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CNN: LOU DOBBS TONIGHT February 28, 2006

Republicans Deeply Split Over Dubai Ports Deal

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DOBBS: There is no question that the United States has a serious, serious national security issue in port security. There are also serious, serious critical issues of national security in the number of ships the United States actually owns.

Kitty Pilgrim has the report.

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KITTY PILGRIM, CNN CORRESPONDENT (voice over): Of the 10,000 cargo ships now in the world, there are only about 230 ships left that fly the American flag, and many are not American owned.

After World War II, the United States had the largest shipping fleet in the world. Half of all privately-owned ships were American. But now, the U.S. government has to pay foreign-owned ships to fly the U.S. flag to make them available in time of war.

JOHN PIKE, GLOBALSECURITY.ORG: If it wasn't for that subsidy program, the United States, I don't think, wouldn't -- we wouldn't have any flag ships at all for cargo trade because the American crews are simply too expensive relative to a crew that you could put together from, say, the Philippines.

PILGRIM: In exchange for $2.6 million per ship every year, the ship must sail with an American crew and fly an American flag. But they don't have to be American-owned ships. U.S. taxpayers currently subsidize some 60 ships, many of them foreign-owned.

Eleven percent are owned by a Norwegian parent company. Fifteen percent by a company majority owned by the Singapore government. Forty percent are ships with a Danish parent company, 8 percent have German ownership. Only about 13 percent are U.S.-owned.

REP. WALTER JONES (R), NORTH CAROLINA: As a government, we need to make more of an investment in our merchant marine fleet because this is obviously a world that we live in that is a world that is unsettled. We don't know what tomorrow is going to bring. We're dependent on these other countries, and it could be one day one of these countries could possibly be our enemy. Then where are we going to be then?

PILGRIM: The merchant marine Web site sums up of the emergency. "The United States imports approximately 85 percent of some 77 strategic commodities critical to industry and defense."

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PILGRIM: Now, these ships are vital to U.S. security. During Operation Desert Shield and Desert Storm, about 80 percent of military equipment and supplies moved on the U.S. flag fleet -- Lou.

DOBBS: Two percent of the entire world shipping fleet.

PILGRIM: Yes, that's it.

DOBBS: Incredible.

PILGRIM: We're almost out of the business, basically.

DOBBS: We are out of the business, and we're in deep, deep trouble as well.

Thank you very much.

Kitty Pilgrim.

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