[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]



                         [H.A.S.C. No. 112-131]

    THE NAVY'S 30-YEAR SHIPBUILDING PLAN: ASSUMPTIONS AND ASSOCIATED

                       RISKS TO NATIONAL SECURITY

                               __________

                                HEARING

                               BEFORE THE

              SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS

                                 OF THE

                      COMMITTEE ON ARMED SERVICES

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                              HEARING HELD

                             APRIL 18, 2012









                      U.S. GOVERNMENT PRINTING OFFICE

  74-472                   WASHINGTON : 2012
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              SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS

                    ROB WITTMAN, Virginia, Chairman
K. MICHAEL CONAWAY, Texas            JIM COOPER, Tennessee
MO BROOKS, Alabama                   ROBERT ANDREWS, New Jersey
TODD YOUNG, Indiana                  MARK S. CRITZ, Pennsylvania
TOM ROONEY, Florida                  COLLEEN HANABUSA, Hawaii
MIKE COFFMAN, Colorado
               Michele Pearce, Professional Staff Member
                 Paul Lewis, Professional Staff Member
                     Arthur Milikh, Staff Assistant









                            C O N T E N T S

                              ----------                              

                     CHRONOLOGICAL LIST OF HEARINGS
                                  2012

                                                                   Page

Hearing:

Wednesday, April 18, 2012, The Navy's 30-Year Shipbuilding Plan: 
  Assumptions and Associated Risks to National Security..........     1

Appendix:

Wednesday, April 18, 2012........................................    21
                              ----------                              

                       WEDNESDAY, APRIL 18, 2012
THE NAVY'S 30-YEAR SHIPBUILDING PLAN: ASSUMPTIONS AND ASSOCIATED RISKS 
                          TO NATIONAL SECURITY
          STATEMENTS PRESENTED BY MEMBERS OF CONGRESS

Cooper, Hon. Jim, a Representative from Tennessee, Ranking 
  Member, Subcommittee on Oversight and Investigations...........0 deg.
Wittman, Hon. Rob, a Representative from Virginia, Chairman, 
  Subcommittee on Oversight and Investigations...................     1

                               WITNESSES

Cropsey, Seth, Senior Fellow, Hudson Institute...................     3
Eaglen, Mackenzie, Resident Fellow at the Marilyn Ware Center for 
  Security Studies, American Enterprise Institute................     8
O'Rourke, Ronald, Defense Policy and Arms Control Section, 
  Congressional Research Service.................................     2

                                APPENDIX

Prepared Statements:

    Cropsey, Seth................................................    52
    Eaglen, Mackenzie............................................    62
    O'Rourke, Ronald.............................................    27
    Wittman, Hon. Rob............................................    25

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.]

 
THE NAVY'S 30-YEAR SHIPBUILDING PLAN: ASSUMPTIONS AND ASSOCIATED RISKS 
     TO NATIONAL SECURITY

                              ----------                              

                  House of Representatives,
                       Committee on Armed Services,
              Subcommittee on Oversight and Investigations,
                         Washington, DC, Wednesday, April 18, 2012.
    The subcommittee met, pursuant to call, at 3 p.m., in room 
2118 Rayburn House Office Building, Hon. Rob Wittman (chairman 
of the subcommittee) presiding.

 OPENING STATEMENT OF HON. ROB WITTMAN, A REPRESENTATIVE FROM 
       VIRGINIA, CHAIRMAN, SUBCOMMITTEE ON OVERSIGHT AND 
                         INVESTIGATIONS

    Mr. Wittman. Ladies and gentlemen I will call to order the 
Subcommittee on Oversight and Investigations of the House Armed 
Services Committee. I would like to welcome everybody to 
today's hearing on the assumptions and risks associated with 
the Navy's 30-year shipbuilding plan and the consequent impact 
on national security.
    Today we are going to be honored to hear from Mr. Ron 
O'Rourke with the Defense Policy and Arms Control Section of 
the Congressional Research Service. Mr. O'Rourke, thank you for 
joining us. Mr. Seth Cropsey, a Senior Fellow at the Hudson 
Institute. Dr. Cropsey, appreciate you joining us. And also Ms. 
Mackenzie Eaglen, a Resident Fellow at the Marilyn Ware Center 
for Security Studies at the American Enterprise Institute. 
Thanks, Ms. Eaglen, and thank you so much again for joining us.
    Again, I want to thank you all so much for taking the time 
out of what I know are busy schedules to help our committee 
better understand the implications of our 30-year plan for Navy 
force structure, our defense industrial base and, most 
importantly, our national security. I couldn't be more pleased 
to have such distinguished scholars participating in today's 
hearing.
    Before we get started I have a quick administrative matter 
to address. I anticipate a number of members from other 
subcommittees will join us. And I would like to ask for 
unanimous consent that they be allowed to participate.
    Absent any objection, it is so ordered. And I will 
recognize these members at the appropriate time for 5 minutes 
after all O&I Subcommittee members have had an opportunity to 
question the witnesses.
    At this particular time I will turn it over to our ranking 
member, Mr. Jim Cooper from the great State of Tennessee. Mr. 
Cooper.
    [The prepared statement of Mr. Wittman can be found in the 
Appendix on page 25.]
    Mr. Cooper. Thank you, Mr. Chairman. I appreciate you 
holding this hearing. I have no opening statement and I look 
forward to the testimony of the witnesses.
    Mr. Wittman. Very good. With that we will begin with our 
witnesses. Mr. O'Rourke, we will let you begin.

 STATEMENT OF RONALD O'ROURKE, DEFENSE POLICY AND ARMS CONTROL 
            SECTION, CONGRESSIONAL RESEARCH SERVICE

    Mr. O'Rourke. Thank you, Chairman Wittman, Ranking Member 
Cooper, distinguished members of the subcommittee. Thank you 
for the chance to speak today on assumptions and risks to 
national security of the new 30-year shipbuilding plan. With 
your permission I would like to submit my statement for the 
record and summarize it here with a few brief remarks.
    The subcommittee is familiar with the Navy's goal for a 
fleet of 313 ships. The 30-year plan presents a new and 
slightly revised goal for a fleet of about 310 to 316 ships. 
This slightly revised goal is an interim number that may be 
refined further when the Navy completes its force structure 
assessment.
    Navy officials have testified at least twice this year that 
a Navy of more than 500 ships would be required to fully meet 
combatant commander requests for Navy forces. The difference 
between a fleet of 500 ships and a fleet of about 310 to 316 
can be viewed as one measure of the operational risks 
associated with the goal of a fleet of about 310 to 316 ships. 
A goal for a fleet of more than 500 ships might be viewed as a 
fiscally unconstrained goal.
    The new 30-year plan includes a total of 268 ships to be 
procured. Like previous 30-year plans, the new 30-year plan 
would result in a fleet that would not fully support all 
elements of the Navy's ship force structure goal. The 
distribution of the 268 ships over the 30-year period, combined 
with the age composition of the Navy's existing ships, results 
in a projected fleet that would remain below 310 ships during 
the entire 30-year period. The fleet would experience 
shortfalls in various years in ballistic missile submarines, 
cruisers, destroyers, attack submarines, and amphibious ships.
    The projected shortfall in ballistic missile submarines is 
new with this plan and results from a 2-year deferral in the 
start of Ohio replacement procurement. The projected shortfalls 
in cruisers, destroyers, and attack submarines are smaller than 
they were under last year's plan due to a reduction in the 
cruiser, destroyer force-level goal and the insertion of 
additional destroyers and attack submarines into the 30-year 
plan.
    Although the projected cruiser, destroyer, and attack 
submarine shortfalls are smaller under the new 30-year plan 
than they were under last year's plan, these shortfalls, and 
the ones projected for ballistic missile submarines and 
amphibious ships, could make it difficult for the Navy to fully 
perform its projected missions in certain years. A key 
potential oversight issue for Congress concerns whether the 
Navy in coming years would be large enough under the 30-year 
plan to adequately counter improved Chinese maritime anti-
access forces while also adequately performing other missions 
of interest to U.S. policymakers.
    The 30-year plan reflects assumptions concerning ship 
service lives, ship procurement costs, and projected 
shipbuilding funding levels. If ships are retired earlier than 
planned, or ship procurement costs turn out to be higher than 
estimated, or if funding levels for shipbuilding turn out to be 
lower than projected, then the Navy in certain years will have 
fewer ships than shown in the 30-year plan. This could make it 
more difficult for the Navy to fully perform its projected 
missions in certain years. It might also reduce the Navy's 
ability to deter regional aggression in certain years, which in 
turn could increase the likelihood of a conflict that could 
require Navy combat operations.
    In terms of gauging risks, it can be noted that the Navy in 
recent years has for various reasons retired certain ships well 
before the ends of their service lives; that certain 
shipbuilding programs may pose a risk of cost growth; and that 
the shipbuilding plan assumes a funding hump in the middle 10 
years of the plan that is 26 percent higher than the average 
for the first and last 10 years of the plan.
    Congressional review to date of the Navy's fiscal year 2013 
budget has included some discussion of near-term options for 
adding ships to the plan and reducing ship unit procurement 
costs. These options include adding a second Virginia class 
submarine in fiscal year 2014, adding a 10th ship to the 
proposed DDG-51 multiyear, and procuring the aircraft carrier 
CVN-79 and -80 under a block-buy arrangement. I would be happy 
to discuss these options or others with the subcommittee.
    Mr. Chairman, this concludes my testimony. Thank you again 
for the chance to speak on this issue. And I will be pleased to 
respond to any questions that the subcommittee might have.
    [The prepared statement of Mr. O'Rourke can be found in the 
Appendix on page 27.]
    Mr. Wittman. Very good. Thank you so much, Mr. O'Rourke, 
for your testimony. We look forward to the questioning portion 
of this hearing.
    And with that, Dr. Cropsey, we will turn to you.

   STATEMENT OF SETH CROPSEY, SENIOR FELLOW, HUDSON INSTITUTE

    Dr. Cropsey. Chairman Wittman, Ranking Member Cooper, and 
other members of the committee, I am honored by your request to 
speak before this committee. The United States, like other 
great maritime nations in history, became a seapower because 
its geography coincided with the enterprising commercial spirit 
of our people. John Adams understood this link. He wrote that 
``the Great Questions of commerce and power between nations 
must be determined by sea,'' that ``all reasonable 
encouragement should be given to a navy.''
    Adams said ``Great Questions.'' Like the other Founders, 
even those who doubted American seapower, Adams expected 
America to become a great nation. He was first among the 
Founders in grasping the connection between American greatness 
and our seapower. So I am by no means the first to believe that 
the decisions about American naval power that rest importantly 
in your hands must shape our security, our commerce, and our 
destiny as a great power.
    The continued shrinkage of the American combat fleet 
threatens our access to the world's fastest growing markets. It 
risks our leadership of a more-than-six-decade-old alliance on 
the western edge of the Eurasian continent. It challenges our 
country-to-country alliances with the great states that bracket 
the same continent to the east. It risks our ability to defend 
the United States at a distance from our homeland. And it 
threatens the international system that a century of American 
diplomacy and arms have labored to create and to sustain.
    Neither this nor any generation has enjoyed the ability to 
make decisions about its future in a vacuum. Resources, 
technology, and competing strategic demands of the moment 
cannot simply be brushed aside. There will always be tension 
between long-term goals and short-term needs. Balancing between 
them is the difficult task of statesmanship. When the long term 
is sacrificed for the short, there are always consequences. 
They are always bad.
    In the 1970s, political leaders and professionals in the 
field of intelligence decided that electronic and overhead 
intelligence could largely replace human intelligence. On 
September 11th, 2001, we learned to our dismay that this was an 
enormous mistake. The effort is still underway to compensate 
for that short-term decision of more than three decades ago.
    In the years before economists changed their minds about 
the acceptability of a sizable national debt, British leaders 
thought they could not bear the imbalance in the nation's 
accounts caused in large measure by the unexpectedly high cost 
of the Boer war. One measure they took was to reduce their 
naval expense. They decided that Japan could be depended on to 
maintain order in the Western Pacific and that the United 
States could be trusted with the Western Atlantic. As things 
turned out, they were right about the Western Atlantic.
    Today, one short-term view is that because our combat fleet 
is larger than the next 10 or 11 navies combined, we can safely 
allow the U.S. fleet to go on shrinking. A misunderstanding of 
the relatively small historic size of current defense costs and 
their relation to the nondefense portion of the national 
budget, which is a ratio of 1 as is to 5, contributes to this 
short-term view.
    Former Chairman of the Joint Chiefs Admiral Mullen said 
that the Nation's debt is the greatest threat to our security. 
I believe that the greater threat is the failure to keep a 
statesmanlike perspective of our security needs in relation to 
other important priorities. Dividing budget cuts equally 
between nondefense and defense expenses as in last year's 
sequester will neither resolve our finances nor assure our 
security.
    Assuming an equal division among the military services, 
however, sequestration would reduce the Navy's annual budget 
from 2013 to 2021 by significantly more than the amount 
allotted to new ship construction. American naval forces need 
to remain larger than the combined power of its as-yet smaller 
potential competitors because of their ambition, their 
prospects for increasing wealth, and the possibility that their 
asymmetric strategy will diminish our current advantage.
    The U.S. is also the only seapower with a transoceanic, 
global reach. This allows us to project power, to deter war, to 
win it if necessary, to communicate with our allies all around 
the world and at the same time.
    Surrendering this ability lays open the world's strategic 
chokepoints to chaos or the will of states that possess an idea 
of international order that is wholly different from our own.
    The Navy's 2013 30-year plan points the U.S. in precisely 
this direction. As Admiral Greenert, the Chief of Naval 
Operations, said recently, the Navy now aims for a fleet of 
``approximately 300 ships.'' This lowers the projected size of 
the fleet by 13 ships from what the Navy has for the previous 6 
years said it requires to carry out its assigned missions. Is a 
reduction of 13 ships sufficient by itself to cause alarm? I 
don't think so. Is the continued drift toward a smaller and 
smaller Navy troubling? Yes, it is.
    Twenty-five years ago the fleet reached its late and post 
cold-war era high watermark of slightly fewer than 600 ships. 
When a Navy request for a frigate was rejected, then-Secretary 
of the Navy Jim Webb remarked that this was likely a modern era 
turning point for the fleet. His prediction turned out to be 
correct. It has contracted since that day. Abandoning the goal 
of a 313-ship Navy should not be seen as an isolated event, but 
rather as part of a continuum which, stretching into the 
future, looks increasingly dismal.
    From fiscal year 2012 to the fiscal year 2013 plan, the 
administration has reduced the number of ships it plans to 
purchase by 28 percent, from 57 to 41. The recently published 
30-year plan will hold the number of ships below 300 for half 
the entire 30-year period.
    The fiscal year 2012 budget allocated $14.6 billion, that 
is constant 2012 dollars, for new construction alone. The 
fiscal year 2013 budget cuts back this figure to $10.9 billion. 
The current future year defense plan calls for an average of 
$11.9 billion, again in 2012 dollars, per year for new 
construction.
    After the current FYDP [Future Years Defense Program] is 
complete, the Navy plans to increase its annual spending on new 
construction for the following FYDP to $18.5 billion. In the 
following decade the same figure increases to a yearly average 
of $19.5 billion and then drops to $15.9 billion per year for 
the last decade of the 30-year plan.
    The increases in new ship construction envisioned for the 
fiscal year 2017 to fiscal year 2022 period and for the second 
decade of the 30-year plan are 70 percent and 79 percent 
respectively. I would prefer to defer to this committee's 
judgment about the likelihood that such plans will be carried 
out.
    If, however, the average of $11.9 billion per year that the 
administration plans to spend over the next 5 years were to be 
maintained over 30 years, the result would be a total 
expenditure on new ships of about $357 billion. If the current 
average price of a single naval combatant, around $2 billion, 
were to be maintained--and this is a large if--this would 
purchase 178 ships at the end of three decades. Under the best 
circumstances, this would result in a fleet considerably 
smaller than the one that now exists, one that is closer to 
200, than 300 ships.
    However, even if the administration's 30-year plan is fully 
executed, the Navy will still face significant periods of time 
when it will be short of the attack submarines it needs, short 
of the large surface combatants it needs, and short of the 
amphibious warfare ships it needs.
    I would like to be able to tell the committee that 
questions about the fleet's future size can be answered by the 
increased combat capability that ships of today enjoy over 
their predecessors. There is some truth to this. There was also 
a truth in the story about the musician who when asked about 
how to get to Carnegie Hall answered, ``practice.'' The 
musician is correct that practice is necessary, but practice is 
not a substitute for real talent. And capability is not a 
substitute for the presence that comes with a sufficient number 
of ships.
    The combat capability of U.S. naval vessels has increased 
importantly over recent years and such developments that lie on 
the horizon as the rail gun, solid-state lasers, and the 
unmanned vehicles in the air, on the surface, and beneath the 
sea will continue to improve our naval capability, although it 
is important to note that research for many of these advances 
now stands to be cut.
    But if we could construct a single future destroyer that is 
as powerful as two current ones, and if the fleet was 
diminished proportionately, would we be better off? What good 
could an extremely powerful destroyer on patrol in the Persian 
Gulf do if a second is unavailable in the event of a serious 
crisis in East Asia's waters? The answer is no good at all. 
Numbers matter.
    I would also like to be able to tell the committee that 
encouraging our allies to assume a greater share of 
responsibility for our collective maritime security could 
compensate for a reduced U.S. combat fleet, but partnerships 
with foreign navies envisioned by the Navy's Maritime Strategy 
published in 2007 aimed roughly in this direction. But most of 
these partners are small coastal forces that lack the seagoing 
and seakeeping ability of the U.S. fleet. And while the older 
naval powers such as those in Western Europe maintain larger 
combat fleets, they are a shadow of their former selves, and 
the shadow is getting dimmer. There is no good reason to expect 
they will take up the slack left by a shrinking U.S. Navy.
    If the Navy's assumption is mistaken that current political 
leadership will agree to large future increases in 
shipbuilding, we will be headed toward a kind of naval holiday. 
The equally optimistic expectation that average ship costs can 
be maintained at roughly $2 billion per vessel prolongs the 
holiday. This will not be a pleasant holiday. China's economy 
has its problems, but it continues to perform. Jane's Defense 
Forecasts says that China will double its defense budget 
between now and 2015. Russia plans a $160 billion naval 
expansion in the Pacific which is to include 36 new submarines 
and 40 surface ships. Some of you may have noted that the 
Russians and Chinese are holding joint exercises shortly in the 
Pacific.
    If a couple postpones needed repairs on their home for a 
decade and then decides to fix all that has been broken, they 
will be lucky to finish the job in a year. They will also be 
fortunate because other more prudent owners will have sustained 
the home repair industry. Our shipbuilding industry does not 
have the benefit of other purchasers who can sustain it if Navy 
budgets prove unequal to the task.
    For the industrial base that supports U.S. shipbuilding, a 
budget-induced naval holiday would be a disaster that could 
take decades if ever from which to recover.
    Finally there are consequences if U.S. seapower continues 
to decrease and shows itself unable to meet even the reduced 
goals that it has set for itself. History is a good guide.
    During our Civil War, British political leadership 
considered recognizing the Confederacy but was eventually 
dissuaded by Union military success. In World War II, Sweden 
declared neutrality but grew increasingly amenable to allied 
requests as Hitler's military position worsened. Romania 
initially sided with the Third Reich in the same war, but 
changed sides following U.S. attacks on their oil fields and 
the coup that deposed the pro-Nazi dictator Antonescu. 
Bulgarians followed a similar path from siding with the Nazis 
to switching their allegiance to the allies. More recently, 
Saudi Prince Bandar, acknowledging China's increasing 
international prominence and power, visited Beijing and met 
with President Hu.
    American weakness at sea, especially in the Indo-Pacific, 
will change the current military, diplomatic, and commercial 
character of the region. Whether the U.S. fleet shrinks because 
of too little funding or because unreformed procurement 
practices have raised the price of ships, or because ships have 
been called home to save on operational expense, the result is 
pretty much the same. While we were once present in strength, 
we would be no more.
    A pivot to Asia, like any pivot, needs a fulcrum. American 
seapower is this fulcrum. Diminishing it removes the pivot. A 
nation burdened with massive debt whose ability to shape world 
events has been limited, in tandem with its capacity to invest 
in research and technology, will have more and more trouble 
finding markets. China's potential hegemony would not only 
force its neighbors to reconsider whether the U.S. is a 
reliable ally, it would also become an increasingly powerful 
magnet for trade in the region and I believe at the expense of 
U.S. commerce.
    Unlike the U.S. whose seapower has protected sea lanes that 
other states have used to its benefit, China has a different 
set of values. It views with suspicion a liberal trading 
system, notwithstanding the benefits received from it. China's 
friends include Iran and North Korea. Beijing is a poor 
candidate to support the international order that has been the 
keel of U.S. foreign and security policy for a century. Winning 
U.S. seapower is an invitation that China will regard as a 
complement to its rising military and navy in particular. It 
foreshadows a coercive resolution of territorial disputes in 
the South China Sea, the likelihood of an increased regional 
arms race, and the troubling international perception that the 
U.S. is or has abandoned its role as a great power.
    American seapower is the strategic keel of our foreign and 
security policy. Reducing it would be an exercise of history-
making shortsightedness. Restoring it would be an act of 
statesmanship from which Americans and all who cherish 
political liberty would benefit for the remainder of this 
century.
    Thank you for your patience and for the opportunity to 
address this committee.
    [The prepared statement of Dr. Cropsey can be found in the 
Appendix on page 52.]
    Mr. Wittman. Thank you, Dr. Cropsey. Ms. Eaglen.

 STATEMENT OF MACKENZIE EAGLEN, RESIDENT FELLOW AT THE MARILYN 
WARE CENTER FOR SECURITY STUDIES, AMERICAN ENTERPRISE INSTITUTE

    Ms. Eaglen. Thank you, Chairman Wittman, and thank you 
Ranking Member Cooper and members of the committee for the 
chance to join you again this year. I too would ask that my 
written statement be submitted into the record and I will just 
briefly cover a few points in my opening remarks. I know you 
are on a tight schedule here today.
    Before the administration issued its guidance in January, 
strategic guidance, after the Budget Control Act with an 
emphasis on the Asia-Pacific, the pivot, we had the QDR 
[Quadrennial Defense Review] Independent Panel, which this 
committee strongly supported and stood up 2 years ago, a 
bipartisan group led by Bill Clinton's Secretary of Defense and 
George W. Bush's National Security Advisor. I know you know 
their report and findings very well. That group found that the 
military would need to shift its emphasis and focus to the 
Asia-Pacific. And one of the things recommended as part of a 
broader portfolio of force structure recommendations, was a 
Navy roughly the size of 346 ships.
    Now, obviously the panel understood the resource 
constraints 2 years ago, which has only grown significantly 
since then. But this is something that has been a priority for 
the Department and the direction that they have needed to head 
for a while. Strategically it makes sense. Budgetarily, the two 
are at complete odds with each other. The goals of the strategy 
and the budget dollars, including the 30-year shipbuilding 
plan, simply don't match or add up.
    The Secretary of Defense was called to the White House to 
brief the President's National Security Advisor, Tom Donilon, 
on that very fact before the budget hit the Hill, basically 
saying this budget shrinks the Navy and the Air Force and yet 
we are going to pivot to Asia. There is an internal 
inconsistency in the two documents and I understand the 
resource constraints, again, the Department is under.
    This week the Air, Sea and Space Conference has highlighted 
a lot of the things that are on your minds here today and the 
ongoing lens through which we are talking about a lot of these 
challenges. It was telling when a panel of Navy, Marine Corps, 
and Coast Guard officials were asked the question: if there was 
one more free dollar floating around Washington--pretend--we 
are going to go to the land of pretend for a moment--where 
would you spend it? And the overwhelming responses were that 
they would spend it on maintenance, deferred and unfunded 
maintenance, primarily ships and aircraft. And of course no 
committee knows better than the House Armed Services Committee 
the Navy's readiness challenges over the last 5 years. They 
have certainly put in an effort, but this gets right at the 
assumption in the 30-year shipbuilding plan of rosy and 
optimistic service life assumptions as found in this plan.
    So for example, if you look at the plan and it says we are 
going to keep cruisers in the service for 35 years and 
destroyers for 40 years, but you look at the Navy's budget this 
year, we are retiring cruisers 15 years before the ends of 
their service life because there is not enough money to 
modernize them for the ballistic missile defense mission, in 
this case for those seven cruisers, one actually that was 
grounded and should be retired.
    So again reality is that we are keeping cruisers in service 
roughly 20 years. The assumption behind the plan is that it is 
35. So reality is going to hit this plan as well, which brings 
it to its logical conclusion that even the 298-ship Navy may 
never become a reality, the one that has certainly shrunk.
    As the Department pivots to Asia, to a region that is 
defined by its tyranny of distances as stated by previous 
Pacific Command commanders, so you only exacerbate the wear and 
tear on a fleet already stressed incredibly, and maintenance 
that is not fully funded. So you have a fleet that will be 
smaller as a result of this plan, that will be older as a 
result of this plan, and whose maintenance bills will continue 
to rise.
    You might recall a couple of months ago the USS Essex had 
to sit out its participation in the military exercise. That is 
the second time that happened, and it was due to equipment 
malfunctions and failures onboard the ship. This is not an 
isolated example across the Navy and we will see more of this 
going forward.
    The assumptions behind the 30-year plan are flawed because 
the assumptions behind the January Strategic Guidance are 
flawed. It assumes that limited conflict is the only type of 
operations that the military will be involved in over the next 
10 years. The war plans are changing at the Department from 
long stabilization operations, for example, to short-duration, 
high-intensity scenarios with Iran and North Korea. It 
presupposes basically a more stable world. Yet the Chiefs have 
told you repeatedly that the risks and threats and challenges 
facing the Department are only growing. If you look at what we 
have asked the military to do the last 10 years, it is only 
growing, and that is not exclusive to Iraq and Afghanistan.
    So I would close by saying some of my concerns, aside from 
these assumptions, that are throughout the Department of 
Defense, not just the Department of the Navy's plans, are that 
the Virginia class submarine slipped specifically from fiscal 
year 2014 to fiscal year 2018, as I was told by the Navy was 
pure BCA-driven. That was just a Budget Control Act decision. 
When the top-line numbers came down, it was not linked to the 
strategy, the pivot to Asia. For example, that is concerning to 
me and I am sure to you.
    Something my colleague Ron O'Rourke highlighted in his 
testimony, it is unclear what this new extension of carrier 
construction means. You recall in the 2010 budget request 
President Obama asked to slip carrier construction from 4 to 5 
years. Excuse me, that might have been 2011. This may slip it 
from 5 now to 6, possibly 7. The industrial base, particularly 
the suppliers and vendors to our carrier yards, have already 
started talking pretty loudly about what this will cause: 
inefficiencies. It is going to grow the cost to the taxpayer 
because they are going to charge the shipyard more. Supplier 
layoffs. Some of them will exit the business altogether, not to 
return. And a longer learning curve when the workers come back, 
if there is this delay.
    And then, of course finally, the promise that the check is 
in the mail. The assumptions behind this plan are that the 
Navy's funding--and Ron referenced this--will grow in the 
second FYDP. Fiscal year 2018 through 2022; that then they will 
get these additional SCN [Shipbuilding and Conversion, Navy] 
dollars to meet all of the priorities for the bulge in spending 
that is going to be required to actually make this plan a 
reality. That is a trick as old as the future years defense 
plan. We all know that anything beyond the current fiscal year 
is Monopoly money, and I am very concerned about the Navy 
resting all of its eggs in this basket and hope and promise of 
additional funds in the future.
    Thank you, I look forward to your questions.
    [The prepared statement of Ms. Eaglen can be found in the 
Appendix on page 62.]
    Mr. Wittman. Thank you, Ms. Eaglen. I appreciate that.
    I am going to make some very brief remarks so we can get 
straight into questioning. I think the perspectives that you 
all provide are extraordinarily valuable. The reason behind 
this hearing is to look at where we have gone recently; and I 
say recently, within the past 5 years, in the broadening 
differential between planning and what actually happens in 
decisionmaking here in Congress. And I think there is some 
building concern about making sure that planning is a more 
vigorous process that tries to reflect the reality of what we 
have to deal with.
    Now, as has been said before, it is very difficult to 
predict the future. And I don't think anybody has an 
unrealistic expectation about what planning does as far as 
predicting with accuracy the future. I think the critical part, 
though, of planning is to make sure it encompasses 
contingencies and encompasses flexibility, whereas we know 
those challenges change. And who would have, 11 years ago, 
thought about the asymmetric threat and how the military has 
been repositioned?
    And so as somebody had said in the past, one thing for sure 
is that as far as the predictive capability of planning is that 
we always get it wrong as far as what to expect in the future. 
But that doesn't mean, though, that the planning process itself 
shouldn't be vigorous and shouldn't try as best it can to 
reflect the scope, not only in the short term but also in the 
long term.
    And I think that is a big question that we need to ask 
ourselves; that is, are we being vigorous in that process? Are 
we asking ourselves the difficult questions? Are we making sure 
that as we make decisions, we keep in mind not only the short 
term but the long term, and as best we can provide the ability 
for ourselves to be able to address the threats that are out 
there. Granted that they will change, but we do know with some 
certainty based on history where those threats are. We do know 
also through history, too, that the unexpected comes up and 
that we want to make sure within those plans that there is some 
contingency there.
    So I appreciate you all's perspective. I think you bring 
that up in a very cogent way and in a very direct way for all 
of us to consider as we make these decisions. So with that, I 
am going to turn to Mr. Cooper for his time of questioning.
    Mr. Cooper. Thank you, Mr. Chairman. I appreciate the 
witnesses' testimony. All the witnesses seem to be agreed that 
we need more ships. I would like to ask each of you how we pay 
for that. Mr. O'Rourke.
    Mr. O'Rourke. The affordability challenge for Navy 
shipbuilding is present not just in this 30-year plan but in 
plans going back several years. The Navy is proposing to pay 
for that through an increase in the shipbuilding funding 
profile through the middle years of the plan.
    One potential oversight question for Congress is the extent 
to which the Navy has received promises or assurances or 
commitments of some kind from OSD [Office of the Secretary of 
Defense] that that funding hump will be realized. It shows in 
the 30-year plan, but there aren't any statements in the 30-
year plan from the Navy about the basis for their confidence 
that that hump in funding will be realized. So I think that is 
an issue for the Congress to pursue potentially as an oversight 
question in relation to this plan.
    Mr. Cooper. Dr. Cropsey.
    Dr. Cropsey. Well, one way would be to adhere more closely 
to good business practices. Try to bring down the cost of 
ships. Fixed-price contracts have proven that usefulness in the 
past. The Navy has tried to do that with some success for the 
littoral combat ship.
    Another is dual sourcing. That also has proven in the past 
to reduce the cost of ships. Imposing cost discipline, 
encouraging the Navy to impose cost discipline as ships are 
being constructed would help. I think it would also be a great 
encouragement for the Defense Department and for the military 
in general to consider, instead of an equal distribution of 
resources, a strategic distribution of resources. And I think 
that that would favor American seapower right now, because 
among other things, of the pivot to Asia. Asia is a maritime 
theater.
    I don't think anything is more important, though, than an 
understanding of what our priorities, what our strategic 
priorities as a nation are. And if those strategic priorities 
are expressed in dividing the pain equally wherever there is 
pain, then we are going to run into trouble. If they are 
divided according to some idea of what our strategic 
requirements are, I think that a combination of doing business 
better, reforming to a certain extent the way the Navy does 
business, imposing more discipline and strategic considerations 
would produce the money.
    Mr. Cooper. Ms. Eaglen.
    Ms. Eaglen. This is a topic about which I have given great 
thought and written about. A lot of the money that can be saved 
in the Department is not in the procurement account. It is 
structural changes that are required. More things along the 
lines of the efficiency drills that the Department has been 
under in recent years. Examples include, for example, 
performance-based logistics, where you have public-private 
partnerships in the maintenance of systems and platforms. That 
brings down the cost of working with depots and the companies 
that built these systems in the first place.
    I think another thing we need to do is be honest about what 
stretching out programs does to the cost. For example, take the 
Joint Strike Fighter program as part of the 2013 budget 
request. The overall buy was not cut, but a lot of the planes 
were shifted into the outyears. The Pentagon said this morning 
that costs $6 billion. That is not a savings, that is a cost. 
But it was done in order to meet a budget target of savings.
    And so until and unless we are honest about what does 
stretching out of these programs, including carriers, is really 
doing to the cost of them by making them actually rise over 
time, it is hard to see how we can have the next part of that 
conversation. I support multiyear procurement and block-buys 
whenever possible, and Congress has been excellent about that, 
and this committee in particular in the shipbuilding realm. I 
know that this is an area that the Navy--in fact, I think the 
Navy is in decent acquisition shape. The plan, of course the 
numbers are too low, but I think in terms of execution, things 
are going pretty well for the Navy, particularly relative to 
the other services' acquisition failures of late.
    Finally, I think you need to look internal to the entire 
Department of Defense before you ever come to Congress and ask 
for an additional dollar. That is something that the QDR 
[Quadrennial Defense Review] independent panel also found. The 
simple fact remains that 50 percent of the entire defense 
budget is people. The 2013 budget proposes laying off 100,000 
Active Duty service members, but it leaves untouched 750,000 
Defense civilians. I think that is a workforce ripe for 
reduction and some savings there.
    Mr. Cooper. Thank you, Mr. Chairman. I see that my time has 
expired.
    Mr. Wittman. Thank you, Mr. Cooper. Mr. Brooks.
    Mr. Brooks. Thank you, Mr. Chairman. As you know, we face 
some very serious financial difficulties. We have got the 
Budget Control Act. We have sequestration. House Armed Services 
Committee staffers have put together some different scenarios 
that we face with sequestration, and then we also have the 
White House position.
    Some examples with sequestration, on the one hand, we would 
have a reduction in force of 100,000 uniformed personnel, 
100,000 DOD [Department of Defense] civilian support workers, a 
half-million private sector contract support workers for 
national defense, totaling 700,000 lost jobs. That is one 
scenario that has been put together by the House Armed Services 
Committee staff.
    Another scenario is where we mothball one, maybe two, 
carrier battle groups, one or two of our submarines, 10 to 30 
percent of our fighter and strategic bomber capabilities, we 
would reduce our rapid response capabilities by 20 percent. 
That is another possible scenario if sequestration takes hold 
January 1, 2013, as is required by the Budget Control Act.
    Then we have the White House position. On the one hand we 
have Secretary of Defense Leon Panetta publicly stating that 
sequestration would be disastrous. We have got one of the 
members of the Joint Chiefs testifying before the Senate that 
it would be the equivalent of a Pentagon shutdown.
    But on the other hand we have the President of the United 
States saying that he is going to veto any constructive 
measures to change the Budget Control Act sequestration 
provisions. Then you have got the possible effect before the 
House Armed Services Committee where the White House spokesmen 
testify that their scenario is that we would cut anywhere from 
8 to 9 percent or, on the low side, or high side, 12, 13, 14 
percent out of every single existing contract that the 
Department of Defense has with anyone, which would be hundreds 
of thousands of contracts that would be terminated for the 
convenience of the government or they would have to be 
renegotiated.
    In that kind of context, how do you see sequestration if it 
holds true, and it is supposed to hit us in 8\1/2\ months, 
impacting the information that you shared with us about 
shipbuilding?
    Mr. O'Rourke. There are a couple of points that I can raise 
in connection with that. One has to do with how sequestration 
is applied--and I know that you are aware that there are 
discussions on exactly how that law would be applied--and 
whether you would do it as a straight percentage at the 
program, project, and activity level, or whether you do it at a 
higher account level, and whether the Department takes 
advantage of the 1990 amendment that allows a reallocation of 
the defense budget prior to the imposition of sequestration.
    So when you look at those variables, there are different 
ways that sequestration might be applied. If it is applied at 
the program, project, and activity level and it is a straight 
arithmetic application, then the shipbuilding budget is 
particularly vulnerable to program disruption because it is 
laid out in the DOD appropriations bill at the line-item level, 
at the level of individual shipbuilding programs. That is not 
true of the other procurement accounts in the DOD 
appropriations bill.
    And so you do get into a problem of not being able to build 
three-quarters of a ship. In that sense, if you apply 
sequestration at that level, the shipbuilding budget is more 
vulnerable programmatically to this way of applying 
sequestration than are other parts of the DOD appropriation 
account.
    The other part of the answer I want to give you is that at 
the general level of cost calculation, my counterpart at CBO 
[Congressional Budget Office], Eric Labs, ran the numbers and 
he estimated a few months ago that if you were to apply 
sequestration generally across the Department, where the Navy 
gets a proportionate share and the shipbuilding budget gets a 
proportionate share of that, that we would lose 18 to 24 ships 
over the 10-year period. So you can round that off and say it 
is 20 ships or 2 ships per year, and that this would be the hit 
to the shipbuilding budget.
    That is another way of looking at it, and then what you 
have to then decide is what exactly is going to be the method 
for applying sequestration and whether it will be at this 
general level or whether it will be at the program, project, 
and activity level where it can cause particular disruption to 
individual shipbuilding programs.
    Mr. Brooks. Ms. Eaglen or Dr. Cropsey, do you have anything 
else to add?
    Dr. Cropsey. Sure. Go ahead.
    Ms. Eaglen. Ron did a great job outlining it. I would just 
say one thing from the perspective of shipbuilders. It is 
workforce management. They need to plan now for what is going 
to be--what their actual workers are going to do who clock in 
every day in January. Basically what this means is significant 
numbers of layoffs, and they will do this in the face of the 
uncertainty, whether or not the Department is planning for it, 
whether or not Congress does anything about it between now and 
the lame duck session, this will begin happening, this 
consolidation and downsizing now.
    Dr. Cropsey. And I would like to add a point here to what 
my colleague Ron said, and that is that with that impact felt 
especially hard on the shipbuilding accounts, especially on new 
construction, where that decision is made, the effect on the 
industrial base should be considered very carefully because it 
will have a profound effect on the industrial base, which I 
think 5 years out from now, even with the current shipbuilding 
program in place, is going to have a problem. That brings the 
problem up immediately.
    And as I mentioned--alluded to in my shorter version of the 
testimony that I gave, we are going to be facing a very severe 
problem, one which will take years, if ever, to recover from.
    Mr. Brooks. Thank you, Mr. Chairman.
    Mr. Wittman. Thank you, Mr. Brooks. Ms. Hanabusa.
    Ms. Hanabusa. Thank you, Mr. Chairman. I would like to 
follow basically that line. And in one of the codels 
[congressional delegations] that I took, we went to Nassco 
which is of course, as you know, in San Diego, and one of the--
I guess the person who runs the institution there said that the 
Jones Act was extremely critical, because of the fact that what 
we cannot rely upon is for the defense industry to be the 
shipbuilder and the only customer, and that in fact you need 
the commercial intervention to come in, especially when we have 
those dips.
    And I think that was along the lines about workforce, that 
if we dip too low we are going to lose that critical mass, and 
we have already lost a lot of that talent pool. And as a 
result, we are going to even fall further down in terms of our 
ability to build the ships.
    So in that light, Mr. O'Rourke, can you go back about what 
you were saying was the distinction in how the procurement 
works on shipbuilding versus any other form of military 
expenditure, and then whether or not there is a resolution or 
some way that we can fix that?
    Mr. O'Rourke. It has to do with the format of the DOD, 
annual DOD appropriations bill. And if you look at the actual 
language of the law, you will see that most of the accounts are 
appropriated at the full account level. The exception to that 
within the procurement title of the DOD Appropriations Act is 
the paragraph that appropriates funds for shipbuilding. That 
paragraph is structured to call out funding levels for 
individual shipbuilding programs.
    So if the sequestration law is applied at the individual 
program, project, and activity level, the PPA level, then you 
can run into a scenario in which each of those programs gets 
their funding shaved by whatever the arithmetic percentage is, 
and you can get into multiple situations of not being able to 
build three-quarters, or four-fifths, or nine-tenths of a ship.
    The fix to that potentially is a 1990, if I recall, 
amendment to the sequestration law which allows the Defense 
Department to propose a reallocation of the defense budget 
prior to the imposition of sequestration. That is a proposal 
that the executive branch would make to Congress, and Congress 
would have the choice of whether to approve it or not.
    If DOD took advantage of that authority--and there is some 
question as to whether they can or not under the BCA--but if it 
is judged that they can, and if the executive branch then 
chooses to in fact do so, they could restructure the allocation 
of spending within the defense budget in a way that could 
reduce the disruptions to individual shipbuilding programs, 
probably by bumping up the funding for some shipbuilding 
programs and perhaps sacrificing entire ships in other 
shipbuilding programs so that you don't run into a situation 
where all the programs are disrupted by being shaved across the 
board.
    Ms. Hanabusa. So if I am understanding you correctly, the 
uniqueness of the shipbuilding program is that we allocate by a 
particular ship, and that when we cut in sequestration, for 
example, across the board, all of those ships would not have 
enough funds to actually go forward, because they would not go 
forward unless the full funding is there, because they would 
have to take the risk that the full funding would not be there. 
And we do not afford in the shipbuilding line item, or whatever 
way we want to refer to it, the ability to shift funds or 
reallocate at the discretion of the military. Am I 
understanding you correctly?
    Mr. O'Rourke. I think you are. It has to do with the 
format, the actual language of the law of the DOD 
Appropriations Act. And each year when it is passed, it is only 
the shipbuilding account, the SCN account, that calls out 
individual programs within the account as a routine matter from 
year to year.
    Ms. Hanabusa. Does anybody know why that became the 
practice?
    Mr. O'Rourke. I think that is simply a matter of tradition 
of how the format of the DOD appropriations bill has evolved 
down through the decades.
    Ms. Hanabusa. But is there any specific reason why just 
shipbuilding was given that privilege of not being able to be 
shifted in any way?
    Mr. O'Rourke. There may have been such a reason originally, 
but I am not aware of what it would be.
    Ms. Hanabusa. Have we ever seen this kind of potential 
threat to shipbuilding in recent history?
    Mr. O'Rourke. There was a sequestration scenario that was 
investigated during the time of the multiple continuing 
resolutions [CRs] a year or two ago, and we ran into exactly 
this situation where there was about a 1- or $2 billion 
shortfall in shipbuilding, but the funds from the prior year 
that might carry through in the CR were not properly aligned 
with the individual programs for the next year. And the 
misalignment was actually between 5- and $6 billion, even 
though the total account difference was only 1- to $2 billion.
    Ms. Hanabusa. Thank you. Thank you, Mr. Chairman.
    Mr. Wittman. Thank you, Ms. Hanabusa. Mr. Conaway.
    Mr. Conaway. Thank you, Mr. Chairman. Thank you all for 
being here.
    I want to chase a bit of a rabbit from shipbuilding to talk 
about the Navy's use of resources with respect to the energy 
they consume. In a recent letter to me and the full committee, 
after some questions we had with Secretary Mabus, he said that 
the Navy's energy program is to source a competitively priced 
and domestically produced liquid fuel that could be dropped in 
as a replacement to diesel aviation gas. I queried his 
Assistant Secretary of the Navy for Energy as to why, if that 
was the case, if it is simply liquid fuel domestically sourced, 
wouldn't they embrace a removal of the restraints they have 
under section 526 of the energy bill which prevents the Navy 
from buying that gas? And she emphatically said no, they 
wouldn't. And I asked, well, is this a green agenda or an 
agenda to provide fuel? She said no, no, no, it is not a green 
agenda.
    So given that we have studies that show coal-to-liquids, 
coal biomass-to-liquids, at prices of crude oil that are below 
where crude oil is currently today are competitively priced, 
they are not domestically available.
    I guess, Ms. Eaglen, why would the Navy not stick to their 
guns in talking about competitively priced, domestically 
sourced fuel and not embrace coal-to-liquids or coal biomass-
to-liquids under that rubric or under that definition? Any 
thoughts? Ms. Eaglen.
    Ms. Eaglen. I think that you raise a very fair question. I 
know that the Department of Defense obviously is the largest 
consumer of oil and anytime there are fluctuations in the price 
of oil that they feel--and you usually receive the 
reprogramming requests pretty rapidly to deal with it. So I 
understand the general policy goal for the Department to become 
less reliant or allow their systems to operate under alternate 
or hybrid fuels. I think that is a worthy goal.
    I will say that the Department of Defense is spending 
significant amounts of resources on its energy agenda across 
the services, and the Navy of course I think is out front on 
this effort, more so I believe than any other Federal agency. 
As the Department is grappling with its third year of funding 
cuts, I think that this is a priority set that should be 
questioned by you for the Department.
    Mr. O'Rourke. Just very quickly I would note that 
colleagues of mine at CRS are right now preparing a report on 
DOD energy initiatives, including among other things the Navy's 
initiatives in the biofuel area. And we will take that question 
back to them and attempt as best as we can to address that as 
part of our process for preparing that report.
    Mr. Conaway. Thank you, Mr. O'Rourke. I look forward to 
getting that.
    It seems that this whole effort began in 2007 under Speaker 
Pelosi's tutelage and has exacerbated under the President 
currently. I have asked repeatedly the question: Shouldn't the 
taxpayer be able to decide for themselves what the value is? 
Give us the differential between what you would spend if all 
you were doing is trying to move stuff from point A to point B, 
versus what you are spending now on all these initiatives to do 
things that the Department of Energy may be better suited to 
develop and those kinds of things.
    Now I understand their logic, and this is their favorite: 
They trot out, well, if we avoid hauling diesel across 
Afghanistan we put our folks at less risk. I get it and if that 
is what you are doing, great. Keep it up. But we have got about 
3- or $400 million a year in research that we put at that 
issue, which is dwarfed by all the other things they are doing.
    So if it is mission-critical, I get that. But much of what 
they are doing is not. Including this rim of the Pacific 
exercise in which Secretary Mabus bought 400,000 gallons of 
aviation fuel at 16 bucks a gallon versus a $4 a gallon 
regular, because it is green and his F-18s can be tagged with 
the moniker of Green Hornet. And I asked the Secretary, I said, 
well since you spent four times as much money as you would have 
otherwise spent, will you fly a fourth of the amount of hours 
in order to keep your fuel budget the same? He said no, no, no, 
we will fly the same number of hours. I said, you are going to 
spread the load of this nonsense across the entire fleet. And 
he said, well, it is only a little bit of money. And I said, 
well, Mr. Secretary, Scripture says if you are faithful in the 
little bits, you will be faithful in a lot of big things. We 
have entrusted you with a lot of big things and it is 
disconcerting for you to tell me 8 million bucks extra on fuel 
just to wave a green flag in these days when we are short 
resources across the entire system; you just sat here and spent 
an hour almost, or plus, telling us that the Navy is short of 
resources, whether it is maintenance or shipbuilding or 
whatever it might be, and yet we are squandering precious 
dollars on initiatives that ought to be done somewhere else in 
the Federal Government and are not a core competency of our 
Department of Defense.
    So, Mr. O'Rourke, I appreciate your study at CRS.
    Mr. O'Rourke. I can tell you that one objective of that 
study will be to try to sort out the rationalizations that have 
been offered, the justifications that have been offered for the 
various DOD energy initiatives so that you can try to plot the 
initiative against the particular justification that has been 
offered. Because it is a potentially pretty complex matrix 
where some initiatives have been justified and some----
    Mr. Conaway. Will that include cost differentials as well? 
Will the study include cost differentials as well?
    Mr. O'Rourke. We are going to try and present as much data 
as we can find.
    Dr. Cropsey. I think that is one of the problems. That is 
the problem that I have seen. I have seen the statements by the 
Secretary of the Navy that there are these alternatives out 
there, and algae and so on and so forth, and I have asked and 
asked people who should know: Do these alternatives exist and 
what do they cost? There is no--I haven't seen a convincing 
answer from the Navy. The answers that I have seen from people 
who are supposed to know about this is yes, you can do it, but 
it costs X times as much. I am looking forward to this study 
also.
    Mr. Conaway. Thank you, Mr. Chairman. Thank you, folks.
    Mr. Wittman. Thank you Mr. Conaway.
    I want to wrap up with just a general scope question in 
looking at the whole decisionmaking process. As I stated 
earlier, what concerns me is looking at the process 
historically, whether it is the Quadrennial Defense Review, 
which I know each of you have been involved in and have been 
very analytical in your approach to that, or the 30-year 
shipbuilding plan, it seems as though as we go through the 
years, there is more and more separation from a planning 
process and then the ultimate decisionmaking process, and that 
we get much more myopic in scope in how decisions are being 
made. And I realize some of that is out of necessity with the 
immediate urgency of budget decisions. But I also realize, too, 
that if we get so myopic in addressing the urgency of the 
immediate, we lose focus on the long term. And as you all have 
pointed out, there is expense related to that, there is 
strategic weakness associated with that.
    And I want to get each of your perspective about how do we 
then, in this environment, how do we restructure the planning 
process so that those long-term impacts are more apparent and 
are more in the forefront when decisions are being made? And I 
say that because the QDR seems to become a document that really 
isn't as useful as it needs to be, as well as the 30-year 
shipbuilding plan.
    How do we address the planning process? Or is there a way 
to address the planning process so that it is more reflective 
not only of the short term, but of the long term, to make sure 
that the decisions that we are making are truly in our best 
long-term interest. I would argue that if we are not doing 
that, that we really, as you all have pointed out, placed this 
country in a strategic quandary, in many instances a strategic 
position of longer-term weakness of which we may not be able to 
pull ourselves out of. Mr. O'Rourke I will begin with you.
    Mr. O'Rourke. I will give a two-part answer. The first part 
is that the fact that we do have a requirement for an annual 
30-year plan does provide a tool that allows long-term 
visibility, especially into the question of whether we are 
pushing off large investments into the future and building up 
what might be an insurmountable investment burden in the 
future. There are other branches of military planning that do 
not have the benefit of that.
    So in one sense, shipbuilding has a tool available to it to 
support congressional oversight that other parts of defense 
procurement do not. There is also a 30-year aviation plan but 
it is structured a little bit differently. But many parts of 
DOD procurement don't have that at all.
    So on the one hand, we do have a tool. One way to improve 
the usability of the tool is to ensure, for example, that it is 
submitted in a timely manner. As you know, the law requires the 
30-year shipbuilding plan to be submitted as part of the 
defense budget materials each year, meaning along with the 
submission of the budget itself, which occurred on February 
13th of this year. The 30-year plan this year was submitted on 
March 28th, which was the eve of the Seapower Subcommittee's 
oversight hearing on shipbuilding that was held on March 29th. 
So there was almost no opportunity for that subcommittee, or 
for the committee as a whole, to review the details of the 30-
year shipbuilding plan prior to the hearing that was being held 
as the principal mechanism for investigating the details of 
that plan and asking and hearing answers to oversight 
questions.
    So one way in which the process can be improved would be to 
encourage DOD as much as possible to submit that plan in a 
timely manner in accordance with 10 U.S.C. 231. And in a 
parallel way, you can ask the same thing or perhaps encourage, 
again, the executive branch to submit the annual report on 
security and military developments relating to China in a 
timely way. That is supposed to be submitted I think at the 
beginning of March, and for the past 2 years in a row it has 
been submitted in August, after the markups have occurred and 
the spring oversight and budget review hearings have occurred.
    The purpose of that report, like the 30-year plan, is to 
support congressional oversight and review of that year's 
budget proposal. Now if you submit that in August, you have 
missed all of those activities and you are 6 months out of 
cycle. And right now we do not have the annual report on 
security developments relating to China. So that report is also 
overdue, and I have no idea when it is going to be submitted.
    Mr. Wittman. Ms. Eaglen.
    Ms. Eaglen. It is a great question, and I know it is a 
concern of yours and mine. And I agree with Ron about the 
tools. Last year I advocated for continuing to ask for the 30-
year shipbuilding and aviation plans because precisely you can 
walk back into the problems and you can identify the 
challenges.
    There are two things I would add to Ron's answer. The first 
is that implicit behind this 30-year plan as well as the new 
defense strategy--hard to call it that, it was only eight 
pages--but implicit behind that, and we heard the chiefs 
testify in the posture hearings, the force will absorb more 
risks. That means a whole lot of things. As I already 
referenced, that means the war plans are changing, the response 
time, the mobilization rate, the readiness of units stateside 
versus those deploying, increased casualties, all of these 
things are part of increased risk. It has so many facets and so 
many angles. It is on an individual level and it is on a unit 
level and it is on a system level. It is across the force.
    Congress does not have a clear understanding of what this 
means, but it is the Department's favorite solution to meeting 
budget cuts. So I would argue that this committee should take 
the lead in pushing for some version, some type of unclassified 
risk assessment. I know that the chairman does his. It is 
classified and it is not helpful to anybody in this town to 
understanding what you are signing up for when you agree to the 
President's budget in most of its form.
    Then something else, I think, sort of the long term, to 
understand better in the long term. I am not one for adding 
more plans without taking a few away that are unnecessary. So I 
will put that out up front. But alongside the shipbuilding and 
aviation plans, there should be some type of discussion or 
annex with a long-term technology road map, R&D [research and 
development] and S&T [science and technology] focused, where we 
can understand linking things like the air and sea battle 
concepts to these kinds of number plans but also to future 
investments.
    When is the Navy going to bring back that NextGen surface 
combatant? It dropped out a few years ago, never to be heard 
from again, but we know they need one. They need to be talking 
about it. We know there needs to be a follow-on, some type of 
fighter after the Joint Strike Fighter, whether it is manned or 
unmanned. We know that we need a new rotary-wing aircraft, not 
upgrades to the current system, satellite--next generation PGMs 
[precision-guided munitions] and other weapons systems. All of 
these things need to be put together holistically alongside 
these numbers plans so you understand broadly the investment 
portfolio and priorities of the Department.
    Mr. Wittman. Dr. Cropsey, if we can do that, we have got 
about a minute 47 left in the vote. So I am going to have to 
scoot on out of here. But I wanted to make sure I give you an 
opportunity.
    Dr. Cropsey. Thank you, sir. The 30-year shipbuilding plan 
is not a strategy. It is a way of implementing a larger 
strategy. I think your question goes to a very broad issue, and 
that is, what is the national strategy? And the way that that 
has been addressed in the past is that Congress says we want a 
document, and the document that you get says the 
administration--not this, not the preceding, all of them, going 
back let's say to the Eisenhower administration--say we want 
this, this, this, this, and this. And then how are we going to 
get there? Well, that part is in some other document which we 
have never read.
    The recently left Under Secretary of Defense for Policy, 
Michele Flournoy, wrote a good paper several years ago about 
President Eisenhower's Solarium project. You are familiar with 
that. The Solarium project is I think an excellent model of how 
you go about crafting a national strategy that has an effect on 
the budget, on our plans, on the Defense Department. I think it 
is a commendable one. I think it should be imitated. If the 
President himself or herself takes direct interest in that 
strategy and direct interest in implementing it, then I think 
you start to have an effect.
    And I think that the way that Congress has influence over 
that is by asking officials who you speak with: What is the 
strategy and how are you going to accomplish it? Not by saying, 
we need a document.
    Mr. Wittman. I think that is a good point to make sure 
there is closure there, not just the strategy itself, but how 
do you hope to accomplish that and maybe have a little longer-
term perspective in how that comes to be.
    Witnesses, thank you so much. Mr. O'Rourke, Ms. Eaglen, Dr. 
Cropsey, thank you all so much for spending time with us today 
to give us your insight. As you can imagine, very challenging 
issues before us to try to make sure planning reflects some 
semblance of reality in a very challenging budget time. So for 
us to help navigate that and get your perspective is very, very 
helpful. So, again, thank you so much for spending your time 
with us today. I look forward to continued conversations.
    Also if you have thoughts or ideas after this hearing, 
please feel free to share those with us. We will make sure that 
as we pursue this hearing process, we want to make sure we give 
the widest perspective possible on that. So again, we want to 
encourage your comments, too, as this process moves along as we 
finish these hearings.
    Thank you all again. The Subcommittee on Oversight and 
Investigations is now adjourned.
    [Whereupon, at 4:05 p.m., the subcommittee was adjourned.]



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                            A P P E N D I X

                             April 18, 2012

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              PREPARED STATEMENTS SUBMITTED FOR THE RECORD

                             April 18, 2012

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