by Ronald O'Rourke
Specialist in Naval Affairs
Congressional Research Services (CRS)
November 4, 2015
The Navy’s proposed FY2016 budget requests funding for the procurement of nine new battle force ships (i.e., ships that count against the Navy’s goal for achieving and maintaining a fleet of 308 ships). The nine ships include two Virginia-class attack submarines, two DDG-51 class Aegis destroyers, three Littoral Combat Ships (LCSs), one LPD-17 class amphibious ship, and one TAO(X) class oiler. The Navy’s proposed FY2016-FY2020 five-year shipbuilding plan includes a total of 48 ships, compared to a total of 44 ships in the FY2015-FY2019 five-year shipbuilding plan.
The planned size of the Navy, the rate of Navy ship procurement, and the prospective affordability of the Navy’s shipbuilding plans have been matters of concern for the congressional defense committees for the past several years. The Navy’s FY2016 30-year (FY2016-FY2045) shipbuilding plan, like many previous Navy 30-year shipbuilding plans, does not include enough ships to fully support all elements of the Navy’s 308-ship goal over the entire 30-year period. In particular, the Navy projects that the fleet would experience a shortfall in small surface combatants from FY2016 through FY2027, a shortfall in attack submarines from FY2025 through FY2036, and a shortfall in large surface combatants (i.e., cruisers and destroyers) from FY2036 through at least FY2045.
The Navy’s report on its FY2016 30-year shipbuilding plan estimates that the plan would cost an average of about $16.5 billion per year in constant FY2015 dollars to implement, including an average of about $16.9 billion per year during the first 10 years of the plan, an average of about $17.2 billion per year during the middle 10 years of the plan, and an average of about $15.2 billion per year during the final 10 years of the plan.
An October 2015 Congressional Budget Office (CBO) report on the Navy’s FY2015 30-year shipbuilding plan estimates that the plan would require 11.5% more funding to implement than the Navy estimates, including 7.7% more than the Navy estimates during the first 10 years of the plan, 11.6% more than the Navy estimates during the middle 10 years of the plan, and 17.1% more than the Navy estimates during the final 10 years of the plan. Over the years, CBO’s estimates of the cost to implement the Navy’s 30-year shipbuilding plan have generally been higher than the Navy’s estimates. Some of the difference between CBO’s estimates and the Navy’s estimates, particularly in the latter years of the plan, is due to a difference between CBO and the Navy in how to treat inflation in Navy shipbuilding. The program that contributes the most to the difference between the CBO and Navy estimates of the cost of the 30-year plan is a future destroyer that appears in the latter years of the 30-year plan.
Potential issues for Congress in reviewing the Navy’s proposed FY2016 shipbuilding budget, its proposed FY2016-FY2020 five-year shipbuilding plan, and its FY2016 30-year (FY2015-FY2045) shipbuilding plan include the following:
-the potential impact on FY2016 Navy shipbuilding programs of an extended or full-year continuing resolution (CR) for FY2016;
-the potential impact on the size and capability of the Navy of limiting Department of Defense (DOD) spending through FY2021 to the levels set forth in the Budget Control Act (BCA) of 2011, as amended;
-the affordability of the 30-year shipbuilding plan; and the appropriate future size and structure of the Navy in light of budgetary and strategic considerations.
Funding levels and legislative activity on individual Navy shipbuilding programs are tracked in detail in other CRS reports.
