[House Hearing, 111 Congress]
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                         [H.A.S.C. No. 111-117]

 
                 ISSUES AFFECTING NAVAL FORCE STRUCTURE

                               __________

                                HEARING

                               BEFORE THE

             SEAPOWER AND EXPEDITIONARY FORCES SUBCOMMITTEE

                                 OF THE

                      COMMITTEE ON ARMED SERVICES

                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             SECOND SESSION

                               __________

                              HEARING HELD

                            JANUARY 20, 2010

                                     
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             SEAPOWER AND EXPEDITIONARY FORCES SUBCOMMITTEE

                   GENE TAYLOR, Mississippi, Chairman
SOLOMON P. ORTIZ, Texas              W. TODD AKIN, Missouri
JAMES R. LANGEVIN, Rhode Island      ROB WITTMAN, Virginia
RICK LARSEN, Washington              ROSCOE G. BARTLETT, Maryland
BRAD ELLSWORTH, Indiana              J. RANDY FORBES, Virginia
JOE COURTNEY, Connecticut            DUNCAN HUNTER, California
JOE SESTAK, Pennsylvania             MIKE COFFMAN, Colorado
GLENN NYE, Virginia                  THOMAS J. ROONEY, Florida
CHELLIE PINGREE, Maine
ERIC J.J. MASSA, New York
                  Will Ebbs, Professional Staff Member
               Jenness Simler, Professional Staff Member
                  Elizabeth Drummond, Staff Assistant


                            C O N T E N T S

                              ----------                              

                     CHRONOLOGICAL LIST OF HEARINGS
                                  2010

                                                                   Page

Hearing:

Wednesday, January 20, 2010, Issues Affecting Naval Force 
  Structure......................................................     1

Appendix:

Wednesday, January 20, 2010......................................    39
                              ----------                              

                      WEDNESDAY, JANUARY 20, 2010
                 ISSUES AFFECTING NAVAL FORCE STRUCTURE
              STATEMENTS PRESENTED BY MEMBERS OF CONGRESS

Akin, Hon. W. Todd, a Representative from Missouri, Ranking 
  Member, Seapower and Expeditionary Forces Subcommittee.........     4
Taylor, Hon. Gene, a Representative from Mississippi, Chairman, 
  Seapower and Expeditionary Forces Subcommittee.................     1

                               WITNESSES

Labs, Dr. Eric J., Senior Analyst, Congressional Budget Office...     5
O'Rourke, Ronald, Specialist in Naval Affairs, Congressional 
  Research Service...............................................     8
Thompson, Dr. Loren B., Chief Operating Officer, Lexington 
  Institute......................................................    10

                                APPENDIX

Prepared Statements:

    Akin, Hon. W. Todd...........................................    48
    Labs, Dr. Eric J.............................................    49
    O'Rourke, Ronald.............................................    67
    Taylor, Hon. Gene............................................    43
    Thompson, Dr. Loren B........................................    89

Documents Submitted for the Record:

    [There were no Documents submitted.]

Witness Responses to Questions Asked During the Hearing:

    [There were no Questions submitted during the hearing.]

Questions Submitted by Members Post Hearing:

    [There were no Questions submitted post hearing.]
                 ISSUES AFFECTING NAVAL FORCE STRUCTURE

                              ----------                              

                  House of Representatives,
                       Committee on Armed Services,
            Seapower and Expeditionary Forces Subcommittee,
                       Washington, DC, Wednesday, January 20, 2010.
    The subcommittee met, pursuant to call, at 3:05 p.m., in 
room HVC-210, Capitol Visitor Center, Hon. Gene Taylor 
(chairman of the subcommittee) presiding.

 OPENING STATEMENT OF HON. GENE TAYLOR, A REPRESENTATIVE FROM 
   MISSISSIPPI, CHAIRMAN, SEAPOWER AND EXPEDITIONARY FORCES 
                          SUBCOMMITTEE

    Mr. Taylor. Good afternoon and welcome to the first of many 
hearings which this subcommittee will undertake on issues 
affecting the United States Navy and Marine Corps. Today's 
hearing is in advance of a budget submission which is due to 
arrive to Congress on the first of February. This is the reason 
that we are meeting prior to that day.
    I do not intend for this subcommittee to be a rubber stamp 
to the Department's request, no matter which political party 
occupies the White House. As long as I have the great privilege 
to serve as the chairman of this subcommittee, it is my 
intention to ensure that the American people have the right to 
witness the issues debated in open session and work with all 
members of this subcommittee to recommend an authorization that 
ensures our Navy and Marine Corps have the ships, aircraft and 
other equipment that they need to do the job that our Nation 
asks them to do.
    Today is just the first day of a process of arriving at 
those recommendations. I felt that it is important to start the 
legislative session with an examination of alternatives to 
restore our Navy's fleet to the numbers necessary to meet our 
national security needs. To that end, I have requested our 
witnesses discuss a wide range of issues affecting the Navy 
force structure particularly in light of the President's 
decision in October that the Navy play a much larger role in 
theater missile defense.
    I want to state for the record I support the decision to 
put our Nation's theater missile defense on ships. Having had 
the good fortune to serve here for 20 years, I have witnessed, 
sometimes in horror, as our Nation has been asked by a number 
of allies to leave, the billions of dollars of infrastructure 
we left behind in Panama, the billions of dollars of 
infrastructure we left behind in the Philippines. When the 
Puerto Rican people asked us to quit using the island of 
Vieques as a practice range, the Navy made the decision to shut 
down Roosevelt Roads. And as we speak, we are in the process of 
leaving Okinawa. In every instance we are basically one 
election cycle away from a key ally asking us to leave billions 
of dollars' worth of things behind. And if we were to put the 
national missile defense in Eastern Europe, the same thing 
could happen there.
    If we put it on a ship, we are then off the coast of any 
potential foe. We don't have to ask a host country for 
permission to use our national missile defense; but most of 
all, that we are able to move that position around as it is 
needed around the world, and I think it is the way to go.
    What I don't see is the Administration telling us where 
those ships are going to come from. And I would remind this 
committee, particularly those of you who have been around for a 
while, the rule of three that we have all learned; that for 
every troop we have deployed, we have one in theater, one on 
the way to the theater, one returning from theater who is 
training to do his original job. In the case of ships, it is 
probably going to be a 4-to-1 ratio. So in order to have 24-
hour coverage every day of the year off a potential foe, that 
means we are going to have to have four Navy ships prepared to 
do that job.
    I think it is important that we say this now before the 
budget submission because, again, I am in support of the 
President's request to put these things on ships, but I want 
the President to make the request for those ships. Let us don't 
pretend it is going to happen later. Let us don't pretend it is 
going to happen overnight. From the day we order that ship, it 
is probably at least three years to delivery for the first, so 
we need to get started now.
    I don't think our Navy is large enough to do the job they 
are asked to do, but numbers alone are not the answer. Which 
type of ship and what number is more important than just 
quantity. Certainly I don't think we match up well in either 
the total number of ships or the types of ships.
    There are some would say we don't need our amphibious 
forces. I would remind you that as we speak, one of those big-
deck amphibs is off in Haiti helping those people, and in the 
case of south Mississippi, one of the big-deck amphibs came to 
our rescue after Hurricane Katrina. Moving from the sea is the 
only guaranteed access that we can count on, and I think we 
need more, not fewer, amphibious assault ships.
    There are those who say we don't need 11 aircraft carriers. 
Again, I disagree. Those battle groups have done more to 
maintain the peace in the world for the past 60 years than any 
other force we maintain.
    I am convinced that we do not have enough fast-attack 
submarines. These boats kept the Soviet Navy in check during 
the entire Cold War, and they will keep any other adversary in 
check as we proceed into this century.
    I am also convinced we don't have enough surface 
combatants. The evidence is everywhere. We have carriers 
operating without escort, amphibious assault ships transiting 
the Strait of Hormuz without any antisubmarine warfare-capable 
ship in company because the escort is off chasing pirates or 
guarding oil platforms.
    We have a looming need to replace the capability of the 
Ohio class of strategic missile submarines, but doing so may 
cripple the Navy budget in the later part of the decade.
    In addition to the hard facts of types of ships and numbers 
of ships are also matters that need to be debated. The Congress 
was perfectly clear in the fiscal year 2008 National Defense 
Authorization Act that the next generation of cruiser has a 
nuclear power system for electrical power generation and 
propulsion. This action was based on a bipartisan support on a 
clear and present threat that the access to fuel could be 
restricted and leave the fleet without the ability to conduct 
major operations.
    I would remind the Members that a typical surface combatant 
uses about 10 million gallons of fuel per ship per year, a 
large-deck amphib about the same. And I think any clever foe is 
going to take advantage of our vulnerability to the fleet 
oilers, that the first ship that they attack is the oiler, and 
if the oiler doesn't sail, the escorts don't sail. If the 
escorts don't sail, the carrier doesn't sail.
    And I would hope that we have learned the hard way in 
places like Iraq and Afghanistan that every enemy, no matter 
how sophisticated or unsophisticated, is smart enough to 
exploit our weaknesses. This is a weakness that we can and have 
already directed the Navy to address. And I regret to say that 
that was two years ago. The Navy has done absolutely nothing in 
pursuit of the nuclear cruiser to date.
    My last major concern is the Ohio submarine replacement. I 
expect to have a stand-alone-only hearing on this issue due to 
the significant importance to national security. And I want to 
make sure that we have identified the right ship and the right 
missile before we make a 40-year commitment to the program.
    Again, does it make more sense to build a ship to fit our 
existing D-6 missiles, or does it make more sense to build a 
missile that will fit a Virginia-class submarine? Since this is 
something that is going to be a decision that will affect the 
United States Navy for decades to come, we have to get it right 
the first time.
    These are all hard problems to tackle, and I look forward 
to open debate with my colleagues in the coming weeks and 
months. I am always open to suggestions from the members of 
this subcommittee for hearing topics and look forward to your 
input.
    Today we have three very distinguished experts in Navy 
acquisition and policy. Dr. Eric Labs is a senior analyst for 
the Congressional Budget Office. His independent cost analysis 
of ship construction has proven very helpful to this committee 
over the years.
    Mr. Ronald O'Rourke is the senior research analyst at the 
Congressional Research Service and routinely provides the 
Congress with in-depth and well-researched papers on 
capability, cost and options for future procurement.
    Dr. Loren Thompson is the president and chief operating 
officer of the Lexington Institute. Dr. Thompson has appeared 
before this committee before, and his insight is always 
helpful.
    For disclosure, the United States Navy was invited to send 
representatives to testify. Secretary Mabus has agreed to do so 
with the stipulation that the witnesses would not discuss the 
upcoming budget submission. Subsequently, my understanding is 
that Secretary Gates denied the Navy permission to testify. 
While I think we would have had a better hearing with them, I 
am satisfied that our panel today will have a frank and open 
discussion on the best way to rebuild our fleet.
    I would like to call on the gentleman from Missouri, my 
friend and partner on the subcommittee, the Honorable Todd 
Akin.
    [The prepared statement of Mr. Taylor can be found in the 
Appendix on page 43.]

STATEMENT OF HON. W. TODD AKIN, A REPRESENTATIVE FROM MISSOURI, 
 RANKING MEMBER, SEAPOWER AND EXPEDITIONARY FORCES SUBCOMMITTEE

    Mr. Akin. Thank you, Mr. Chairman, and welcome to our 
witnesses. We appreciate your willingness to appear before us 
today. I hope this will be a useful springboard for this 
subcommittee as we prepare to consider the President's fiscal 
year 2011 shipbuilding budget request and the results of the 
Quadrennial Defense Review (QDR).
    Today's hearing gives us the opportunity to frame the 
various issues our subcommittees must consider depending on a 
number of alternative shipbuilding plans that could emerge 
shortly. I hope our Members will use this hearing as a 
foundation for the rigorous oversight and decision-making that 
will be required in the coming weeks. I imagine that our 
witnesses have been somewhat challenged in preparing your 
testimony today, for we will all continue to rely on press 
accounts and rumor as we wait for the first Monday in February.
    In spite of the lack of new information, your preliminary 
insights are valuable. I, for one, have been troubled by 
certain reports such as those indicating the Navy may attempt 
to eliminate as many as two carrier strike groups. Likewise, 
indications that the Navy may not ramp production of the 
Virginia-class submarine to a sustained rate of two per year 
starting in fiscal year 2011 raised concerns about our ability 
to meet combatant commander requirements for submarine 
presence, and may have second- or third-order effects on the 
total cost of shipbuilding.
    There have also been stories in the media about pressures 
on amphibious lift. In fact, the Commandant recently alluded to 
the stress placed on the amphibious fleet in all scenarios 
evaluated during the QDR. We need to ensure that the Navy and 
the Marine Corps have both the quality and capability in our 
battle force ships to maintain our maritime strategy, deter and 
win any future conflict in which the United States may be 
involved.
    On the other hand, some of these concerns may be premature. 
There have also been press accounts indicating that the next 
shipbuilding plan will establish a 324-ship requirement that 
would maintain the current minimum requirement for 11 carriers, 
48 attack submarines, and 33 amphibious ships. Nevertheless, I 
was interested to note in your prepared testimony several items 
worth further consideration by this subcommittee.
    For example, Mr. O'Rourke, you indicated that should the 
Navy be forced to pay for the Ohio-class replacement program 
within its current top line, it could result in significant 
reductions in other shipbuilding programs. This is no great 
surprise. But you also note that such reductions could result 
in a substantial consolidation of the surface ship construction 
industrial base.
    Furthermore, Dr. Labs, in your testimony, you point out 
that sea ballistic missile defense could require substantial 
commitment of resources. That could make it difficult for the 
Navy to fund other ship programs.
    Therefore, whether or not the QDR and the upcoming long-
term shipbuilding plans substantially alter the requirements 
for certain key platforms, the Navy and this committee will 
have a number of difficult choices to make in the near term.
    I thank the Chairman for holding this hearing today so 
early in the year to allow us to properly understand these 
issues. Thanks again to our witnesses. I look forward to your 
testimony.
    And thank you, Mr. Chairman.
    Mr. Taylor. Thank you, Mr. Akin.
    [The prepared statement of Mr. Akin can be found in the 
Appendix on page 48.]
    Mr. Taylor. And the Chair wants to correct himself. It is a 
D-5 missile, not a D-6.
    Other members of the subcommittee are invited to submit a 
statement for the record if they so choose. Without objection, 
Members will have five legislative days to submit any written 
statement.
    Gentlemen, it is the norm for this committee for our 
witnesses to speak for about five minutes. I think given the 
gravity of the subject matter, and most of all given your 
expertise, we are going to give you significant leeway on that. 
We have cast all of our votes for the day, so if you could keep 
it to about 10 minutes so that Members have an opportunity to 
ask their questions.
    Dr. Labs, if you would, please.

 STATEMENT OF DR. ERIC J. LABS, SENIOR ANALYST, CONGRESSIONAL 
                         BUDGET OFFICE

    Dr. Labs. Thank you. Mr. Chairman, Congressman Akin and 
members of the subcommittee, I appreciate the opportunity to 
appear before you today to discuss the challenges that the Navy 
is facing in its shipbuilding plan.
    The subcommittee asked the Congressional Budget Office to 
examine three matters: the Navy's draft shipbuilding plan for 
fiscal year 2011, the effect that replacing the Ohio-class 
ballistic missile submarines with a new class of submarines 
will have on the Navy shipbuilding program, and the number of 
ships needed to support ballistic missile defense from the sea.
    I would therefore like to make the following five points. 
If the Navy receives the same amount of money for ship 
construction in the next 30 years that it has over the past 
three decades, about $15 billion per year, it will not be able 
to afford its 313-ship fleet.
    Two, the Navy's draft 2011 shipbuilding plan as reported in 
the press increases the Navy's stated requirement for its fleet 
from 313 ships to 324, but the production schedule in the plan 
by only 222 ships, or 74 fewer than the Navy's previous plan. 
Critically, most of the reductions would come from the Navy's 
combat ships.
    Three, Congressional Budget Office (CBO) estimates the plan 
would cost an average of $20 billion per year. I stress that 
this is a preliminary estimate only, which we will revise when 
the Navy formally submits its shipbuilding plan next month.
    Four, building a new class of ballistic missile submarines 
could cost about $85 billion. If the Navy received that amount 
in addition to the resources needed to execute the draft 2011 
plan, it could probably purchase the 56 additional ships 
identified in the alternative construction plan that 
accompanied the draft 2011 plan.
    Five, if the Navy needs to dedicate ships to maintain a 
continuous patrol for ballistic missile defense, then as many 
as five to six ships per station would be needed. If the Navy 
employs rotational crewing on Ballistic Missile Defense (BMD) 
ships or bases them in the European theater, then it could make 
do with fewer ships.
    In a report to this subcommittee in 2008, CBO estimated 
that carrying out the Navy's 2009 shipbuilding plan to purchase 
296 ships over 30 years would cost an average of almost $27 
billion a year. Yet senior Navy officials have said in recent 
months that the service expects to make do with $13- to $15 
billion per year.
    CBO compared the number of ships that could be purchased 
with annual budgets of either $13 billion or $15 billion onto 
three scenarios for average ship costs: $2.1 billion per ship, 
as in the 2010 defense appropriation; $2.5 billion per ship, 
which was the Navy's estimate for the costs of ships in its 
2009 plan; and $2.7 billion per ship, which was CBO's estimate 
for ships in the 2009 plan.
    At the bottom end of the range, a $13 billion annual budget 
would buy 144 ships over 30 years, assuming an average cost of 
$2.7 billion apiece. At the top end of the range, a $15 billion 
annual budget would yield 214 new ships over 30 years if their 
cost averaged $2.1 billion each. This range is one-half to 
three-quarters the number of ship purchases proposed in the 
2009 plan.
    The subcommittee then asked CBO to analyze the procurement 
and inventory tables from a draft of the Navy's 2011 
shipbuilding plan which was reported in the press. That plan 
dramatically reduces ship purchases. Most of the cuts under the 
draft 2011 plan and the alternative construction plan that 
accompany it come from the Navy's combat ships, which are 
defined here as surface combatants, submarines, aircraft 
carriers and amphibious ships. Under the 2009 plan, the Navy 
would have purchased 245 combat ships. That number falls to 166 
combat ships purchased under the draft 2011 plan, and 207 
combat ships in the alternative plan. Thus by 2040, the draft 
2011 shipbuilding plan could produce fleets of 185 combat 
ships, which compares with 239 today or 268 under the 2009 
shipbuilding plan.
    It is not clear from available information what the Navy 
believes the draft 2011 plan would cost. CBO's preliminary 
assessment of the draft 2011 plan suggests it would cost an 
average of about $20 billion a year in 2010 dollars. The 
alternative 2011 plan, which adds the 56 ships, would cost an 
average of about $23 billion per year, CBO estimates.
    Now, with respect to replacing the Navy's ballistic missile 
submarines, many Navy and industry officials expect that the 
new ships would be substantially smaller than the Ohio class. 
However, that does not necessarily mean that they would be 
cheaper to build even after removing the effects of inflation. 
Press reports indicate that the Navy expects a class of 12 
SSBN(X)s, the designation for the new Boomer, to cost a total 
of about $80 billion. That total implies an average cost of 
around $6.7 billion, or one press reported indicated a $6- to 
$7 billion range.
    CBO assumed that the SSBN(X) would carry 16 missile tubes 
instead of 24 on the existing submarines and would displace 
around 15,000 tons submerged, making it roughly twice as big as 
the Virginia-class attack submarine, but nearly 4,000 tons 
smaller than the Ohio-class sub. Based on those assumptions, 
CBO estimates that 12 SSBN(X)s would cost an average of $7 
billion each. In all, CBO expects the entire new class of 
Boomers would cost about $85 billion.
    In light of the crucial role strategic submarines play in 
the U.S. strategic triad, policymakers may regard them as the 
most critical part of the Navy shipbuilding plan. If those subs 
are going to be replaced no matter what happened, and if the 
Navy receives enough resources to pay for them above and beyond 
what it might otherwise expect to allocate to shipbuilding, it 
could buy more surface ships and attack submarines. Under the 
alternative plan I mentioned earlier, that extra money, about 
$90 billion over the 30-year period, would purchase 56 
additional ships, 19 large surface combatants, 15 Littoral 
Combat Ships (LCSs), 4 attack submarines, 3 amphibious ships, 
and 15 logistics and support ships.
    Importantly, by 2040, the Navy's fleet would be about the 
same size as today's battle force, not 50 ships smaller as 
would be the case under the draft 2011 plan.
    Finally, with respect to the BMD mission, in a CBO report 
last year, my colleague Mike Bennett determined that three ship 
stations would provide nearly full coverage of Europe from 
Iranian missile threats by around 2018, once the Standard 
Missile-3 Block IIA was deployed. However, the Missile Defense 
Agency has stated that a broader and more demanding mission of 
defending Europe as well as parts of the Middle East from 
Iranian missile threats could require up to eight ship 
stations. Beyond 2020, Missile Defense Agency (MDA) suggests 
that with improvements in BMD-related missiles, radars and 
sensors, the number of stations at sea could be reduced to 
five.
    Under the Navy's traditional deployment cycle, 8 stations 
would require a rotation of 42 ships, whereas 5 stations could 
require 26 ships to provide continuous BMD patrols.
    The Navy could reduce the number of ships needed to provide 
full-time BMD presence by employing alternative crewing schemes 
or basing ships in Europe. For example, if the Navy rotated 
crews to forward-deployed ships, three ships would be needed to 
keep one operating full time in a designated BMD patrol area. 
In that case, only 24 ships would be necessary to support 8 
stations in the near term, or 15 ships for 5 stations beyond 
2020.
    The Navy, however, does not currently envision dedicating 
ships to the single mission of missile defense. Instead it 
plans to send BMD-capable ships on regular deployments to 
perform the full range of missions required to surface 
combatants, although some of those would be operating in or 
near BMD station areas. Under that approach using rotating 
crews and BMD-capable ships could prove more challenging 
because the crews not in deployment would need to maintain a 
high level of proficiency in many mission areas.
    Alternatively, if the Navy was able to use BMD-capable 
ships permanently in Europe or the Persian Gulf as it does now 
in Japan to counter the threat of North Korean missiles, it 
might need as few as five to eight ships, one for each station. 
But even in that scenario, if the Navy needed to guarantee that 
one ship per station was at sea at all times, it would need to 
double the requirement from 10 to 16 ships.
    Thank you Mr. Chairman, distinguished members of the 
subcommittee. That concludes my formal statement. I am happy to 
respond to any question you may have.
    Mr. Taylor. Thank you, Dr. Labs.
    [The prepared statement of Dr. Labs can be found in the 
Appendix on page 49.]
    Mr. Taylor. The Chair now recognizes Mr. Ron O'Rourke.

  STATEMENT OF RONALD O'ROURKE, SPECIALIST IN NAVAL AFFAIRS, 
                 CONGRESSIONAL RESEARCH SERVICE

    Mr. O'Rourke. Chairman Taylor, Congressman Akin, 
distinguished members of the subcommittee, thank you for the 
chance to speak today on Navy shipbuilding and force structure. 
With your permission I would like to submit my statement for 
the record----
    Mr. Taylor. Without objection.
    Mr. O'Rourke [continuing]. And summarize it briefly here.
    The Navy's new 5-year plan reportedly will include about 50 
ships, or an average of about 10 per year. Although LCSs and 
Joint High Speed Vessels (JHSVs) account for less than one-
quarter of the Navy's planned fleet, they reportedly count for 
about half of the 50 ships in the plan. In this sense, these 
relatively inexpensive ships are overrepresented in the 5-year 
plan relative to their portion of the planned fleet, making it 
easier to procure 10 ships per year within available funding. 
At some point in the future when the LCS and JHSV programs run 
their course and are no longer overrepresented in the 
shipbuilding plan, procuring 10 ships per year could become 
considerably more expensive.
    The new five-year plan reportedly contains only two 
amphibious ships and none after fiscal year 2012. This could 
result in a dip in workload starting in fiscal year 2013 at 
Northrop's Gulf Coast yards that might be deep enough to prompt 
speculation about a possible consolidation of some kind at 
these yards.
    The Navy's new 30-year plan reportedly contains two 
scenarios depending on whether or not the Navy pays for its new 
SSBNs out of hide. By drafting these two scenarios, the Navy 
is, in effect, reviving a debate about whether a service should 
pay out of hide for platforms that serve a national mission of 
strategic nuclear deterrence. Congressional Research Service 
(CRS) testimony two years ago stated that the Navy appeared to 
be laying the groundwork for reviving this debate.
    The 30-year scenario shows that if the Navy pays for the 
SSBNs out of hide, procurement rates for surface ships could be 
reduced to levels low enough to make a substantial 
consolidation of the surface ship industrial base a distinct 
possibility, if not a likelihood. The scenarios also show that 
if the Navy pays for the SSBNs out of hide, Navy force levels 
would eventually drop well below required figures. The 
resulting fleet would have substantial capability shortfalls.
    The projected decline in force levels could immediately 
begin to generate or reinforce perceptions of the U.S. as a 
declining power. Such perceptions could make it more difficult 
for the U.S. to achieve policy goals in a variety of areas, 
such as trade, finance, climate change and nonproliferation. 
Perceptions of the U.S. as a declining power might be 
particularly likely in the Pacific Basin, where naval forces 
play a prominent role in military operations, and where China, 
which is modernizing its navy, is viewed as a rising power. 
Perceptions in the Pacific Basin of the U.S. as the declining 
power and China as a rising power could shape the political 
evolution of that region in ways that could make it more 
difficult for the U.S. to achieve various policy goals.
    Regarding demands for ships for European BMD operations, 
Department of Defense (DOD) testified last fall that it is 
considering maintaining two ships at each of three stations for 
a total of six ships on station in European waters. If the Navy 
filled that requirement using east coast home-ported destroyers 
operating on seven-month deployments, then maintaining those 
six ships on station could require more than two dozen ships. 
That figure might be reviewed as a high-end or worst-case 
analysis. It could be reduced in a number of ways. A strategy 
that combined European home-porting, multiple crewing, taking 
advantage of transit presence and using an operational tether 
could reduce it substantially.
    The Navy reportedly wants to cancel the CG(X) cruiser and 
instead procure an improved DDG-51. In assessing this plan, one 
issue to examine would be the performance that the improved 51 
in conjunction with off-board sensors would have against 
advanced cruise missiles and anti-ship ballistic missiles.
    A second issue to examine would be the vulnerability of the 
off-board sensors and data links and the reduction in 
performance that would occur if these sensors and data links 
are degraded by enemy attack.
    And a third issue to examine would be the improved 51's 
growth margin, including the ship's ability to be back-fitted 
with high-powered, directed-energy weapons such a laser. High-
powered, directed-energy weapons could be critical to the 
Navy's long-term ability to affordably counter cruise and 
ballistic missiles fielded by a wealthy and determined 
adversary.
    If policymakers decide that the Navy's improved 51 would 
not be an adequate solution, and that a DDG-1000-based solution 
would be unaffordable, then other options would include a DDG-
51 with modifications that are more significant than what the 
Navy is reportedly considering, or a new design destroyer that 
is more affordable than the CG(X) or the DDG-1000. My statement 
outlines these two options.
    Finally, the reported five-year plan would apparently stop 
LPD-17 procurement in fiscal year 2012. This would make it more 
expensive to use the LPD-17 as the basis for the LSD 
replacement because of the lengthy interval between the fiscal 
year 2012 and the start of the LSD replacement program years 
from now. Procuring an additional LPD-17 within the five-year 
plan, perhaps in fiscal year 2014, as the first LSD replacement 
could reduce the cost of using LPD-17 as the basis for this new 
program.
    Mr. Chairman, this concludes my opening remarks, and I will 
be happy to answer any questions the subcommittee may have.
    Mr. Taylor. The Chair thanks the gentleman.
    [The prepared statement of Mr. O'Rourke can be found in the 
Appendix on page 67.]
    Mr. Taylor. The Chair now recognizes Dr. Loren Thompson.

 STATEMENT OF DR. LOREN B. THOMPSON, CHIEF OPERATING OFFICER, 
                      LEXINGTON INSTITUTE

    Dr. Thompson. Thank you. Thank you for the opportunity to 
be here and discuss my views on the Quadrennial Defense Review 
(QDR) and future shipbuilding requirements.
    The QDR is going to be organized around four themes: 
prevailing in today's wars, preserving the force, preventing 
new conflicts and preparing for diverse contingencies. The goal 
is to balance joint capabilities for coping with conventional 
and unconventional aggression, an approach that I think poses 
little danger to the Navy's future shipbuilding plans since all 
the vessels in the fleet are adaptable and versatile.
    However, the current fiscal environment imposes two 
pressures on the shipbuilding plan that the QDR will not be 
able to fix. First of all, America's economy has fallen from 32 
percent of global output at the beginning of this decade to 
only 24 percent today, and as a consequence we will not be able 
to continue sustaining about half of the world's military 
outlays.
    Second, the rising price of military pay and benefits is 
squeezing technology spending out of the defense budget, 
creating tensions between the Navy and the Marine Corps as to 
which ships should be bought. Both of these trends portend 
bitter debate over shipbuilding plans in the years ahead.
    I would like to spend about half of my time talking about 
the undersea fleets, since that is where our most pressing 
budget problem is, and then spend the remainder of the time 
talking about the surface fleet.
    Turning to the undersea fleet, I think if you talk to most 
of the experts in the field, they will tell you the submarines 
are the one class of warship or the one type of warship that we 
can count on still being survivable in hostile environments at 
midcentury.
    Now, aside from a handful of special-use submarines, the 
U.S. Navy undersea fleet today essentially consists of two 
types of warships: ballistic missile submarines that provide 
secure retaliatory forces to our nuclear deterrent, and fast-
attack submarines, which, in addition to collecting all sorts 
of intelligence, also conduct an array of other military 
missions.
    The Quadrennial Defense Review will reaffirm the priority 
of the nuclear deterrence mission, but it will also signal 
something else, that the bombers and the land-based missiles 
that are the other two legs of the triad are going to be 
contributing less capability in the future. So ballistic 
missile submarines will become even more important in deterring 
a nuclear attack in the future, and that has two implications.
    First of all, we must be ready to replace Trident ballistic 
missile subs when they begin retiring in 2027. Second, the 
replacements must be even quieter than the Tridents to ensure 
they cannot be targeted in a surprise attack. In other words, 
the Navy can't just build more Tridents; it needs to design a 
better successor. And in order for a new sub to be ready on 
time, the six-year design cycle must commence in 2012.
    Assuming a successful design phase, the Navy plans to build 
the lead ship in 2019, another ship in 2022, and then one ship 
per year between 2024 and 2033. But each of the Trident 
replacements after the lead ship is going to cost $5 billion, 
and the only way to find that kind of money in already 
overstretched shipbuilding accounts would be to defer other 
vessels. This funding dilemma is made worse by the fact that 
the Navy waited too long to ramp up the production of the 
Virginia-class attack subs, so it will now be unable to prevent 
the attack sub inventory from falling below the required number 
of 48 once the Los Angeles class begins retiring later this 
year.
    The Navy can manage the looming shortfall in attack subs by 
incrementally extending the lives of legacy subs and 
lengthening the tours of sailors at sea, but it will have to 
build two Virginias every year between 2011 and 2025 to avoid 
falling below 43 boats at the lowest point in 2028. That is now 
the Navy's projected internal number. The lowest point is 43 
boats in 2028.
    The good news is that the time and money required to build 
each new Virginia is falling steadily, and there is a lot of 
things we can do to improve the Virginias if we extend the 
production run beyond the planned 30 boats.
    Nonetheless, we can't accommodate all this undersea design 
and construction work within likely shipbuilding budgets 
without displacing required surface levels. So therefore, I 
think that special steps are going to need to be taken to fund 
the Trident's replacement. With ballistic missile subs destined 
to become the most important part of our nuclear deterrent in 
the future, there is a strong case for funding the Trident 
outside normal budget channels rather than cutting construction 
of other warships to cover the cost of our most important 
military mission.
    Turning to the surface fleet, many of you have no doubt 
heard the hottest shipbuilding rumor spawned by the QDR 
process. Mr. Akin, in fact, alluded to it in his own remarks, 
that the number of aircraft carriers will be cut from 11 to 10 
or even to 9. I can assure you that if that happens, it won't 
be because the Navy wants to do it.
    It is true that we are headed down to 10 in 2013 because 
there is a 33-month gap between when the Enterprise goes out of 
the fleet and the first Ford class comes in. The Enterprise 
would be prohibitively expensive to refuel because it has, if 
you can believe it, eight reactors. But that is only a 
temporary situation.
    Although the Navy could meet current warfighting 
requirements with one or two less carriers, a permanent cut 
wouldn't be prudent for two reasons. First of all, warfighting 
requirements are going to change in the future. We don't know 
how, but they will change. Secondly, there is a high likelihood 
that wartime attrition will occur in the future, so it makes 
little sense to cut the number of carriers to the absolute 
minimum currently required. And the Navy 2011 shipbuilding plan 
will call actually for maintaining 11 flattops through the year 
2040.
    Now, there is a lot to be said that is nice about the next 
class of carriers, the Ford class, that will be the successor 
to the Nimitz. It delivers more sorties, it delivers more 
power, it delivers more protection. In addition, it reduces 
crewing requirements by several hundred personnel at least over 
the lifetime of the ship, which means that during the time it 
is operating, roughly 50 years, it will save nearly $5 billion 
in operating costs.
    However, I think the real key to the future viability of 
aircraft carriers may not be a new hull; it may be getting 
better airplanes on the flight deck. We have to push ahead with 
the F-35 because it is stealthy, and the Navy next has to step 
ahead, go ahead with the unmanned combat air vehicle because it 
is unmanned and stealthy; otherwise I am not very optimistic 
about the survivability or utility of carriers in the western 
Pacific as we get to midcentury.
    Well, I wish I could say that the story was that simple for 
the rest of the surface fleet. What we see there, though, is an 
unsettled picture created in equal parts by lack of money and 
lack of agreement between the Navy and the Marine Corps as to 
what needs to be bought.
    In the case of the surface combatants, the Navy is poised 
to abandon two of the three new classes that it announced at 
the beginning of the decade. It wants to walk away from what 
was then called the DD(X), now DDG-1000, land-attack destroyer 
after three ships, and it also wants to cancel the CG(X) next-
generation missile-defense cruiser. Instead its plan is to 
build an upgraded version of the multi-role DDG-51 Arleigh 
Burke destroyer while upgrading other Arleigh Burkes and 
Ticonderoga-class cruisers, Aegis boats, that are in the fleet 
today.
    Now, I think those plans make sense. The DDG-1000 is too 
expensive to populate a 300-ship fleet, and its concept of 
operations will put a very valuable asset too close to enemy 
shores. CG(X) will probably not be needed at all once the Aegis 
combat system is upgraded on legacy destroyers and cruisers 
because the tracking of ballistic missiles doesn't have to just 
be done from a ship; it can also be done from space by systems 
like the new Space Tracking and Surveillance Satellite.
    The third new combatant announced at the beginning of the 
decade, the Littoral Combat Ship, is essential to expanding 
fleet numbers to 300. I think Mr. O'Rourke referred to the fact 
that we have managed to get the shipbuilding numbers up by 
building a lot of smaller, cheaper ships, like the Littoral 
Combat Ship, and I guess also the Joint High Speed Vessel. But 
it really is essential for that reason for getting the fleet 
back up above 300 again. However, the Navy has decided for 
budget reasons to down-select to a single design. That step 
really was necessary because it is very expensive to try to 
maintain, upgrade and equip two different classes of ship for 
what is essentially the same mission. I predict that if the 
winning team does a good job of building this ship, then the 
service never will go to a second source, that it will try to 
save as much money as possible by sticking with one source.
    Finally, as for the amphibious warfare fleet, that part of 
the force posture looks likely to be a focus of controversy for 
many years to come. The Navy and the Marine Corps have parted 
ways on the need for 38 amphibious warships, and as a result 
the Marines are now lobbying the Congress to fund vessels that 
are not included in the 2011 shipbuilding plan.
    To say they have parted ways is a bit of an understatement. 
It is not just that the Navy wants to buy fewer than 38 in the 
future; it wants to buy fewer than 30 in the future.
    Personally, I agree with the position Chairman Taylor 
expressed last year that we should fund serial production of 
new amphibious assault and transport ships to provide the core 
of the future sea base and replace aging vessels, but that does 
not seem to be where the Navy wants to go. Secretary Gates has 
foreshadowed the possibility that reductions in amphibious 
warfare capabilities may emerge from the Quadrennial Defense 
Review, but I would urge you to look very closely at the 
reasoning about future threats and requirements before you go 
along with that plan.
    Well, I have exhausted my time, so let me just close by 
observing that even if we kill the DDG-1000, and even if we cut 
back on our amphibious warfare capabilities, the Nation's naval 
shipbuilding requirements are not likely to fit within 
projected budgets. Therefore, I think we need to have a 
discussion about how important nuclear deterrence is to 
national survival and fund the submarines supporting that 
mission in a way that does not hobble other sea-service 
missions. Thank you.
    [The prepared statement of Dr. Thompson can be found in the 
Appendix on page 89.]
    Mr. Taylor. The Chair thanks all the gentlemen. And I want 
to begin with the very basic question, and I deeply regret--
again, I want to make this perfectly clear, I consider 
Secretary Mabus my friend. I voted for him, State auditor, and 
I voted for him twice for Governor, and I wish he were here 
today. I also had a very good friend by the name of Mike 
Parker, retired as the Under Secretary of the Army after one 
day for speaking his mind rather than what Secretary Rumsfeld 
wanted him to say. So I understand the constraints on the 
Secretary. But I do wish he was here today.
    If the Secretary was here today, I would say to him, thus I 
am going to say it to you; the President has outlined a plan to 
put our Nation's national missile defense on ships. How many do 
we need to do that adequately? What is it going to cost either 
to convert an existing DDG-51 or to build a new version of the 
51 for that purpose?
    And I will start with you, Dr. Thompson. How many do we 
need? What is it going to cost? What is the most likely way 
that this is going to be done, through a conversion of a 51 or 
a new class of 51s?
    Dr. Thompson. Well, I don't think we are going to need a 
CG(X) cruiser to begin with. I think the Navy has come to the 
same conclusion. The original plan for taking the hull of the 
DDG-1000 and using it also for a foundation of a missile-
defense cruiser was predicated on the belief that you needed a 
lot of power generation and a very big sensor, because all of 
the tracking and discrimination of enemy warheads was going to 
be done by one radar on one ship.
    We don't really need to go that route. We are living in the 
era of networked warfare, and therefore there is the 
possibility not just for netting together all of the Navy's 
sensors at sea, but also overhead sensors from the Joint Force 
and the Intelligence Community. If you do that, then you have 
the potential to track incoming ballistic missiles, including 
all sorts of confusing things like penetration aids, decoys, 
debris and so on pretty precisely, and therefore you can do 
that from a DDG-51 with less power requirements and a smaller 
sensor because you have so many different eyes on the target.
    Having said that, though, the requirement for the ships is 
driven mainly by two things: What level of protection do you 
want? We have spent tens of billions of dollars to deploy a 
land-based ICB defense of the United States, and yet it could 
not stop a determined Chinese or Russian attack.
    The second thing is what sorts of technology breakthroughs 
do we reasonably expect we can achieve in terms of radar 
weight, in terms of power aperture, efficiency and that sort of 
thing? I am not--being a liberal arts major, I am not going to 
give you a precise answer on that; however, I would say that if 
this is going to provide most of the defense for the 
continental United States in phase 4, the White House's 
announced plan, in other words by being able to deal with 
Intercontinental Ballistic Missiles (ICBMs) in addition to 
short- and medium-range missiles, we are probably talking about 
dozens of Aegis class vessels.
    Mr. Taylor. Is that in addition to the existing fleet, or 
is that taking the existing fleet and modifying it for that 
purpose?
    Dr. Thompson. Well, most of the money and most of the 
effort is going to be spent upgrading the preponderance of the 
Ticonderogas, not all of them, and virtually all of the Aegis 
destroyers. However, those ships appear to be committed to 
other missions at the present time, and so I would have to 
conclude that when I say dozens, it is dozens above and beyond 
the existing requirement.
    Mr. Taylor. And do you see any evidence--and I would open 
this up to the panel--do you see any evidence that the 
Administration is actually moving in that direction? I know 
they have said they are going to do it, but as far as budgeting 
purposes not only for next year, but for the foreseeable 
future, have you seen any evidence, any indications that they 
are following up that pledge with the actual purchase of the 
ships to do the job?
    Dr. Thompson. Not the hulls. They are certainly investing 
in the sensor and computer technology, they are developing the 
munitions, but they are not funding the number of hulls that 
would be required to ship most of this mission for continental 
missile defense to the Navy.
    Mr. Taylor. Dr. Labs, do you want to answer those 
questions?
    Dr. Labs. Sure, Mr. Chairman.
    I don't disagree, I think, with anything that Dr. Thompson 
said. I would just add a few observations in addition to that.
    The Navy's 313-ship requirement, which was developed, if 
memory serves correctly, back in about 2006, had a requirement 
for 88 large surface combatants. That was a requirement that 
was developed at that time where the BMD mission was not part 
of the equation. So to the extent that the BMD mission is now 
going to be layered on top of that requirement, obviously 
additional ships in some number would be required.
    How many ships, you ask? That would depend again, as I sort 
of indicated in my testimony, how many stations are you going 
to have where ships need to be in constant patrol? Are those 
ships going to be in constant patrol? Do we need to have them 
there providing coverage 24 hours a day, 7 days a week? If that 
is the case, I would agree with Dr. Thompson that the 
requirement for ships is in the order of dozens, as my 
statement indicated. On the other hand, if you think you can 
just surge ships to the area when a crisis is developing, if 
you want to provide the coverage that way, then the number 
would be considerably less and possibly even done as part of 
the existing requirement of routine deployment of surface 
combatants.
    Another factor would be do you change how the rotation 
factor occurs; is it the traditional rotation from the east 
coast, or do you try to do multiple crewing? That, too, will 
sort of affect the number of ships.
    Mr. Taylor. Before you get too far along, you said a 
destroyer in the course of its routine operations. In your 
opinion or in the panel's opinion, can a destroyer that is 
performing escort duty for a carrier also be counted on to 
provide ballistic missile defense?
    Dr. Labs. I would not necessarily want to count on a 
destroyer that is providing escort to a carrier to do that. But 
we also do deploy surface combatants independently or part of 
surface action groups that are not necessarily doing duties in 
carrier escort. But it is certainly possible, depending on what 
the nature of the mission is or what is occurring, whether that 
is possible. If you have a crisis situation, and you are 
worried about protecting the carrier from the same sorts of 
threats that you want to protect European cities, for example, 
then you are going to need additional ships to provide, in my 
opinion, that additional coverage.
    Mr. Taylor. Thank you, sir.
    Mr. O'Rourke.
    Mr. O'Rourke. Just three quick additions to what has been 
said already. In terms of evidence that the Navy has funded 
what they are talking about in terms of conversions of existing 
ships, it is my understanding that it is the Navy's plan, and 
it has been for the last year or two, that every DDG-51 
eventually be converted to a BMD configuration, and taking a 
regular 51 and converting it to the current BMD configuration 
costs about $40- or $45 million. It is my understanding for a 
year or two now that that is the Navy's intention. So the Navy 
is resourcing the idea of having many, virtually all, of its 
51s and at least five of its Aegis cruisers be converted for 
BMD capability.
    In terms of funding new builds, if the press reports are 
accurate about the cruiser destroyer requirement increasing to 
96, then those press reports also indicate that the Navy is not 
fully resourcing that, because even under the scenario where 
the Navy does not have to pay for the SSBNs out of hide, and 
the other shipbuilding programs are consequently not reduced, 
the Navy is still not achieving and maintaining a 96-ship 
cruiser-destroyer force, according to the tables that were 
published.
    And third, in terms of the additional burden on the 
cruiser-destroyer fleet, one way of looking at it is to note 
that over the past few years, the Navy has maintained an 
average presence in European waters of about 1.7 cruisers and 
destroyers, and now we are looking at increasing that to 
something like 6, perhaps, if we have 3 stations with 2 ships 
each. And then Eric is taking you through the preliminary math 
on what that may mean. My math is not really substantially 
different from that. That means if demands for cruisers and 
destroyers in other parts of the world do not decline, then the 
mathematics of this net increase in the cruiser-destroyer 
presence level in Europe are going to increase demands for 
cruisers and destroyers overall by about that much.
    Mr. Taylor. In your opinion, going back to the question by 
Dr. Labs, can a destroyer that is providing escort to a carrier 
also be counted on to provide national missile defense?
    Mr. O'Rourke. I think it is problematic in the sense that 
the carrier is not necessarily always going to be in the 
location that would be optimal for doing the BMD mission. Just 
because the carrier, for example, is in the Mediterranean 
doesn't mean it is in the right part of the Mediterranean to do 
that mission. So there may be portions of time during which 
that cruiser or destroyer might be in a good location to take 
on that mission while it is also performing other missions, but 
at other times it is not going to be in the right part of the 
Mediterranean to do that.
    Dr. Thompson. Mr. Chairman, could I add one important 
qualifier?
    Mr. Taylor. Sure, Dr. Thompson.
    Dr. Thompson. Every Aegis destroyer that is upgraded from 
2012 on will be qualified to do ballistic missile defense, as 
will 15 Ticonderogas. However, when they say ``qualified,'' 
what they mean is it will have the ability to shoot down a 
short- or medium-range missile carrying a unitary, meaning a 
relatively simple warhead. If we are looking at an 
intermediate- or an intercontinental-range missile or something 
carrying sophisticated penetration aids like decoys, it 
wouldn't be able to do most of that. That requires additional 
steps that were in the White House plan announced in September, 
but the cost becomes quite imposing if you go up from that 
level of capability.
    Mr. Taylor. Thank you, sir.
    Chair now recognizes the gentleman from Virginia, Mr. 
Forbes.
    Mr. Forbes. Thank you, Mr. Chairman. And, Mr. Chairman, I 
want to thank you for the integrity and tenacity you bring to 
this subject and to this subcommittee.
    And, gentlemen, thank you so much for being here.
    Mr. Taylor. Mr. Forbes, you are the acting Ranking Member, 
so you will not be subject to the five-minute rule.
    Mr. Forbes. Thank you, Mr. Chairman. I will try to stay as 
close to that as I can.
    I would also like to take us out just for a moment from the 
trees and take a look at the forest. And when I am traveling 
around now and I am talking to people about national defense 
issues and budgetary issues, I constantly hear this word 
``frightened'' from a lot of people.
    One of the things that frightens me are two things. If you 
turn around, you will see all of these empty chairs behind you, 
and it bothers me to no end, frightens me, that the Navy is not 
here asking or responding to our questions today. It frightens 
me that the law requires that the Navy give us a shipbuilding 
plan, and they just refuse to do it. And it frightens me that 
when this committee then under a congressional inquiry demands 
that they give us that shipbuilding plan, they just refuse to 
do it.
    And I am looking at some of the projections that we have 
had, and we have had testimony in years past where we looked at 
the Chinese, for example, and what they were doing with 
aircraft carriers, and we were basically told, no, they are not 
going to build aircraft carriers, and then that flipped, and we 
were told about the subs that they weren't building, and that 
flipped.
    Just recently we had the Military Power of the People's 
Republic of China report, which I am sure all of you are 
familiar with, that projected that the Chinese had 260 ships in 
their fleet. Last week Admiral Willard came in and testified 
they have 290 ships in their fleet. That is a big difference in 
just a short period of time when you look at the fact that we 
are looking at about 287 ships.
    We also just had a report in the Washington Times that the 
White House National Security Council has recently directed the 
U.S. spy agencies to lower the priority placed on intelligence 
collection for China, and that was despite the opposition from 
senior intelligence leaders who fear it would hamper efforts to 
obtain secrets about Beijing's military and cyber attacks.
    And here is my question for you: Why are our estimates 
always seemingly so far off? That seems like a big gap, 260, 
290.
    Secondly, do you see any shift now; is it a concern to you 
that our budget is now possibly playing a greater role in a 
ship acquisition policy or policies than maybe our defense 
posture is playing in those same policies?
    And then the third question is, how is our force structure 
being shaped by the growing capability of the Chinese Navy? And 
does it concern you at all if we are lowering our intelligence-
gathering capabilities from what they are doing? And I throw 
that out to any or all of the three of you.
    Mr. O'Rourke. I guess I could start on that.
    As you know, I maintain a CRS report on Chinese naval 
modernization. I initiated that report in November of 2005. It 
has been updated more than 40 times. And I did that to make 
sure that there was a readily available source of information 
for Members and staff on this topic.
    In terms of what role China's naval modernization is 
playing in Navy force structure, I guess I would say this, that 
I think there are a number of relatively expensive investment 
programs in the Navy's plan that to one degree or another are 
China related. And so if China does not become a sizable 
element of the public discussion over U.S. defense plans and 
programs, then I think that creates a possibility that some of 
those programs may not be fully funded.
    One of those programs was the CG(X) cruiser, and the press 
reports are now indicating that that program has been 
cancelled, and the Navy is reportedly proposing to do that 
because they are familiar--they are now comfortable with the 
idea of doing the mission a different way with the approved 51s 
and the netted sensors. But nevertheless, I think that if the 
Navy had its druthers, and if its resources increased, it might 
have preferred to still go ahead with that program.
    And in terms of intelligence collection, one of the ways of 
responding or of programming with a consciousness towards 
Chinese naval modernization is to take steps to increase 
intelligence and monitoring what is going on in China's Navy, 
and I have talked about that in my CRS report on China naval 
modernization. And so if you were to increase the emphasis that 
China plays in your defense plans and programs, that is one of 
the things that you would want to emphasize.
    Dr. Thompson. I certainly don't think we are underfunding 
the intelligence function. The Director of National 
Intelligence stated 2 months ago that we are spending $75 
billion a year on intelligence, which is a lot of term papers. 
However, I am afraid that our performance is not improving in 
this new era. We have a pretty bad track record. We didn't see 
Pearl Harbor coming. We didn't see North Korea's invasion of 
the South. We didn't see the Tet Offensive. We didn't see the 
collapse of communism, and we didn't see 9/11. Yes, there were 
some analysts off in some obscure places saw it coming, but the 
system didn't see it coming.
    And the implication that I draw from that, I mean, even 
now, when I see the intelligence of this decade saying--the 
intelligence community saying, you know, Iraq, they are 
developing nuclear weapons and Iran isn't, when we all know the 
opposite is the case, right? When you see something like that, 
what it tells you is: don't count on the intelligence. Having a 
margin of error in your military posture, funding on the 
assumption your intelligence analyses are wrong, is the only 
prudent thing to do.
    Mr. Forbes. Mr. Labs.
    Dr. Labs. I guess the only thing I would add to that, to 
your point, is the role of budgets, sort of, playing too large 
of an issue relative to our other priorities in defense policy.
    Certainly in all the time that I have been doing defense 
policy in Washington, working for CBO, there has always been a 
balance between your defense priorities and how much money you 
have to spend on that. And the question always comes year to 
year is, you know, where is that balance filling out? Is what 
you buy and what you choose to do being driven primarily by 
cost, or is it being driven primarily by the strategy that you 
are seeking to do?
    And the balance that goes on there is something that every 
Administration juggles. And I am not sure that I am in a 
position to really judge whether the budget is getting too much 
emphasis today compared to what the strategy should be. I know 
that you can't, sort of, go about developing a strategy in the 
absence of a budget, because if you could do that, you wouldn't 
need a strategy; you could just do everything you possibly 
wanted. There is always a balance of, sort of, costs and risks, 
and how that balance is weighing out is certainly worthy of 
discussion and should be part of the defense debate.
    Mr. Forbes. Yeah, I guess the thing that concerns me most 
is we don't get to have that debate because we don't have the 
Navy here to ask those questions and we don't have their 
shipbuilding plan to ask them questions about.
    But thank you so much, gentlemen.
    Mr. Chairman, I yield back the balance of my time.
    Mr. Taylor. The Chair thanks the gentleman and wants to 
remind the gentleman that the Navy will be here in February, 
but we certainly wish they had been here today.
    Mr. Hunter has expressed that he has a conflict and needs 
to leave fairly shortly. So, if there is no objection, I am 
going to recognize him out of order for five minutes.
    Mr. Hunter. Thank you, Mr. Chairman. And, again, thanks for 
your leadership on this and for the great support that you show 
for our manufacturing base as well as our national security 
when it comes to the Navy.
    First question, Dr. Thompson, when you talk about the 
fallout between the Navy and Marine Corps, is this because of a 
shift in the way that the DOD looks at surface fires now for 
land invasions? Is that kind of what we are talking about or 
what?
    Dr. Thompson. It is a lot bigger. It gets to a fundamental 
disagreement about what the future role of the Marine Corps 
should be. It gets to a level where the Navy--the political 
appointees in the Department of the Navy actually want to 
change the phrase ``forcible entry'' to ``theater access.'' 
This is a substantial watering down of the whole concept that 
we have been building toward for a decade. It is less amphibs, 
it is less mine sweeping, it is less naval surface fires, it is 
pretty much less of everything, so the money can go to other 
priorities.
    Mr. Hunter. You said that the Marine Corps's mission, the 
Navy is trying to redefine it. But is the Navy's mission being 
redefined to, meaning they are going to stay offshore more? And 
is that possibly due to fewer ships? Each ship is so much more 
valuable now that they don't want to risk and they don't want 
to get in close?
    Dr. Thompson. The Obama plan, as set forth in general terms 
by Under Secretary Work, is $15 billion a year for 
shipbuilding. That is somewhat more than we have been funding 
recently. So I don't think we can blame it on lack of ships.
    There certainly, though, has been a breakdown in the 
consensus between the Marine Corps and the Navy since the Obama 
Administration began about what the proper purpose of 
expeditionary forces are and what resources are required to 
support them.
    Mr. Hunter. When did that shift happen? And any of you, 
please, chime in here. Is this kind of a new shift in thinking 
in the Pentagon, or has this been around for a long time and it 
has suddenly prevailed recently?
    Dr. Labs. Well, I think that the debate between what is, 
sort of, the proper role of the Marine Corps and the sourcing 
for amphibious ships has actually been around for quite some 
time. I mean, many people have discussed in the past about how, 
you know, the amphibs, the Gators are all sort of the poor 
man's Navy and that they don't receive, necessarily, the 
highest priority in the shipbuilding accounts.
    And all of this stems, in my judgment, from the budgetary 
pressures that are on the Navy shipbuilding account but also in 
other procurement accounts as a whole. And if you have a 
program that is this big and you have this much to spend, you 
are going to look for things to cut. And changing whether you 
want to do a forcible entry capability as, sort of, a national 
capability to maintain is one way to, sort of, reduce your 
requirements for ships.
    Mr. Hunter. So it is strategic--it isn't based on national 
security and what we want to do; it is based on what the budget 
is. And we are then defining what we want the Navy's mission to 
be or the Marine Corps's mission to be not by what is needed 
but by what the budget is.
    Dr. Labs. I am saying that that is certainly one factor in 
the equation.
    Mr. O'Rourke. The press reports about the Navy's new 
shipbuilding plan include a draft version of the Navy's report 
on their new 30-year plan. And, in that draft report, there is 
an acknowledgment that the dropping of the MPFF requirement is 
something that was basically fiscally driven, that the 
requirement is viewed as valid but not currently within the 
Navy's reach bugetarily. And that is something that would be 
near and dear to the Marine Corps in terms of their ability to 
launch and sustain operations ashore from a position at sea.
    And I tend to agree with Eric. I think that the tension 
between the Navy and the Marine Corps about what kinds of ships 
should be in the shipbuilding plan goes back a fair ways. And I 
think there is a sense among some observers, correct or not, 
that the Navy may accord a lower priority to amphibious ships 
because they are not essential to the Navy's own combat 
mission, as they are to the Marine Corps's. And, in the 
presence of constrained funding, that tension can come out 
between the two services.
    Mr. Hunter. Thank you, gentlemen.
    Thank you, Mr. Chairman, and to my colleagues for your 
latitude on my questioning.
    Mr. Taylor. The Chair thanks the gentleman.
    The Chair now recognizes, in the order of people who were 
here at the time of the gavel, Mr. Larsen for five minutes.
    Mr. Larsen. Thank you, Mr. Chairman.
    Going back to missile defense and ballistic missile defense 
and so on, we are also--a few of us are on the Strategic Forces 
Subcommittee, which oversees missile defense, so I want to just 
explore this a little bit.
    Obviously, we have talked about how the Navy is 
increasingly being called on to perform ballistic missile 
defense operations. The preferred platform for the mission 
appears to be the 51.
    Help me understand. Does the future shipbuilding plan 
envision the 51 being the sole platform? Is that the assumption 
that you all are operating under?
    Mr. O'Rourke. The reported shipbuilding plan would have the 
51 be the dominant BMD platform, along with some number of 
cruisers. But, numerically, it would be a very large number of 
51s, plus some number of cruisers in addition to that.
    Mr. Larsen. Mr. Thompson, going back to what you were 
talking about with regards to the 51s and the radar 
capabilities of the 51s and modernizing them, is there a choice 
to be made between, say, modernizing the 51s with Aegis versus 
a different approach to radar tracking for missile defense?
    Dr. Thompson. There is a wide menu, a big menu of options 
for doing this. I think the reason the Navy favors the Aegis 
solution is that it is relatively cheap compared with the 
alternatives. And, secondly, if you buy an Aegis warship, you 
don't just get a ballistic missile defense capability; you get 
air defense, you get antisubmarine, you get a limited land 
attack capability, and all sorts of other things.
    So, from the Navy's point of view, they are acquiring a 
multi-mission warship which can be continuously upgraded for a 
wider range of ballistic threats also.
    Mr. Larsen. Yeah. Would that be consistent, Dr. Labs, with 
your thoughts on that?
    Dr. Labs. Yes, Mr. Larsen. I think that what the Navy is 
pursuing, at least based on press reports that we have seen so 
far, is they are going to pursue the 51 for the foreseeable 
future. They are going to upgrade everything that they have--
well, most the cruisers and then all of the 51s--to do that.
    And they will follow on with continuing to build 51s or 
some modified version of them, driven in part because they 
think it is probably the most cost-effective solution and also 
in part because it is, from their perspective, one of the least 
technically risky solutions. They are very familiar with the 
Aegis system. They are very familiar with the hull. And they 
think they can do what they need to do with the least amount of 
technical risk to be able to get the capability out to the 
fleet that they want.
    Mr. Larsen. I think, you know, we may have a debate about 
this in the future. We could probably all agree on least 
technically risky approaches.
    But getting to that question, we passed a procurement 
reform bill this last year. Presumably we are taking a whack at 
the other 80 percent of procurement we didn't touch.
    Is there anything in those bills that can provide us some--
I wouldn't call it hope, but provide some direction that maybe 
the cost estimates that we are hearing about from you all can 
be at least incrementally or marginally less?
    Dr. Thompson. Oh, yeah. I mean, actually, the Navy--you 
would never guess it to read the press coverage, but actually 
the Navy is doing a better job than the other services of 
getting its costs down and getting ships out to the fleet 
faster. The Littoral Combat Ship made it to the fleet in half 
the time that a traditional warship did.
    In the case of the Virginia class, I think the Missouri is 
going to deliver in 62 months, whereas the initial ship was 
like what, 86, 88 months? And, as a result, the number of man-
hours required to build the first ship, 15 million, has fallen 
to below 11 million now, if I have that right. And the cost has 
come down by nearly 20 percent.
    I mean, not only is there clear evidence in the Department 
of the Navy that you can save money by doing this differently, 
but they have actually--there is actually a lot of other room 
for doing things like that. Like the chairman's idea of doing 
serial production using the same amphibious hull for a range of 
future warships rather than always coming up with a new class 
and breaking the multiyear packages. There are lots of ways of 
saving money.
    Mr. Larsen. Mr. O'Rourke, have you given thought about the 
procurement reform legislation we passed into law and how that 
applies to future acquisition and how it impacts your analysis? 
Does it at all?
    Mr. O'Rourke. I guess the one thing I would say is that the 
Navy has come through a period where it has recently introduced 
several new ship designs. And so the Navy is now looking 
forward to a period where it is introducing relatively fewer 
new ship designs and is spending more of its time, 
proportionately, on getting into regular, serialized production 
of existing designs.
    That, sort of, gets you away from defense acquisition 
reform, because it gets you away from the issues that are posed 
when you start a new acquisition program. But, in a sense, that 
is precisely the Navy's point, that they are not going to be 
initiating that many new shipbuilding programs in the future 
and, consequently, can concentrate on the efficiencies that can 
come by putting existing designs into regular, serialized 
production.
    Mr. Larsen. Yeah. Yeah.
    Thank you, Mr. Chairman.
    Mr. Taylor. The Chair thanks the gentleman.
    The Chair now recognizes Mr. Coffman for five minutes.
    Mr. Coffman. Thank you, Mr. Chairman.
    The first question is on nuclear propulsion. It is only the 
aircraft carriers that are nuclear at this point in time, and I 
think our chairman has raised, a number of times, the 
vulnerability of other ships and their refueling needs.
    How significant are the capital costs to have the lesser 
ships be having nuclear propulsion systems? Can you amortize 
those costs out to where the operating costs are much less over 
time, even though the costs are more significant up front? Give 
me an analysis along with the tactical advantages of having 
nuclear power.
    Dr. Thompson. Well, let me just say one thing up front, 
which is that the ship that we have been talking the most of 
adding to the nuclear fleet are the large surface combatants, 
and the Navy is in the process of killing all those. So we are 
reduced in terms of our options for doing that.
    But, having said that, your point about amortization is 
exactly right. Unfortunately, our political system does not 
respond well to the notion of amortization unless everything 
can be amortized before the next election cycle.
    It costs a lot more up front to equip a ship with nuclear 
power. It costs a lot less down the road to operate it with 
nuclear power. But the system is much more responsive to the 
upfront costs than to the later operating burden.
    Mr. Coffman. Okay.
    Dr. Labs. Mr. Coffman, CBO actually has a study right now 
under way that looks at the question of nuclear versus 
conventional propulsion. And some of the information I will 
give here, you know, it is preliminary; we haven't sent the 
study through our review process so far. But the increased 
capital costs to a nuclear-powered ship can be anywhere from 20 
percent to 50 percent higher initial upfront cost, depending on 
the size of the ship and the type of the ship that it is.
    And then you clearly save money over the long run by not 
having to pay for fuel, but the cost of the break-even point of 
that savings will vary from ship type to ship type. Like, for 
example, large amphibious ships and large surface combatants, 
which we are no longer planning to buy apparently, we would 
have broken even around $200 a barrel for oil based on our 
assessment so far, with other ships, smaller surface combatants 
and smaller amphibs, at a much higher, you know, oil price 
break-even point.
    So, depending on--and that is strictly on the cost side. 
Obviously, it gives you a number of tactical advantages, which 
Dr. Thompson referred to, that can be factored into that 
equation.
    Mr. O'Rourke. Just very briefly, I think Loren is correct 
in noting that the principal opportunity for introducing 
nuclear power into surface ships other than carriers was the 
CG(X). If the CG(X) is cancelled, then it becomes harder to 
find other programs that will present near-term opportunities 
for that. The only remaining area, I think, would be in terms 
of the large amphibious ships. And if we are sticking with the 
current designs of those ships, then you wouldn't necessarily 
have an opportunity to introduce nuclear propulsion there 
either.
    While we are waiting for the new CBO report to come out, it 
can be noted that the Navy performed a study on this issue in 
2006, at the request of Congress, very much at the request of 
this committee specifically. I have summarized the findings of 
those studies in a CRS report on the issue of nuclear 
propulsion for surface ships.
    And, basically, at the time, the Navy concluded that 
putting nuclear propulsion onto a larger surface combatant 
would increase its upfront procurement costs, other things held 
equal in that ship's design, by several hundred million 
dollars. I think it was something in the range of $700 million. 
And the Navy calculated a break-even price for oil on a 
lifecycle basis, as Eric mentioned. And the break-even analysis 
is summarized in the CRS report.
    But the main point is that, if you don't have a CG(X), then 
you don't have a near-term program for thinking about putting 
nuclear power more widely into the surface fleet anymore.
    Mr. Coffman. Okay. The last question is, if the QDR does 
reflect the Navy's point of view about theater access versus 
forcible entry, what does that do to the Marine Corps's 
Expeditionary Fighting Vehicle program?
    Dr. Thompson. The short answer is that the Administration 
would like to kill it.
    There is a lot of maneuvers going on behind the scenes. In 
fact, I am not sure what the Marine Corps will do if it doesn't 
get the FV. There is no obvious alternative. It probably is 
going to perform a lot better.
    But I think a political decision has been made that this is 
one of the programs they are going to target. So what they are 
really looking for now is some excuse, in other words, some 
failure in the reliability testing that will provide the venue 
or the vehicle for allowing them to kill it. They all know that 
there is no real alternative to the thing, but they have 
decided that they don't want it to continue.
    Mr. Coffman. Anyone else?
    Mr. Chairman, thank you very much. I yield back.
    Mr. Taylor. The Chair now recognizes the gentleman from 
Connecticut, Mr. Courtney, five minutes.
    Mr. Courtney. Thank you, Mr. Chairman.
    Dr. Thompson, you, I think, did a nice job about laying out 
the challenge of funding the SSBN production and, you know, 
what pressures that puts on the rest of the program. And you 
talked about paying for development and procurement outside of 
the naval shipbuilding account. I mean, is there any precedent 
for that? How do you envision, sort of, doing that?
    Dr. Thompson. Well, you know, we pay for most of our 
nuclear weapons in the Department of Energy in a completely 
separate budget item. What is it? I don't know remember what 
the exact budget number is, but it is even a different Cabinet 
department. And we have been doing it that way since the 
beginning of the Cold War.
    The problem that we have here is that we are expecting 
tactical and one service or two mission services to be traded 
off against national survival-level missions, and it is an 
apples-to-oranges comparison. I see this happen in the Air 
Force all the time because they are responsible for the spy 
satellites, they are responsible for the intercontinental 
ballistic missiles (ICBMs), and so on. And, yet, they have to 
trade that them off against, do I want more F-22s? And guess 
what decision they usually make? It is a bad way to do 
tradeoffs.
    And I think if we took this handful of national missions 
that are absolutely crucial, like nuclear deterrence, and put 
them in a separate category and funded them as if they were a 
first priority independent of intra-service tradeoffs, we would 
probably get a better outcome.
    I might mention parenthetically that in my two associates' 
prepared remarks the point comes up that, if we were to do that 
while leaving the planned shipbuilding budget at the level 
currently expected, in other words, around $15 billion, but we 
took SSBN(X) out and treated it separately, we would probably 
solve most of our forward shipbuilding problems.
    Mr. Courtney. So, when the QDR comes out, which, I mean, as 
you point out, one of the predictions is that the triad is 
going to become less of a triad and more of a--I would guess 
that would be the opportunity----
    Dr. Thompson. Correct.
    Mr. Courtney [continuing]. To really, sort of, pose the 
question about, well, okay, since we are creating a greater 
reliance on that platform, then maybe we have to recognize that 
by elevating it to a different place----
    Dr. Thompson. Correct.
    Mr. Courtney [continuing]. In terms of where you pay for 
it.
    Dr. Thompson. I mean, the bombers are already falling out 
of the force, and there is a significant likelihood that we 
will trade away a wing of ICBMs to the Russians to bring the 
numbers down. So you are left with something that doesn't 
really look like the triad. It is mostly Trident warheads.
    And, in a situation like that, you have to make certain you 
build the boat the right way and you have it ready at the right 
time. I think that is a strong argument for doing it 
differently than you would a new class of warships.
    Mr. O'Rourke. As an addendum to what Loren said and to 
answer your question about whether there was a precedent for 
treating things budgetarily this way, you can argue that 
ballistic missile defense is just such a precedent. That is not 
a service, that is a mission, and yet it is its own category in 
the defense budget that contains funding for BMD capabilities 
in various services.
    So if BMD has been separated out as a mission area for 
collocating a variety of spending that contributes to that 
mission, you can argue that that is a precedent for then taking 
strategic nuclear deterrence as a mission and then locating 
their variety of funding from various services that contributes 
to that mission, so that the spending of that can be optimized 
at the mission level rather than having it separated down into 
the services where it competes against the other missions of 
those individual services.
    Mr. Courtney. And so, Ron, is that, you know, sort of, an 
Appropriations Committee sort of task, or is it a policy 
committee--again, if you really wanted to, sort of, move 
forward with that kind of model?
    Mr. O'Rourke. I don't know that it is more one side of the 
House or the other, but it is something that the authorizers 
and the appropriators could have a dialogue on to see whether 
they wanted to have the budget restructured in that way.
    Dr. Labs. Just, because it wouldn't just apply to, 
obviously, the procurement accounts. You are talking about 
somewhere, you know, in the neighborhood of probably $8 billion 
to $10 billion in R&D before you even get to procuring the 
first ballistic missile submarine, which, in their own right, 
is going to be a $10 billion or $11 billion ship, the first 
one.
    Mr. Courtney. Well, I think as the chairman said, we are 
going to probably have this conversation at another hearing. 
And my time is running out, so thank you for your answers.
    Mr. Taylor. The Chair thanks the gentleman.
    To that point, Dr. Labs, I would hope at some point that we 
could have a conversation, again, for the Ohio replacement 
submarine that probably would not be delivered for 15 years. It 
is my understanding that the purpose of this follow-on vessel 
is to carry the D-5 missile, because the D-5 missile will not 
fit in the Virginia-class submarine. So this is a fleet that 
doesn't even start to get delivered until 2025.
    I think the question we need to ask right now is, is the D-
5 missile still going to be the missile that this Nation wants 
as our nuclear deterrent in 2025 and for 20 to 30 years beyond 
that? And I would welcome your thoughts on that.
    I would hate to build a replacement for the Ohio-class 
submarine built around the D-5 only to find out in 2025 it is 
no longer the missile that our Nation wants to build our 
nuclear deterrence around. And I would hope the Navy is looking 
into that, and I would ask your organization, as well, to give 
us some thoughts on that.
    Dr. Thompson. Mr. Chairman, there are some things the Navy 
is already doing in that regard. They actually are planning to 
make the tubes on the next-generation satellites slightly 
bigger than what a D-5 would require because their estimate is 
that circa 2040 they will need a different missile. They start 
with the D-5, but then they actually are considering moving to 
a bigger missile as a follow-on.
    Mr. Taylor. Okay. Whatever information you have along those 
lines, I would welcome, Dr. Thompson.
    The Chair now recognizes the gentleman from Rhode Island, 
Mr. Langevin.
    Mr. Langevin. Thank you, Mr. Chairman, and thank you for 
holding this hearing. It is very interesting and important at 
this time.
    And, gentlemen, I want to thank you for your testimony here 
today.
    My question is for the panel. With the possible deployment 
of anti-ship ballistic missiles, there is, I would say, a need 
for increased effectiveness of existing Aegis BMD ships and a 
new level of fleet protection. And I am sure that you are aware 
of the capability of the Cobra Judy Replacement ship. And I 
have been briefed that the augmentation of a platform like this 
with BMD capability can actually be used as a near-term, cost-
effective naval adjunct sensor.
    So can you speak to your assessment of this capability and 
how one or more of these ships could impact the number of BMD-
capable cruisers and destroyers we might need for this mission.
    Mr. O'Rourke.
    Mr. O'Rourke. Yes, actually, I have been following the 
proposal for doing something like that since I testified before 
this subcommittee in July of 2008. In that testimony, I 
referred to it as an ``adjunct radar ship.'' And there is a 
proposal from industry to build several of those ships to act 
as adjunct radars so that the radars on the surface combatants 
don't have to be as big.
    It may not necessarily reduce the numbers of cruisers and 
destroyers you need, but it would allow you to do the mission 
with cruisers and destroyers that had radars on them that are 
not as big as they would otherwise need to be because some of 
that radar burden is being picked up by these adjunct radar 
ships.
    So that proposal is out there. My understanding is that the 
Defense Department and the Navy have been made aware of it and 
that they have seen the outlines of it. I do not know what the 
status of that proposal is inside the Navy or DOD 
deliberations.
    Dr. Labs. My understanding is the same as Mr. O'Rourke's. 
We have often had briefings on the subject--or on occasion we 
have had briefings on the subject, and I wouldn't have anything 
more to augment to that.
    Dr. Thompson. There is a lot to be said for proliferating 
the sensors, because it means that any given radar no longer 
has to carry the full burden of doing the tracking. All I would 
say is that, if we are going to do this, I hope it is done 
outside the SCN budget, because one thing we don't need is 
another limited class of ships that, you know, cost more per 
unit than the other ships do.
    Mr. Langevin. Would this relieve the burden of the Aegis 
cruisers having to--we talked about, if they were part of the 
force defending the carriers, that they wouldn't necessarily be 
in the right place at the right time. So does that deal with 
that issue, that problem?
    Dr. Thompson. Depending on how they were deployed, it could 
make a significant difference in terms of how many Aegises you 
needed in a particular area of operations or what level of 
proficiency, what level capability each Aegis had to have. 
Because, as you put more sensors on the target, you collect 
more information. If you can net it and fuse it together, then 
the burden that any one ship has to carry is reduced.
    Mr. O'Rourke. It could also enhance the operational 
flexibility of the cruisers by allowing you to put them in a 
location that might be better in certain other ways for 
performing the ship's mission because it didn't have to 
necessarily be in some other location as it might have to be if 
it were really carrying the full burden of collecting the radar 
data.
    Mr. Langevin. Very good.
    There have recently been--this is on another topic--there 
have recently been comments from the Under Secretary of the 
Navy and other press reports indicate the Navy may be unable to 
achieve a sustained two-a-year production, two-a-year 
construction of the Virginia-class submarines starting in 2011 
due to cost pressures. I guess I would ask you, do you agree 
with that?
    And, also, what are the implications for the Navy's ability 
to meet combatant commanders' requests should the Navy not 
fulfill its two-per-year schedule? And what are the cost 
implications to this program as well as other shipbuilding 
programs for failing to increase production of the Virginia-
class submarine to two per year in 2011?
    Dr. Labs. Mr. Langevin, there are several implications of 
that. The press reports that we have seen so far indicate that 
the Navy did get a submarine put back in 2015. So that draft 
plan that they are looking at would have two per year, at least 
from 2011 to 2015. Now, beyond that, that would be a different 
story.
    The question of whether the--the cost implications if they 
don't achieve two a year is going to have--there are going to 
be several effects. The first effect would be that if you go 
back to having to build one submarine a year, that individual 
submarine is going to be a lot more expensive. It will increase 
the cost by on the orders of hundreds of millions of dollars.
    It will have a second effect of it will increase the costs 
of the nuclear-powered aircraft carriers that are being built 
at Newport News. Already the re-centering of the carrier 
program that was announced by Secretary Gates last spring to 5-
year centers adds a little cost to the submarines, on the order 
of $20 million to $50 million, according to the Navy. So, 
presumably, going back to one per year after 2015 is going to 
increase cost not only on the subs but also on the aircraft 
carriers as well.
    Dr. Thompson. If we were to build any fewer Virginia-class 
than two per year between now and 2025, then we would be 
looking at a force of less than 43 at the low point in 2028. 
Our warfighting requirement is for 48.
    Now, we can fill that gap in a variety of ways. I mean, 
they already have found some workarounds, like, for example, 
compressing the construction time so that they cannot go any 
lower. But every boat you take out of the sequence between now 
and 2025, any less than two per year and you go down to 42 and 
to 41, and you just can't cover the world. You have to decide 
someplace that is not going to be covered today.
    Mr. O'Rourke. Just very quickly, in terms of the cost 
impact, it is worth remembering that when the Navy was working 
toward the goal of getting the procurement costs of the 
Virginia class down to $2 billion each in 2005 dollars, that 
they had to take about $400 million out of the cost of the ship 
to do that. About half of that improvement, about $200 million, 
was achieved simply by going from one boat per year to two.
    So if you were to go from two boats per year back to one, 
you would expect that the cost of the ships would increase by 
roughly that same amount. So we are looking at something in the 
range of a $200 million increase in unit procurement cost in 
2005 dollars, which would be higher in today's dollars, should 
you go back down to one per year.
    In terms of the vulnerability of the procurement profile to 
being reduced to less than two per year, there are really three 
periods in question. One is between now and fiscal year 2013. 
And it seems to me that it is unlikely that you would fall off 
two per year between now and fiscal year 2013 because those 
boats are covered under a multiyear procurement plan, and 
dropping below two per year in that period would entail 
breaking that multiyear contract, which has a very significant 
termination liability attached to it.
    The second period is 2014 through 2018, when you are no 
longer under the current multiyear contract that calls for two 
per year. And I think during that period there is a fair amount 
of vulnerability for DOD or the Navy to look at taking a boat 
out every once in a while and dropping to something less than a 
solid two per year.
    And then an even higher period of vulnerability starts in 
fiscal year 2019, when we start building the new SSBN, because 
then at that point you run into this issue of the SSBN putting, 
potentially, very much pressure on the remainder of the 
shipbuilding budget, including the attack submarines.
    Mr. Langevin. Mr. Chairman, could I ask for clarification 
on one thing? I know my time----
    Mr. Taylor. Sure.
    Mr. Langevin. The Ohio Replacement Program, if I could, on 
cost, you--at least, Dr. Thompson, you said it is expected that 
they would run about $7 billion a copy and $85 billion for the 
fleet of Ohio replacements.
    Can you talk about how that figure was arrived at? Was that 
based on paying for it individually, one at a time, or was that 
assuming a bulk buy, if you would, of the Ohio replacements?
    Dr. Thompson. Dr. Labs and Mr. O'Rourke both cited similar 
numbers, $6 billion to $7 billion per ship, in their prepared 
statements. The Navy's actual internal estimate is $15 billion 
for R&D, $10 billion for the lead ship, and then $5 billion for 
each ship thereafter.
    Dr. Labs. Mr. Langevin, the $7 billion figure and the $85 
billion was in my prepared statement as a CBO estimate. We 
determined that by not using a bulk buy or a multiyear 
procurement process, but we did give them the benefits of, in 
effect, a rate effect of assuming that at least one attack 
submarine was being built in the yard or under a teaming 
arrangement, like we are building attack submarines today, each 
year that a new boomer was being built.
    And then the estimates were based on adjustments for 
inflation in terms of the time period that we are building it 
based on Virginia-class analogies adjusted for a larger-class 
submarine, a larger weight.
    Mr. Langevin. And if it were a multiyear procurement buy, 
would that number come down significantly?
    Dr. Labs. I would have to go back and sort of, take a look 
at that in comparison to what has happened with Virginia class. 
There would certainly be some degree of savings in that, but I 
couldn't tell you off the top of my head how much that would 
be.
    Mr. Langevin. Could you do that and get back to the 
committee?
    Dr. Labs. Sure.
    Mr. O'Rourke. Just as a quick addendum to what Dr. Labs has 
testified, the SSBN(X) would not be, under current law, 
eligible for a multiyear procurement through the first few 
ships in the program, because you need to establish design 
stability as a statutory requirement for qualifying for 
multiyear procurement (MYP).
    But for the first few ships in the program, you could use a 
block buy, as was done for the first few ships in the Virginia 
class. And the savings on the Virginia-class block buy were in 
the range of about five percent. If it was an augmented block 
buy that also had Economic Order Quantity (EOQ) authority, 
which was not the case in the Virginia block buy, it could be 
something north of 5 percent. Later on in the program, when you 
get into a real multiyear procurement thing the savings might 
be more, closer to 10 percent.
    Mr. Langevin. Thank you, Mr. Chairman. I yield back.
    Mr. Ortiz [presiding]. Ms. Pingree.
    Ms. Pingree. Thank you, Mr. Chair.
    And thank you for your testimony today. It has been very 
enlightening to me. As a freshman Member, I always have a lot 
to learn, and I appreciate all of your perspective on this.
    I just have one question, again, kind of a procurement 
question. We have been talking a lot about the dependence on 
the DDG-51s. And I will start with Mr. O'Rourke, but if anybody 
else has a comment, I am interested to learn.
    You have said in recent years that the Navy, particularly 
with this increased dependence, needs to procure at least three 
DDG-51s per year in order to match and meet the required force 
structure levels. In the past, you have based this assessment 
on historical data detailing the useful service life of major 
surface combatants and the minimum level of investment needed 
to maintain the Nation's surface combatant industrial base.
    Several Navy reports on industrial base have also noted 
that, in order to maintain two major surface combatant 
shipyards, a minimum of three DDG-51s must be procured each 
year, along with additional work in the yards.
    So my question, and particularly given that I have one of 
those yards in my district and we are interested in industrial 
capacity, and I know that is something that is important to the 
Chair, as well: If the DDG-51 procurement rate going forward is 
below three ships a year, what impact will that have on the 
Navy's ability to sustain a major surface combatant force and 
maintain a strong industrial base?
    I know we have talked around this a little bit, but I just, 
kind of, want to go over this again to talk about these 
specific numbers.
    Mr. O'Rourke. All right. The rate that is reportedly in the 
plan is one and a half ships per year.
    Ms. Pingree. That is what we understand.
    Mr. O'Rourke. And at least half of that, if not more than 
half of that, would need to go to Bath Iron Works if Bath were 
to operate at a level commensurate with what it has had in 
recent years.
    In terms of the impact on the industrial base generally, 
which includes both Bath and the Ingalls yard down on the Gulf 
Coast, the impact would depend also on how much amphibious 
shipbuilding there is, because that is work that would add to 
the workload, especially down at the Gulf Coast yards. And this 
plan does not have very many amphibious ships in it.
    And that is one reason why I tried to signal that in the 
five-year plan there is an issue with the amount of surface 
ship work. And, in particular, in the five-year plan, it 
relates to the amphibious ships in the Gulf Coast yards. But in 
the 30-year plan, it also relates to the scenario that happens 
if the Navy has to pay for the SSBNs out of hide. Because that 
drives down many of the other shipbuilding programs into one-
per-year rates. In fact, as I have said at times in the past, 
it turns the Navy's plan into a digital shipbuilding program; 
it has nothing but ones and zeros in it.
    And that rate is sustained in that scenario for a long 
enough period of time that I think that would make a 
consolidation of some kind of the surface ship industrial base 
a distinct possibility, if not a likelihood.
    Ms. Pingree. Uh-huh. Which is certainly a reduction in our 
industrial capacity.
    Mr. O'Rourke. Yes.
    Dr. Labs. The alternative to that, if it does not--and I 
would agree with Mr. O'Rourke. I think a long run where you are 
building one DDG-51 equivalent per year would lead to some kind 
of consolidation. But if it didn't, it would certainly lead to 
a much higher unit cost for those ships because you are paying 
for a lot more overhead on one ship as opposed to spreading it 
over a number of ships.
    Dr. Thompson. Well, if we knew 10 years ago what we know 
now, we wouldn't have built any DDG-1000s and we would have 
built three or four DDG-51s in various upgraded variants 
instead. And we would be doing it now and well into the future.
    Bath is not going to suffer. If the Navy had its way, it 
would send all the surface combatants to Bath. But in the 
current----
    Ms. Pingree. We appreciate you saying that.
    Dr. Thompson. Oh, well, that is what the Navy tells me.
    Ms. Pingree. I am sure the Chair would differ, but I 
appreciate it.
    Dr. Thompson. But, however----
    Mr. Taylor [presiding]. Whoa, whoa, whoa. Mr. Thompson, I 
am sorry, you are just way out of line.
    Dr. Thompson. I am merely characterizing----
    Ms. Pingree. We know Secretary Mabus would never let that 
happen.
    Dr. Thompson. As a matter of fact, he has been quite vocal 
on maintaining the industrial base, so you are right about 
that.
    But I think, as a practical matter, Bath probably is not 
looking at any serious shortfall in workload going forward, 
given the fact that it has all of the Zumwalt class and will 
get some of the DDG-51s.
    Ms. Pingree. Thank you.
    You know, I am going to regret asking a stupid question, 
but what do you mean when you say ``out of hide''?
    Mr. O'Rourke. It means you have to pay for the SSBNs within 
your budget without an offset----
    Ms. Pingree. Oh, so taking it out of your hide.
    Mr. O'Rourke. Uh-huh.
    Ms. Pingree. Got it.
    Mr. O'Rourke. That you don't get an offsetting increase to 
your budget to help pay for it, whether that increase is within 
the shipbuilding account or within a new specialized account 
elsewhere in the DOD budget, that you have to absorb it along 
with everything else that you were already planning on doing.
    Ms. Pingree. Got it. Thank you very much.
    Thank you, Mr. Chair.
    Mr. Taylor. The Chair thanks the gentlewoman.
    And since we are coming upon the season of Lent, the Chair 
is going to try to be forgiving to the gentleman from New 
England for making a very reasonable remark, however 
inaccurate.
    The Chair now recognizes the gentleman from New York, Mr. 
Massa.
    Mr. Massa. Thank you, sir.
    I was interested to just hear the statement, ``If we knew 
10 years ago what we know now, we probably would have not 
purchased any DDG-1000s.'' And, for the record, at least one 
member of this committee did, in fact, know 10 years ago what 
we know now and, in other capacities, was incredibly verbal in 
opposition to that ship class, an opposition I continue to be 
verbal on.
    We built the two command ships based on a previous 
generation of amphibious hulls. Is it outside the box, Mr. 
O'Rourke, to consider using LPD-17 platform to replace those 
two command ships?
    Mr. O'Rourke. It is not outside the box at all. In fact, 
there have been multiple press articles over the last year or 
two about how the Navy is considering, or was at least at one 
point considering, using either the LPD-17 hull or the T-AKE 
(Auxiliary Cargo (K) and Ammunition (E) Ship) hull as the basis 
for a new command ship.
    I think if you have a command ship in the program, that 
would continue to be the Navy's going-in way of looking at the 
issue. But it appears now that, under fiscal pressures, that 
the command ship has dropped out of the Navy's program 
entirely, in which case the question doesn't arise anymore.
    Mr. Massa. And your estimate on the remaining hull life on 
the two command ships, Mount Whitney and Blue Ridge, that we 
currently have?
    Mr. O'Rourke. I would have to see when they were 
commissioned. I actually haven't looked at that lately. But 
they are not young.
    Mr. Massa. Commensurate with my birth. So you are correct.
    Dr. Labs, we have had a lot of conversation today about 
ballistic missile defense and a fundamental re-shift in 
national strategy that has a tremendous impact on the U.S. Navy 
fleet. We have also talked a lot about in-hide/out-of-hide for 
SSBNs. Is it not true that ballistic missile defense is a 
national defense priority and not a naval defense priority?
    Dr. Labs. I think it is reasonable to characterize 
ballistic missile defense that way. And, certainly, many 
observers, you know, do so.
    Mr. Massa. Since the construction of all land-based and 
aerial activities associated with ballistic missile defense did 
not come out of those services' hides, is it not, therefore, at 
least argumentative that we should examine other funding 
streams for this series of constructions of enhanced Burke-
class destroyers as we are discussing enhanced funding streams 
for strategic ballistic defense submarines?
    Dr. Labs. I would certainly agree that it is reasonable to 
look at alternative funding streams for that purpose.
    Mr. Massa. So you wouldn't consider that to be an 
irrational consideration?
    Dr. Labs. No, sir, I would not consider that to be an 
irrational consideration.
    Mr. Massa. All right. Thank you.
    To my good friend with regional concerns from New England, 
you obviously are very, very focused on and very knowledgeable 
about submarine fleets, and I welcome that.
    What is your vision of what we are going to do to replace 
the three that I know of, and perhaps more, special mission 
submarines that are currently extant in the force? Have you 
heard or seen, has anyone discussed, are we are going to go do 
that with serial productions with enhanced hulls that we are 
going to take out of the current, or is Carter and her fellow 
hulls going to just live forever?
    Dr. Thompson. Well, in the case of the Seawolf class, this 
is sort of a nightmare to maintain, because it is a unique 
class of three ships, and doing spare parts and sustainment is 
very expensive.
    Over the long term, the logical solution would be to build 
a variant of the Virginia class. I fully expect Virginia class 
to go beyond 40 ships anyway, so that would be the logical way 
to go. Given the other constraints, particularly in the 
undersea ship construction part of the SCN budget, I don't 
think we could really afford any alternative to that.
    Mr. Massa. Is it out of the box to consider that perhaps 
the three one-of-a-kind Carter-class submarines can act as 
escorts for the three one-of-a-kind Zumwalt-class DDG-1000 
surface combatants?
    Dr. Thompson. Could you say that again?
    Mr. Massa. Since we are into building three of a kind, the 
Carter class and the Zumwalts, for which nobody knows what we 
are going to do with those anyway, perhaps there is some 
synergy in combining those two shipbuilding programs that I 
would consider to be somewhat less than successful.
    But one last specific question as far as submarines go. We 
haven't discussed at all today surface infrastructure--in other 
words, bases, where we are going to put everything. Obviously, 
the Navy is operating under some incredible fiscal constraints, 
and that is only going to get worse.
    In a perfect world, it would be nice to park a nuclear 
aircraft carrier anywhere. In a non-perfect world, does it make 
sense to spend almost as much money on creating a new nuclear-
capable homeport as it does building a nuclear-capable ship?
    Dr. Thompson. I might be able to make the strategic case 
for Guam but not for Florida.
    Mr. Massa. So you would, from your expert opinion, question 
the allocation of significant dollar bills into nuclearizing, 
for lack of a better word, all of the infrastructure necessary 
in a northern Florida port, specifically in Mayport?
    Dr. Thompson. I wouldn't question it. It is a waste of 
money. I already know the answer: It is a waste of money.
    Mr. Massa. So that is relatively frank speaking in a 
building that is not used to relatively frank speaking.
    Dr. Thompson. You know, we are spending $4 billion a day in 
this government that we do not have. And, meanwhile, our share 
of global GDP has fallen from 32 percent to 24 percent in one 
decade. So, to spend that kind of money to get no additional 
gain in terms of military capability is bordering on the 
scandalous.
    Mr. Massa. Mr. O'Rourke, you and I have had a relationship 
that spans now more than a decade, and we have engaged in 
tabletop intellectual conversations about the Navy for some 
time. And yet here we are with three DDG-1000s of which will 
have no general ship fleet purpose and some 52 LCSs that will 
need to be refueled every 48 hours if they operate at any 
operation tempo (OPTEMPO) necessary.
    Is there anything at all in the budget with respect to 
looking at things like tankers?
    Mr. O'Rourke. You mean tanker ships as opposed to----
    Mr. Massa. Well, unless someone has figured out a way of 
aerial refueling the LCSs.
    Mr. O'Rourke. You mean oilers.
    Mr. Massa. Thank you.
    Mr. O'Rourke. The Navy does have a downstream plan to 
replace the current oiler fleet. And reportedly in the press 
reports that came out last year, the Navy for a time was 
looking at bringing forward the start of the new oiler program 
and combining it with what had been the MLP program into some 
kind of combined TAO-MLP.
    In the most recent reporting about the Navy shipbuilding 
plan, that idea has once again been set aside. And the Navy is 
proposing to build a reduced-cost Mobile Landing Platform 
(MLP), and the TAO is now once again out beyond the end of the 
FYDP.
    Mr. Massa. Thank you very much, gentlemen. I always 
appreciate your insights and inputs.
    And, Mr. Chairman, that calls it for the day.
    Mr. Taylor. The Chair recognizes the gentleman from 
Virginia, Mr. Forbes.
    Mr. Forbes. Mr. Chairman, I don't have any additional 
questions.
    I just want to thank each of you gentlemen for being here. 
We appreciate your expertise and your willingness to share that 
with us.
    Mr. Chairman, I yield back.
    Mr. Taylor. Thank you.
    Gentlemen, I guess my parting thoughts would be--and I want 
to thank all of you for being here.
    Mr. Thompson, I am going to try to forget that incredibly 
inappropriate remark.
    But the biggest concern is--and I have also been very 
fortunate to know Mr. O'Rourke for a while. You know, for at 
least 10 years, Chiefs of Naval Operations (CNOs) have come 
before this committee saying the ideal fleet is 313 ships. And 
under both Democratic and Republican Administrations, what they 
say they need and what the Administration asks for have never 
matched up. Not one President that I have served with has asked 
for a minimum of 10 ships. And given the 30-year expected life, 
10 times 30 gets you to that 300-plus-ship Navy.
    Having seen the disconnect between what the Navy says they 
want and what the Administrations, be it the Democrats or 
Republicans, ask for, I have some very serious concerns that 
the President's plan to put our Nation's missile defense on 
ships is not going to be followed up with the proper budget 
request.
    And I realize we don't live in an ideal world. I realize 
that no one could have envisioned six, seven years ago that we 
would spend $24 billion on mine-resistant vehicles. On the flip 
side, I think every penny of that was worthwhile because kids 
are coming home alive that would have died needlessly, lost 
their limbs needlessly. So we recognized the vulnerability, I 
regret to say, too late, but we did recognize that 
vulnerability. We took the steps to keep people from dying 
needlessly. And those vehicles that worked well in Iraq are now 
being retrofitted and on their way to Afghanistan.
    So that is $24 billion that will not be available. I am 
also aware that, depending on who you ask, $12 billion to $14 
billion a month is being spent on those two conflicts. Again, 
when I got here in 1989, I don't think too many people saw us 
in a land war in Iraq and Afghanistan. Those things happened.
    So, given the realities of the world, but also given, as 
Mr. Thompson pointed out, things we don't expect to happen do 
happen, and we don't have the luxury of saying, ``Gee, we 
didn't see it coming,'' particularly if it is a nuclear missile 
attack coming from someone we didn't expect any time we didn't 
expect against our Nation, what should we be spending this year 
to start putting that nuclear defense from the sea into place?
    I realize I have just laid out the realities of the world, 
but what should we be spending, starting this year, to make the 
plan that the President announced work?
    And, by the way, since all of you have spoken very freely, 
if you don't think we ought to be putting our Nation's missile 
defense on ships, say so now.
    Dr. Thompson. Virtually any attack on the United States is 
going to come over an ocean. And that means having the 
deployability, the flexibility of putting the defenses at sea, 
at least one of the layers, makes a lot of sense strategically 
and operationally.
    We are not going to get much mileage out of the Zumwalt 
class. So I think we have to move on to thinking about, well, 
how many DDG-51s do we need? At the very least, we should be 
building three a year in the upgraded configuration, maybe 
four. But I am not sure, as you pointed out in your own 
remarks, that the Administration has thought this all the way 
through yet.
    Mr. Taylor. Dr. Labs.
    Dr. Labs. Mr. Chairman, as you know, as a CBO analyst I am 
not in a position to make policy recommendations. But that 
being said, if you are----
    Mr. Taylor. But, Dr. Labs, I think you are off the hook 
because we asked your opinion.
    Dr. Labs. Thank you, Mr. Chairman. My performance review is 
coming up in two weeks. I am not sure----
    Mr. Taylor. I would remind the gentleman that no money may 
be drawn from the Treasury except by an appropriation by 
Congress.
    Dr. Labs. Thank you, Mr. Chairman.
    If you decide that you want three ballistic missile 
stations in Europe at sea and you want to maintain and you want 
to populate those stations more or less on a continuous basis 
or something close to it, then you are going to need in the 
neighborhood of what we were talking about, the three to five 
ships per station.
    So, depending on how fast you want to get there, you would 
need to start adding ships into your shipbuilding plan pretty 
much as soon as the acquisition system can accommodate them. 
Meaning that, if you add money this year, you may not be able 
to buy the ship immediately, but maybe you can; it kind of 
depends on what the capacity is that the Navy currently has 
available to add ships to the program.
    Mr. Taylor. So, in specific numbers--and, again, I realize 
we are not living in an ideal word--in specific numbers, how 
many ships should we be asking for this year for that purpose?
    Dr. Labs. Well, given that the Navy is already planning--
has already got the Zumwalts being built at Bath, are planning 
to request for one DDG-51 this year, certainly doubling that 
procurement rate would be the first logical step that I would 
take if you were trying to achieve that level of capacity, you 
know, say, by about 2018 or so.
    Mr. Taylor. Mr. O'Rourke.
    Mr. O'Rourke. I am under the same strictures that Eric is 
about making policy recommendations. But if the issue is trying 
to meet the near-term pressure for BMD capability in Europe, 
then the steps that you might want to look at, in terms of 
their ability to produce capability in the shorter run, there 
are two. And one of those would be to fund the modernization of 
existing 51s at whatever maximum capacity----
    Mr. Taylor. You had given us the amount of, what, $54 
million? Is that what you said, sir?
    Mr. O'Rourke. I think it is $40 million to $45 million, the 
last time the Navy asked.
    Mr. Taylor. Okay. And are you pretty confident of that 
number, since we don't have a very good track record of coming 
in under budget?
    Mr. O'Rourke. That answer is several months old, so it is a 
little bit higher. But the Navy has already had some experience 
in doing this, so I think there is less risk in that number 
than there would be in building a lead ship, for example.
    Mr. Taylor. Okay.
    Mr. O'Rourke. So it may be something higher than $40 
million to $45 million.
    But if you are trying to find ways to generate BMD 
capability in the short run to meet a demand that has appeared 
for BMD capability as a result of the Administration's new 
plan, then one option would be to look at funding the 
conversions of existing 51s into a BMD configuration at 
whatever annual rate both funding and industrial capacity could 
support.
    And the other would be to put additional money into the 
procurement of SM-3 missiles. Because the inventory of those is 
fairly low, and once you put money into that, those missiles 
will appear two to three years later.
    If you want to solve a longer-term problem about having BMD 
capability, then that is what construction of new ships can 
handle. But construction of new ships, putting that into the 
budget now will not produce a new ship until about five years 
from now. If what you are really concerned about handling first 
is this near-term problem, then it is conversions and 
procurement of SM-3 missiles that are the options that could 
address such a concern within that time frame.
    Dr. Thompson. If I could just reiterate something I said 
earlier, if we just modernize at the current standard, it won't 
do us much good in terms of defending the United States or 
other countries that are being attacked by intermediate- or 
long-range missiles. Because the standard that we are 
modernizing to right now is for short- or medium-range missiles 
with relatively simple warheads--in other words, the sort of 
thing that Iran might do in its first generation of offensive 
weapons.
    If we want to defend the United States or, say, Japan 
against a longer-range missile, then we are talking about step 
three or step four of the plan that the Administration 
announced in September, rather than step one, which is what we 
are doing now.
    Mr. Taylor. For the panel, what is your understanding on 
the modification of an existing DDG-51 to a theater missile 
defense configuration? What is the timeline on that, best-case 
scenario, worst-case scenario?
    Mr. O'Rourke. My understanding is that is being done now as 
a part of the general modernizations of the existing 51s. And 
those modernizations are, the last time I checked, being 
accomplished through a two-part plan of roughly 12 months' 
duration between the two parts, where the ship comes in and has 
some hull, mechanical and electrical (HM&E) upgrades for 
roughly 6 months and then comes in at a later point for combat 
system upgrades, again another 6 months or so. And, presumably, 
the BMD work would be done principally during the second of 
those two modernization periods.
    And so, after about 12 months of work, which would take 
more than 12 months to accomplish because of the time in 
between those two periods, at the end of that process you now 
have a DDG-51 that is modernized in various ways, including the 
addition of a BMD capability.
    Mr. Taylor. Thank you.
    Are there additional questions for the panel?
    Mr. Forbes. Mr. Chairman, the only thing----
    Mr. Taylor. Mr. Forbes.
    Mr. Forbes [continuing]. I would like to comment on is that 
your remarks about Mr. Thompson's statement about Bath may have 
been a little bit off, but he was right on the money on 
Mayport. And so we want to make sure that we get that down for 
the record.
    Mr. Taylor. So noted.
    Mr. Coffman.
    Mr. Coffman. No.
    Mr. Taylor. Ms. Pingree.
    Mr. Massa.
    Ms. Pingree, I would remind you that I really wasn't a 
proponent of that third 1000, so we--but anyway.
    Ms. Pingree. I appreciate that, sir.
    Mr. Taylor. But, again, we thank you very, very much. I 
think we all think this hearing could have been much, much 
better had the Navy been here today, but I think you gentlemen 
did a fine job. Thank you.
    We stand adjourned.
    [Whereupon, at 4:59 p.m., the subcommittee was adjourned.]
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