U.S. Coast Guard Undergoes $70 Billion Modernization and Reform

The bill makes convicted sex offenders ineligible for merchant mariner credentials under federal law (not just state, local, or tribal law). It also strengthens the penalties for grossly negligent vessel operation, making serious bodily injury cases a class E felony. These provisions tighten accountability for individuals with criminal histories in the maritime sector.

Small maritime businesses face a mix of impacts. The bill restricts vessel construction in foreign shipyards, which could benefit domestic shipbuilders but raise costs for vessel operators. Streamlined merchant mariner credentialing and reduced training requirements may ease workforce shortages for small fishing and commercial vessel operators. New regulations on abandoned vessels create reporting requirements but also help address derelict boats that pose hazards to navigation.

The bill extends through 2065 a provision allowing up to 50% of unlicensed seamen on certain vessels to be non-citizens, while also expanding eligibility for merchant mariner credentials to noncitizen nationals. These provisions have mixed effects — maintaining employment access for some foreign workers while the broader credentialing changes could affect visa holders in the maritime industry.

Active-duty Coast Guard members benefit significantly from this bill. It authorizes growing the force from about 44,500 to 60,000 by 2029, expands family leave policies to include long-term foster care and reserve members, creates new travel allowances for members stationed in Alaska, provides maternity uniform allowances for pregnant officers, and establishes a tuition assistance pilot program tied to sea duty. The bill also invests in behavioral health support, including embedding behavioral health technicians at Coast Guard clinics and hiring additional behavioral health specialists.

Veterans of the Coast Guard benefit from provisions strengthening the review of discharge characterizations, particularly for cases involving sexual misconduct. The bill also improves the sharing of medical records with the Department of Veterans Affairs and ensures veterans who were victims of covered misconduct can pursue VA benefits claims with better access to retained evidence and records.

The bill authorizes significant increases in retired pay funding — from about $1.1 billion in FY2025 to $1.65 billion in FY2029 — covering retired pay, survivor benefits, career status bonuses, continuation pay, combat-related special compensation, and medical care for retired personnel and dependents. It also improves evidence retention and medical record sharing with the VA, which helps veterans access their earned benefits.

The bill creates a new Embedded Behavioral Health Technician Pilot Program at Coast Guard clinics, requires hiring at least 5 additional behavioral health specialists (with 35% having military sexual trauma experience), and mandates reporting on behavioral health facilities at the Coast Guard Academy. These provisions aim to improve access to mental health care for Coast Guard members, especially those at high-tempo operational units or those who have experienced trauma.

Coast Guard civilian employees benefit from new direct hire authority for medical professionals, childcare workers, housing office staff, special agents, and Academy faculty. The bill also creates recruitment, relocation, and retention incentive programs for civilian firefighters at remote Coast Guard locations. These provisions address critical staffing shortages that have made it difficult to fill essential positions.