The Jones Act survives because it prevents a handful of US shipbuilding and merchant shipping operations from going out of business, and nobody else with political clout really cares.
But the executive branch has the authority to waive the act in special circumstances, as it has done in the past whenever the downside of making it excessively expensive to ship American goods from one place in America to another becomes a high-profile issue.
- The Bush administration issued Jones Act waivers after Hurricanes Katrina and Hurricane to speed the shipment of fuel to the Gulf Coast.
- The Obama administration issued a more limited waiver after Hurricane Sandy, again to speed the shipment of fuel.
- On September 8, the Trump administration issued Jones Act waivers for areas impacted by Hurricane Harvey.
As Keith Hennessey, formerly the top economic adviser to President Bush, recounted in a 2010 blog post, the politics of Jones Act waivers are difficult. Emergency waivers in rare periods of spiking demand don’t put anyone out of business, but they still do have a long-term cost for the industry. If American-owned ships could count on windfall profits derived from price gouging arising every time a hurricane causes acute fuel shortages in a coastal location, that would support the creation of a slightly larger stock of domestic boats.
When considering the Katrina waivers, Hennessey recounts, “the pushback was not just from maritime unions, but also from the U.S.-flagged shipping industry, including shippers and shipbuilders, and including Rs and Ds on Capitol Hill who were close to the industry.”
At the end of the day, “without a strong lean from President Bush on his Cabinet to ‘do everything we can,’ the waivers would not have happened,” given the intensity of the political pushback.
Of course, one advantage that residents of Louisiana, Texas, and New Jersey have had in seeking Jones Act waivers is that they are represented in Congress by senators and House members. These congressional representatives wouldn’t ordinarily pick a big fight with shipbuilding and maritime union interests, but in the moment of a crisis, they certainly can and do.
Puerto Rico, however, lacks congressional representation, which is surely a factor in the island’s inability to secure a waiver, even though the Trump administration issued waivers for areas affected by Hurricane Harvey just a few weeks ago. But another issue is that the specific application of the Jones Act to Puerto Rico actually is a really big deal economically even when a hurricane doesn’t strike.