Tough choices in FY-16 budget
By Lee Hudson
A new Republican majority in Congress means the Navy will continue to have to make tough choices on what the priorities are in its 30-year shipbuilding plan, according to a Defense Department official and defense analysts.
Pentagon acquisition chief Frank Kendall said November 5 at a Navy League breakfast in Arlington, VA, he hoped the recent midterm elections in which Republicans took control of the Senate and held control of the House means the elimination of automatic spending cuts triggered by sequestration that will take $116 billion from the defense budget between fiscal years 2016 and FY-19.
“In a sense, the Defense Department’s being held hostage,” he said. “Maybe — and it’s just speculation — maybe something will come out of this election that will make us work together and get rid of sequestration.”
Bryan Clark, senior fellow at the Center for Strategic and Budgetary Assessments, told Inside the Navy November 5, that historically the Navy’s shipbuilding plan cost estimate exceeded the amount of money the Navy would normally be allotted each year in the shipbuilding budget. Over the last 10 years, the amount of money the Navy usually receives for shipbuilding is about $13 billion in FY-15 dollars, he said.
Once Adm. Jonathan Greenert became the chief of naval operations he advocated for the shipbuilding plan to accurately reflect the actual cost, Clark said.
“With the last couple of plans they have been much more accurate in terms of their cost estimate and it has made it very clear the amount the Navy needs to build the fleet that its force structure requirement says it needs to build,” he added.
Senate Armed Services Committee Ranking Member John McCain (R-AZ), who is expected to become the committee’s chairman, has called the president’s FY-15 shipbuilding budget a “fantasy.”
“The department’s long-range shipbuilding program, which we have yet to receive, will depend on proposed investment levels over the next 10 years that will be very difficult to achieve as long as sequestration continues,” he said during a subcommittee hearing in May 2013.
The cost of the Navy’s Ohio-class replacement ballistic missile submarine will crush the shipbuilding budget in the coming years. The service and lawmakers have advocated to fund the program outside the shipbuilding account. Clark said normally this would be “fine” but because of sequestration Congress cannot add money to the budget to pay for the subs.
“What that would mean is the only way to pay for the SSBN(X) outside the shipbuilding budget is something else in DOD has to be cut to the tune of $5 billion,” he said.
The future of the Navy’s small surface combatant is another consideration for the Navy on what to fund. The service recently completed an analysis with its future small surface combatant task force to see what is the best option for the service moving forward.
“How much money that’s available in the budget will sort of dictate what kind of small surface combatant the Navy is going to be able to buy,” Clark said. “That’s why it’s all tied up in the budget and that’s why the budget’s going to have a discussion on what the small surface combatant looks like.”
The FY-16 budget will most likely include design money and begin the requirements process for the Navy’s future small surface combatant, he added.
Sen. Thad Cochran (R-MS), ranking member on the Senate Appropriations defense subcommittee, will likely become chairman because of the GOP win. Clark said the shipyard in Pascagoula, MS, already has support in Congress but if Cochran becomes chairman it will only reinforce that support.
“The current defense authorization act and the current appropriation bill that has been floating around in draft, adds an amphibious ship, an LPD-17 . . . that’s to help out Pascagoula and keep their manpower gainfully employed,” Clark said.
Further, The Shipbuilders Council of America told ITN in a written statement from Matt Paxton, council president, that it looks forward to working with the new leaders in Congress to ensure robust shipbuilding budgets.
“While we understand the fiscal challenges facing our nation, we know America’s leaders are focused on ensuring our naval forces remain strong — both now and into the future,” he wrote.