As the fiscal year 2003 defense budget proposal soared above one-third of a trillion dollars in the aftermath of I September, you could hear the disbelief rising on Capitol Hill. Only .. five ... new ... ships?
"I would hope that someone in your capacity would step forward, Secretary England, and say, 'After a $66 billion increase to the defense budget, it is inexcusable that we have the smallest fleet since the Great Depression,"' Representative Gene Taylor (D-MS) exhorted Secretary of the Navy Gordon England at a 13 February hearing of the House Armed Services Committee. "Who's going to say it? Because if we do it, then the press jumps on us and says, 'It's just pork.' It's got to start from within the service."
England declined. Instead, the former aerospace engineer explained patiently—as he did again and again in the face of rising congressional ire—why the Navy's $108-billion spending plan, which contained almost $10 billion more than anticipated, fell so short of the eight to ten warships needed to sustain the fleet's long-term size.
"We have $9.5 billion of new money in the Navy; $4 billion went to personnel accounts, $3 billion went to O&M [operations and maintenance] accounts, $1.5 billion went to R&D [research and development], and $1 billion went to procurement—and that went to munitions," England told lawmakers.
Most important, he said, billions of procurement dollars would go to erase long-standing maintenance backlogs and to finish paying for ships that had long since joined the fleet. Fiscal year 2003 would be a year for putting the naval house in order and laying a solid financial foundation for increased procurement in the years ahead.
The elected officials, especially the ones whose constituents build warships and naval aircraft, were less than convinced. After the events of the past 12 months, they were understandably nervous.
A Slow Start
Flash back to May 2001. President George W. Bush already had flouted expectations. Ignoring pleas from lawmakers with military installations and defense-related firms in their districts, President Bush declined to push for a quick injection of defense spending.
Instead, he delayed the presentation of the fiscal 2002 budget proposal, customarily scheduled for early February. He ordered Secretary of Defense Donald Rumsfeld—a former naval aviator and a supporter of military transformation—to take a hard look at the Pentagon and figure out what U.S. forces really needed to fight tomorrow's wars.
Rumors flew as Secretary Rumsfeld's reviewers went secretly about their tasks, and as the review dragged on, congressional opposition coalesced around each leaked hint of change—especially the notion that the 21st-century Navy might be able to get by with fewer than a dozen aircraft carriers.
By mid-summer, Secretary Rumsfeld found himself under attack by lawmakers and uniformed officials who had been cut out of the review process. Newspapers speculated that the Secretary might become the first Cabinet member to be fired by the new administration.
Meanwhile, the congressional appetite for more defense spending waned. A slowing economy and President Bush's massive tax cut wiped out the prospects of federal budget surpluses. The defection of Vermont Senator Jim Jeffords from the Republican Party threw control of the Senate Armed Services Committee from staunch shipbuilding advocate Senator John Warner (R-VA) to transformation-friendly Senator Carl Levin (D-MI), and raised questions about the Senate's support for presidential priorities.
As lawmakers fiercely debated President Bush's belated request for a $5.5 billion supplemental appropriation to the fiscal year 2001 budget, admirals fanned out across Capitol Hill, looking for money to tide them over until fiscal year 2002. On 26 June, Vice Chief of Naval Operations
Admiral William Fallon reminded a House Armed Services Committee panel that the fleet has shrunk by one-third in a decade but is handling more crises than ever.
"Frankly, we are facing some severe fiscal challenges in this fiscal year of 2001. If we don't get the supplemental very quickly, we are going to start doing some serious damage to our force," Admiral Fallon said. "The forward commanders are holding their breath, hoping this is all going to work out." (It did. On 24 July, President Bush signed the supplement into law.)
The Bush administration finally submitted its first defense budget on 27 June, a rough draft that lacked much of the customary detail about five-year prospects. The $328-billion proposal for fiscal year 2002, the fiscal year beginning 1 October 2001, was 10% larger than its predecessor. The Navy's slice came to $99 billion—up $5.1 billion from the previous year—but with a shipbuilding line that contained money for just six ships.
When budget hearings kicked off in July, Representative Taylor was quick to blast Under Secretary of Defense for Acquisition, Technology, and Logistics Edward "Pete" Aldridge.
"It is absolutely insane that this nation is neither taking the steps to complete the DD-21 or to buy an adequate number of surface ships and submarines to protect our nation," Taylor said on 12 July.
But Representative John Spratt (D-SC) wondered whether even the proposed increase was warranted. "Here we are on the eve of a markup for the biggest increase in defense in ten years. We have no justification data. We have no backup or explanation for things like this that have enormous consequences for us. And I really think we are pushing the envelope," Spratt said.
The Day the World Changed
Resistance evaporated with the terrorist attacks on the World Trade Center and the Pentagon. Representative Norman Dicks (D-WA) spoke for many lawmakers in saying that preserving the nation's budgetary surplus must take a backseat to fighting terror. Harry Stonecipher, vice chairman of aerospace giant Boeing, spoke for many defense contractors in anticipating a wartime windfall.
Before the attacks, Stonecipher said, the military faced hard choices. But he added that in their aftermath, "the purse is now open" and any member of Congress who argues that "we don't have the resources to defend America... won't be there after November of next year."
Indeed, the 2002 defense budget swelled by more than $15 billion in the weeks after 11 September. In December, Congress passed a $343 billion defense authorization bill for fiscal year 2002, and President Bush signed it on 10 January.
Still, the transformation question lived on: Would the 2003 budget, due out in just weeks, feature new ideas or business as usual? The DD-21 Land Attack Destroyer program already had taken a body blow in late summer. Congress docked development funding after Secretary Rumsfeld's team dismissed the warship as "insufficiently transformational." Over several months, the Navy revamped the program, firmed up plans to spread its technologies among several kinds of warships, and renamed it DD(X).
Representative Jerry Lewis (R-CA) later took credit for the program's evolution. "We pushed them to bring about change," the Appropriations Committee member said, noting that the demise of the DD-21 "wasn't an idea that came from the Navy."
In this uncertain atmosphere, a group of representatives banded together in January 2002 to launch the Navy-Marine Corps Caucus, a loose affiliation of lawmakers who sought increased funding to build and maintain ships and aircraft, and better pay and benefits for service members. The Army and Air Force already had similar support groups, cofounders Ed Schrock (R-VA) and Susan A. Davis (D-CA) pointed out.
But as Secretary Rumsfeld's fiscal year 2003 budget proposal began to take final shape just after the new year, it became clear that the fight for substantial change already was over.
"The general picture is that the Office of the Secretary of Defense just doesn't have political horses or doesn't have the focus to make the services change," said Loren Thompson, a defense analyst at the Lexington Institute in Arlington, Virginia. "Basically, the services are proceeding on the path they set out during the Clinton administration."
Still, as naval-oriented lawmakers gleaned the details of the new, beefed-up Navy spending plan, many recoiled in shock. The 2003 budget, they began to learn, contained enough money to buy only five new ships.
Senator Warner fired off a late-January warning shot in a letter to Secretary England and Chief of Naval Operations Admiral Vernon Clark. The huge budget presented an opportunity "to correct the steadily declining number of ships in the naval fleet. With this budget, we must ensure that the decline has bottomed out and that we turn the curve back up," he wrote.
The 2003 Budget
On 4 February, the White House formally submitted its fiscal year 2003 budget to Congress. If enacted, the $379 billion spending plan would represent an inflation-adjusted 20% growth over three years, the largest since the 32% rise of the early 1980s, calculated Steven Kosiak, a defense budget analyst for the nonpartisan Center for Strategic and Budgetary Assessments.
The Navy's portion came to $108.3 billion, $9.4 billion more than the 2002 budget signed three weeks earlier. The proposal forecast naval spending to hit $134 billion in 2007, a five-year total that provided $85 billion more than proposed by pre-11 September budget plans.
But while fiscal year 2002 contained money for six new ships worth $9.3 billion, the 2003 spending plan envisioned spending just $8.6 billion for five: two Arleigh Burke (DDG-51)-class guided-missile destroyers, one Virginia (SSN-774)class nuclear-powered attack submarine, one San Antonio (LPD-17)-class amphibious transport dock, and a T-AKE advanced auxiliary cargo ship. Two ballistic-missile submarines were saved from decommissioning by approval of a plan to turn them into cruise missile launchers, dubbed SSGNs. The shipbuilding budget also included money to overhaul and refuel one Los Angeles (SSN-688)-class nuclear-powered attack submarine.
The Navy's budget proposal included $244 million for a third installment of advance procurement of the CVNX-1 aircraft carrier, but also delayed by a year its planned 2006 start. The carrier—to be equipped with an all-new-design nuclear power plant and built in the yards of Northrop Grumman's Newport News Shipbuilding in Virginia—is the first of the class that eventually will replace the Nimitz (CVN-68)-class warships.
The renamed DD(X) program saw funding rise to $960 million, up from $530 million in 2002. Over the next five years, the plan projected a total of $6.7 billion for the program, including the construction of the first ship in 2005. Secretary England lauded the program to House lawmakers on 14 February, calling it "the most important thing I believe the Navy's done in the last year."
The Navy's five-year plan predicted the purchase of another 5 ships in 2004, 7 in 2005, 7 in 2006, and 11 in 2007. This faraway return to steady-state levels reassured few. No one, as one politician put it, has ever lived in an out-year.
Naval aviation came scarcely closer to procurement goals, though Secretary England and Admiral Clark both declared fixed-wing, rotor, and tilt-rotor purchases their main priority in a year in which the average age of the fleet's airplanes and helicopters hit a record-high 18 years.
The fiscal year 2003 budget plan proposed the purchase of 83 aircraft, down from 90 in fiscal year 2002. The list included 44 F/A-18E/F Super Hornets, five E-2C Hawkeyes, 11 V-22 Ospreys, 15 MH-60S helicopters, and 8 T-45TS jet trainers. As with ships, the five-year plan did not forecast meeting steady-state numbers-Navy officials put the target at between 180 and 210 aircraft-until 2007. Annual purchases were planned to rise from 85 in 2004 to 105 in 2005, 147 in 2006, and 193 in 2007.
Filling Backlog Buckets
With both ship and aircraft purchase rates well below steady-state levels, lawmakers from defense-minded districts prepared for battle.
Secretary Rumsfeld led off the defense of the Bush administration budget, telling the Senate Armed Services Committee on 5 February that Navy brass, not political appointees, had set the shipbuilding rates for the next few years. The problem of the declining fleet was not as urgent as portrayed by Congress, Secretary Rumsfeld said. The fleet's warships, generally built to last more than 30 years, were averaging around 16 years of age.
Therefore, he explained, Secretary England, Admiral Clark, and Marine Corps Commandant General James L. Jones chose to limit new ship purchases and put post-11 September funding additions toward operations, maintenance, and prior-year shipbuilding bills: "a matter of tough, tough choices . . . in the Department of the Navy," he said.
A week later, Secretary Rumsfeld pushed off criticism at a 14 February hearing by the House Appropriations Committee's defense subcommittee.
"We're not buying what we need to buy . .. we'll be down to 250 [ships in the force] in a few years," said ranking member Representative John Murtha (D-PA).
"No ... not in a few years, not in a lot of years," Secretary Rumsfeld shot back. The plans to ramp up construction will get the fleet back on track before existing ships age into retirement, he said.
Secretary England offered a similar argument to Weldon and the House Armed Services Committee on 13 February. The Navy's practice of paying for ships over several years was causing the price tag to balloon, he said. The Navy's 2003 request alone contained $547 million for prior-year ships: $229 million for the attack submarine, $126 million for the DDG-51, and $192 million for the LPD-17.
Besides, the Navy had for years been shorted spare parts and other immediate needs. At its bottom, the 2003 budget was an attempt to redress chronic shortages in operations and maintenance spending, to "fill the backlog buckets," Secretary England said.
Three weeks later, having taken more fire from lawmakers, Secretary England made his case yet again.
"We have heard from people who are saying that we are not putting enough money into shipbuilding and aviation procurement, and I will tell you those accounts are accurate, but we did prioritize, and what we found most important was building the foundation as we go forward," the Navy Secretary said in 6 March testimony to the defense subcommittee of the House Appropriations Committee.
Secretary England sounded the theme again in written testimony to Congress, telling the House Armed Services Committee that the Navy will not want to start building more than one Virginia-class submarine a year until the first ships are tested in the fleet. "Delivery of USS Virginia in 2004 will allow the class design and ship testing to complete before beginning the increased production of two Virginias per year later... We are not ready for rate acceleration this year." (In late February, Senator Jack Reed (D-RI), of the Senate Armed Services Committee, and Representative Rob Simmons (R-CT), whose constituents include thousands of workers from the Electric Boat shipyard owned by General Dynamics Corporation, called for upping construction rates to two subs a year.)
Weldon, who became chair of the House Armed Services Committee's Military Procurement Subcommittee in August 2001 after the death of Representative Floyd Spence (R-SC), saw White House gamesmanship at work. The administration, he said at a February hearing of the subcommittee, is "banking on Congress" to boost shipbuilding and aircraft accounts. "I think that's wrong."
Meanwhile, Weldon took the opportunity to push the Osprey tilt-rotor aircraft, built in his Philadelphia-area district. The V-22 is "an outstanding aircraft," Weldon told Secretary Rumsfeld at a 13 February hearing of the House Armed Service Committee.
Lawmakers rose up in opposition to the delay of the CVNX-1 construction. A 19 March letter from the Virginia House delegation asked the House defense committees to add $285 million to the shipbuilding budget to put the carrier back on schedule. The delay, they argue, would boost the total price tag by $400 million because of the disruption to Newport News' labor and supplier networks.
Admiral Clark attempted to fight this idea by using an argument that had been advanced in the last year of President Bill Clinton's administration. In January 2000, then-Secretary of the Navy Richard Danzig said the service would take advantage of what looked then like a strategic pause and build fewer ships while the DD-21 destroyer was designed around a revolutionary electric propulsion plant.
Admiral Clark echoed this logic in 14 February testimony before the House
Armed Services Committee, telling the elected officials he would not support legislation to move the CVNX-1 start back to 2006. The delay, he said, would allow the Navy to put more research into the ship's new technologies.
Still, Admiral Clark admitted freely that the fleet hungered for more shipbuilding money. Spending on construction ought to be $12 billion, about double President Bush's 2003 proposal, while research should be about $10 billion more than the proposed $23 billion, he said in 7 March testimony to the Senate's seapower subcommittee.
The Search for Funds
Few politicians will make obvious attempts to take money away from their colleagues' districts. Amid all of the bluster, few Congress members offered concrete suggestions for places to get shipbuilding money. Senator Thad Cochran (R-MS), a senior member of the Senate Appropriations Committee and the junior senator representing Ingalls Shipbuilding of Pascagoula, Mississippi, was among the lawmakers calling for more ships-in particular, a third destroyer-at an annual shipbuilders' forum held each February on Capitol Hill. "But asked where they would find the money to increase shipbuilding, both senators punted," The Newport News Daily Press reported. "'This is an election year,' Cochran joked. 'I'm trying to agree with everybody on everything.'"
At the 13 February House Armed Services Committee hearing, Representative Tom Allen (D-ME) suggested that the Pentagon trim its $7.8-billion missile-defense budget to buy a third $I- billion guided-missile destroyer. "When you look at what is recognized as the least likely threat to this country of all the external threats we face, it is the threat of an attack on this country by an ICBM. And yet that's where the money is going."
Some lawmakers zeroed in on an unusual feature of President Bush's $379billion budget: a $10-billion "war reserve" allocated to no particular program. "It's just sitting out there, begging to be taken for shipbuilding and [an increase in] end-strength," Representative Ike Skelton (D-MO), ranking member of the House Armed Services Committee, said in a February interview.
On 7 March, two senators from shipbuilding states—Virginia's Warner and Susan Collins (R-ME)—became the first lawmakers to propose publicly a use for the $10 billion Secretary Rumsfeld had earmarked for wartime contingencies. "We cannot continue to defer investment year after year... If we're not reversing the decline in shipbuilding in a year when we're having a $48 billion [overall] increase in defense spending, then when are we going to do it?" Collins asked.
Days later, Weldon led a bipartisan group of House legislators in their own attempt to claim about $1.5 billion of the $10-billion reserve fund for shipbuilding. Some of the money would have gone toward a $285-million effort to put the CVNX back on schedule for a 2006 start.
But a 20 March agreement between House leaders and the White House put the reserve money beyond reach, at least until President Bush offers his own proposal later this year. Outraged, Weldon voted against his party's budget resolution. House leaders also killed an amendment offered by Skelton to buy two additional ships.
Creative Solutions
Still other lawmakers proposed to give the Navy ships that service officials flatly—if somewhat covertly—opposed. In January, Senator Trent Lott (R-MS), leaned on Pentagon Comptroller Dov Zakheim to insert $10 million into the 2003 budget to start the purchase of a ninth LHD amphibious assault ship, a vessel that would be built in Pascagoula and one that Navy officials do not want.
Indeed, service officials are a year into a study of newer, larger warships that could effectively support the larger aircraft—the V-22s and Joint Strike Fighters—that Marine aviators will fly in the not-too-distant future.
"They have asked for $10 million, but by the time we finish up next October, it could be as high as $400 million. On this class of ships, there is a history of congressional meddling, which puts advanced procurement money into the budget, and then we find that we pay for the entire ship costing $1.8 billion the following year," one congressional aide said."
Even more odd was an order by Congress that the Navy "give the highest consideration" to buying two cruise ships ordered by a firm that went bankrupt in October. Inserted in the 2002 defense appropriations bill passed by Congress in December, the passage suggested that the Navy use maritime loan guarantees to purchase the ships, then under construction at Ingalls Shipbuilding, and use them as "mobile deployable assets." The legislation did not name the Northrop Grumman-owned shipyard, the country's only cruiseliner construction facility.
"The conferees recommend that the Navy expeditiously pursue the possibility of capitalizing on [maritime] loan guarantees for up to two multipurpose passenger ships presently under construction in a United States shipyard," the bill said. The Navy sent engineers to the yard, and they are preparing a report, John Young, Assistant Secretary of the Navy for Research, Acquisition, and Development, told lawmakers at a 6 March hearing of the House Appropriations Committee military procurement subcommittee. Representative Taylor pressed the issue. "Could I ... be given the opportunity to visit with them before [they write] the final product?" Taylor asked.
"Absolutely," Young responded.