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Is the Price Right for Navy’s Sub Replacement Program?

The Navy is planning to build 12 ballistic missile submarines that are so pricey the service is facing a $60 billion shortfall between 2021 and 2035, yet many of the lawmakers overseeing the Navy appear to have no problem with that.

Despite congressionally mandated automatic cuts in fiscal 2013 that are squeezing operations and maintenance accounts and have prompted civilian furloughs — and facing the prospect of yet another sequester in fiscal 2014 — key oversight lawmakers simply say the extra money must be found.

“The issue is not whether we do the Ohio-class [submarine] replacement program,” said J. Randy Forbes, R-Va., chairman of the House Armed Services Subcommittee on Seapower and Projection Forces. “The question is do we take it out of the hide of every other program [in the shipbuilding plan] or see it as a strategic asset and take it out of the Pentagon’s overall budget.”

Despite all the pressure to slash government spending across the board, the military services are continuing to put forward their wish lists, and defense-focused lawmakers say Congress needs to follow through.

“You have a Navy living in a parallel universe hoping declining budgets go away and you also have a Navy in a budgetary war … between the Army, Navy, Air Force and Marines for projected out-year resources,” said Gordon Adams, a defense budget expert at the Stimson Center, a nonpartisan think tank in Washington. “And they are talking to people who don’t do budgets — because they are talking to the Armed Services Committee. They don’t do budgets, they are advocates for their part of the DOD universe.”

Like a game of musical chairs, one senior congressional aide said, the Navy is betting that when the music stops, it will have a chair and one of the other services won’t.

But the Defense Department’s overall funding picture remains uncertain on Capitol Hill. Facing the possibility of a continuing resolution at the start of fiscal 2014, which would lock in funding at the prior year’s levels, Navy planners would have to find additional funds from other research-and-development accounts to keep the Ohio-class replacement submarine program on track. The Navy had planned to about double its research-and-development funding for the program in fiscal 2014, military officials said.

Acute Funding Shortfall

The Navy’s funding shortfall — almost two-thirds of the entire acquisition cost of the submarine program — brings into stark contrast two of its core strategic goals: fielding a fleet of at least 306 warships and recapitalizing its nuclear deterrent fleet with the $93 billion Ohio-class replacement program.

The price tag is so high on the subs — an estimated $5.4 billion per vessel after the first one — that building them could crowd out funding for other ships the Navy is counting on to reach its overall fleet size target.

“We pit two equally important strategic instruments of power against each other, which is just, you know, an inappropriate friction,” Rear Adm. Richard P. Breckenridge, the director of the Navy’s Undersea Warfare Division, told the Seapower panel last week.

To emphasize the stakes involved, he told the pro-Navy panel that if the sea service received only half of the $60 billion shortfall, or roughly $2 billion extra annually over a 15-year period, it “would be required to cut from our other general purpose forces, four attack submarines, four large surface combatants … and another eight combatants.”

If the Navy received no supplemental funding, 32 warships would fall out of its inventory.

Under the Navy’s current 30-year shipbuilding plan, it would take more than two decades to reach its goal of 306 ships; it’s aiming to have 282 ships in fiscal 2014.

The service receives about $13 billion a year for shipbuilding — well short of what is needed to reach the Navy’s goal, according to Forbes and other experts.

This problem grows acute around 2021, when the Navy expects to begin producing the Ohio-class ballistic missile submarine replacement, a vessel the Navy had hoped to pay about $4.9 billion each for in fiscal 2010 dollars, after the first of its class is built. Right now, the Navy projects the actual cost of those boats to be about $500 million more than that.

The Navy is able to persuade authorizers of the need because ballistic missile submarines represent about 70 percent of the nation’s nuclear weapons deterrent. They are also the most survivable — some say invulnerable — leg of the nuclear weapons triad, which also includes ground-based and air-launched nuclear weapons.

“But, $60 billion in the grand scheme of the Department of Defense budget represents less than 1 percent,” Breckenridge said. “So what we’re looking at is, do we have the will as a nation to be able to identify less than 1 percent of the budget, to go ahead and commit it to this 15-year recapitalization commitment without having an adverse impact on the rest of our general shipbuilding force?”

Strong Navy Support

Rhode Island Democrat Jim Langevin, a member of the Seapower panel and in whose state General Dynamics Electric Boat has a location, said he is untroubled by the Navy’s plans. In fact, he acknowledged that the panel writ large is sympathetic to the Navy’s case.

“It’s the Navy’s job to tell the nation, to tell the leadership of the country, from the president to Congress, what the nation’s military needs are and it’s up to the Congress to come up with the funding,” he said.

Langevin said that over the next 10 years, he hopes Congress will have put its fiscal house in order and invested wisely to help create jobs and tax revenue to put the economy and the military in a better financial position.

Langevin said, however, that while the military would grow leaner over the next 10 years, the Navy should be shielded from severe cuts.

Further, he argued that because the Ohio-class replacement program is a strategic asset, like sealift and ballistic missile defenses, it should be removed from the shipbuilding budget and funded through the Pentagon separately.

But Adams said the Navy will have a tougher time selling its plans to appropriators and other lawmakers.

“How many [ballistic missile submarines] do you need in a post-nuclear era with incredible superiority?” Adams said. “It’s almost not worth discussing the merits because this is budgetary hand-to-hand combat. Everybody is pitching the best they can to win the Pentagon budget wars. The rubber hits the road right now.”

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