Preserving shipbuilding would take priority if the Navy must take further budget cuts due to sequestration, Secretary Ray Mabus March 4 told the Senate Appropriations Committee Defense panel (SAC-D).
“In any budget decisions, shipbuilding is protected until the last dog dies,” Mabus said during the hearing.
SAC Chairman Thad Cochran (R-Miss.) noted the Navy’s $161 billion budget request is $11 billion higher than the current level of funding, plus there’s another $7 billion in Overseas Contingency Operations funds.
However, Cochran didn’t mention his counterpart on the House Appropriations Committee in late February told Navy and Air Force leadership his committee plans to enforce the restrictions imposed by the Budget Control Act.
Mabus told SAC-D he was committed “to the maximum extent possible, to preserve ship construction and to seek reductions in ever other area first” if sequestration returns.
The value of forward presence is that, “We have been where it matters when it matters,” said Chief of Naval Operations Adm. Johnathon Greenert during his last posture hearing before SAC-D before he retires later this year. The FY ’16 president’s budget is the “absolute minimum” funding to execute the strategic guidance.
Mabus said shipbuilding cuts are simply not reversible. Building ships is a long term and complex endeavor. “If you miss a year building a Navy ship, you can never make it up.”
He told Sen. Richard Shelby (R-Ala.) that protecting shipbuilding for a properly sized fleet also could cause and exacerbate problems elsewhere.
“Other things begin to break,” such as reduced readiness, reduced surge capacity and longer deployments.
The fleet is stretched. In the early 1990s, there was a fleet of about 400 ships, with 100 ships forward deployed at any one time, he said. Today, a fleet of 280 ships still has 100 ships forward deployed.
Greenert told the panel sequestration in fiscal year 2013 led to a $9 billion shortfall that impacted readiness particularly in maintenance, fleet response capacity and excessive deployments. Decisions made then led to more than $4 billion in carryover bills in fiscal ’14 and ‘15.
Marine Commandant Gen. Joseph Dunford agreed, saying readiness is his priority, but if the Corps is squeezed more, the results would be that people will be killed.
Mabus told Shelby the Navy continues to support the two-shipyard plan for building the two variants of the Littoral Combat Ship (LCS)–the Independence class built by Lockheed Martin [LMT] and the Freedom class built by Austal USA.
This 50-50-split between the two shipyards keeps competition in the program and offers common training for sailors, he said. This continues through 2019.
The industrial base is important, and multi-year contracts are valuable for shipbuilders because a multiyear contract offers stability and predictability, allowing shipyards to buy materials in economic quantities, smooth their workload and conduct necessary training and infrastructure activities.
For example, under a multiyear contract, the sea service will essentially be able to get 10 Virginia class subs for the price of nine.
Mabus also warned that there would be problems with the Ohio-class replacement submarines in terms of technology and how subs are built because no matter how much costs are driven down, they have to be paid for. That means either as a national program, or and with an increase to the shipbuilding accounts.
Sen. Jack Reed (D-R.I.) pointed to the National Sea-Based Deterrence Fund, created to help defray the cost of the nuclear triad, including the planned 12 Ohio-class replacements. He said he hoped the committee would provide money through this fund to help build the subs.
Mabus warned that if sequestration occurs, multiyear contracts could be broken. “If you do, the ironic and awful result is you get fewer ships for more money.”
Greenert said without increased shipbuilding funds in FY ’21 and beyond, Ohio replacement funds “will consume the majority of the Navy’s annual shipbuilding budget and degrade other shipbuilding programs.”
The president’s budget provides the “absolute minimum” funding to execute the defense strategic guidance, Greenert said. If sequestration is implemented in FY ’16, it will damage our national security.”
To meet the national security strategy, “we have to have those gray hulls on the horizon,” Mabus said.