant skills and knowledge, which in turn delays reproductive efforts. Moreover, it is likely that in high-density contexts, offspring also require more investment to become competitive enough to survive and reproduce. Thus, it is comparatively more advantageous to invest more heavily in fewer children in population-dense environments.

If you actually read Rotella et al., you’ll find that they measure population density at the national level. Get a country’s total population, divide it by the total land area, and you get their density measure. Which yields something like the following global map:

A few critical remarks are in order.

1. If animal experiments are your inspiration, national population density is a bizarre measure. Should we imagine that Muscovites will have lots of kids because their country includes millions of square miles of Siberian emptiness? Animals don’t care about populations beyond their fields of vision. Should we expect humans to be so different?
2. Even if you take Rotella’s approach as gospel, their paper simply has zero to say about housing or urbanization. Packing your people into fewer houses or taller buildings doesn’t change national density, which remains total population divided by total land area.
3. Suppose we switch to a more localized measure of population density. The fear that deregulation will raise this measure of density and thereby reduce fertility is now coherent. But is it correct?

a. “High housing prices suppress fertility” starts with a strong presumption in its favor, and has a clear policy implication for natalists: deregulate so prices fall and fertility rises.

b. Much of the observed correlation between local density and fertility is clearly reverse causation. People who want large families tend to move to spacious housing; people who don’t want large families move to pricey downtowns.

c. “Density suppresses fertility” and “High housing prices suppress fertility” are very hard to distinguish empirically. After all, why do urbanites live in such small places? In large part, because large residences in urban areas are extremely expensive. Imagine, though, that a 5000 square foot apartment in Manhattan rented for $1000 a month. Should we really think that New Yorkers wouldn’t spring for the extra elbow room? And once they have this extra elbow room, will the fertility effect really vanish because they’re too high off the ground?

d. I do not claim that housing prices are the only factor that shifts fertility. Culture matters, foresight matters, and contrary to what you’ve heard, so do baby bonuses. But as far as I know, dense cities with cheap, spacious housing simply don’t exist in the First World. And under laissez-faire, they probably would. 

e. On balance, full deregulation would very likely increase urbanization. As I’ve explained before:

Current regulation strangles urban construction, and heavily restricts suburban construction. If you got rid of this regulation, skyscrapers really would start going up all over high-priced cities – and millions of urban commuters would swiftly relocate to occupy these new buildings. Families with children would naturally be less-eager to go urban, but even they might be tempted by large, cheap apartments across the street from their jobs.

Plenty of other folks would respond by moving into all of the newly vacant – and suddenly cheap – suburban homes. This could conceivably fully satisfy suburban demand, but the more likely result is that developers would also take advantage of deregulation to subdivide existing lots and build lots more single-family homes. And of course other developers would buy up neighborhoods of old single-family homes, bulldoze them, and replace them with massive cheap apartment complexes.

f. So would deregulation raise or lower density? It depends on the measure. Any localized measure that takes population and divides it by land area will rise. Even in suburbs, because a deregulated world would abolish minimum lot sizes. But a more sensible density measure like “indoor living space per person” would likely plummet.

To be clear, housing prices probably aren’t the main cause of falling fertility. I put more blame on laborious parenting philosophies, intermediate foresight, and absurd credential inflation. But cheaper housing would almost surely help, and freeing housing markets is the best known way to make housing cheap.

Washington State Ferries (WSF) has certainly seen better days. With over 3,500 canceled sailings last year and just 15 of its 21 vessels reliably operating, a recent Seattle Times editorial described the ferry system as “in crisis” and characterized its fleet as “antiquated” and “depleted.” Such language is apt. With 11 of the system’s ferries at least 40 years old and WSF five short of the 26 vessels it considers ideal, new vessels are badly needed. Unfortunately, none are projected to arrive until 2028 at the earliest.

The ferry system’s troubles have become a topic of this year’s governor’s race, including criticism of the state’s decision to procure ferries powered by hybrid electric engines—a move some observers allege has complicated the acquisition process. At most, however, this is only a proximate cause of WSF’s ferry woes. Far more deserving of blame are protectionist maritime laws that prohibit the purchase of vessels from the international market. Such restrictions mean that WSF—in fact, all US ferry systems—must provide service with one hand tied behind their backs.

That Washington urgently needs to revamp its ferry fleet isn’t news. Five years ago, the state passed legislation allowing a contract extension with Seattle shipyard Vigor—which has built WSF’s last ten vessels—to build up to five more large ferries using hybrid electric technology. But negotiations with the shipyard then hit a snag. While Washington had pegged the cost of new ferries at $188 million each in 2018—an estimate that rose to $249 million in 2022—the price quoted by Vigor for the first such ferry was over $400 million.

Ouch.

Washington responded by rebidding the contract and changing its law so shipyards outside the state could compete to build the vessels. That, however, has meant delays in the acquisition process, mounting frustration among ferry users, and the ongoing exchange of barbs over the new propulsion system.

But this controversy misses the bigger picture. Washington’s chief obstacle to cost-effectively acquiring new ferries isn’t rooted in technology but protectionism. One only needs to look across Washington’s international border to see why.

In late 2019, only two months after Washington announced its plan to purchase new hybrid electric ferries, Canadian ferry operator BC Ferries ordered four vessels with the same technology from a European shipbuilder. All four were delivered before the end of 2021. Featuring a capacity approximately one-third that of the vessels sought by WSF (450 passengers and crew and 47 vehicles versus 1,500 passengers and 144 vehicles), the ferries cost about $38 million each—less than a sixth of the new WSF ferries’ estimated price.

WSF and BC Ferries’ contrasting experiences are largely (if not entirely) due to the latter’s ability to buy vessels from international shipbuilders. When BC Ferries announced its desire to purchase four new hybrid electric ferries, 18 shipyards from around the world indicated their interest (of which 9 were selected to compete). Notably, not a single Canadian shipyard bid on the project.

In contrast, WSF must contend with the 1920 Jones Act, which applies to the domestic waterborne transportation of merchandise (e.g. vehicles), and the Passenger Vessel Services Act of 1886, which restricts the domestic waterborne transportation of people. Both laws require vessels to be constructed in US shipyards that are far less numerous and far less competitive than their international counterparts. Significantly higher prices for WSF’s new ferries are a foregone conclusion.

And the protectionist headaches don’t stop there.

After the vessels are delivered, WSF still faces the task of finding mariners to crew them. That’s unlikely to be easy, with a January report from Washington’s Department of Transportation pointing out that the ferry system faces “severe staff shortages that are unprecedented in its 70-year history.” Maritime protectionism figures here too. While BC Ferries and other international ferry systems can hire skilled foreign mariners to help mitigate such crew shortages, the report points out that WSF is “precluded from doing [so] by the 1920 Jones Act” (US-flagged vessels are restricted in the employment of foreign nationals to green card holders). 

Unfortunately, Jones Act-induced complications to US ferry systems go beyond Washington.

Like WSF, the Alaska Marine Highway System (AMHS) also needs new vessels, including a hybrid electric replacement for its 1964-built ferry Tustumena. Described by the system’s director as thirty years past its prime, the ferry has a history of structural issues and saw its return to service from an annual overhaul recently delayed by the discovery of wasted steel. Just maintaining the vessel costs $2 million per year. As the Anchorage Daily News has pointed out, however, finding the money and a shipyard willing to build the new ferry is proving a challenge:

The replacement vessel is expected to cost around $350 million. Sam Dapcevich, a marine highway spokesperson, said the state has so far secured nearly $243 million, counting around $60 million in expected federal formula funds. That leaves more than $107 million needed to fund the project. The state is hoping most — if not all — of the balance can be covered through a federal grant.

As of March, amid months of delays, the Tustumena replacement vessel has yet to go out to bid. The design was changed to include batteries, reflecting a federal requirement for reduced emissions. A bid attempt in 2022 yielded no takers [emphasis and hyperlink added]. Last summer, [AMHS Director Craig] Tornga said he wanted to select a shipyard by the end of the year. In December, Tornga said he wanted to put out a request for proposals in January. Delays have piled on as Tornga held meetings with several shipyard officials to ensure that unlike in 2022, shipyards would, in fact, bid on the project.

On the East Coast, meanwhile, Massachusetts’ Steamship Authority hasn’t even bothered constructing new purpose-built vessels to replace three of its aging (and deteriorating) ferries. Instead, it purchased three offshore service vessels—all at least fifteen years of age—used to support Gulf of Mexico offshore oil and gas operations and is converting them into ferries. The project has already experienced hiccups, with the conversions’ cost increasing from a projected $9 million per vessel to $13.6 million.

Transporting over 131 million passengers in 2019, ferries form an important part of the US transportation system. They are particularly vital for parts of the country, including Alaska and the greater Puget Sound region, for which land-based transport alternatives are either less direct and more time-consuming or non-existent. For these communities, ferry service is a lifeline and their difficulties demand an effective response from policymakers. Taking aim at costly and ineffective maritime protectionism that impedes US ferry systems’ ability to obtain the vessels and mariners they need would be an excellent start.