[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]






 
                         [H.A.S.C. No. 113-116]

                    CRUISER AND DESTROYER MODERNIZA-

      TION AND LARGE SURFACE COMBATANT FORCE STRUCTURE ASSESSMENT

                               __________

                                HEARING

                               BEFORE THE

             SUBCOMMITTEE ON SEAPOWER AND PROJECTION FORCES

                                 OF THE

                      COMMITTEE ON ARMED SERVICES

                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

                               __________

                              HEARING HELD

                             JULY 10, 2014
                             
                             
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             SUBCOMMITTEE ON SEAPOWER AND PROJECTION FORCES

                  J. RANDY FORBES, Virginia, Chairman

K. MICHAEL CONAWAY, Texas            MIKE McINTYRE, North Carolina
DUNCAN HUNTER, California            JOE COURTNEY, Connecticut
E. SCOTT RIGELL, Virginia            JAMES R. LANGEVIN, Rhode Island
STEVEN M. PALAZZO, Mississippi       RICK LARSEN, Washington
ROBERT J. WITTMAN, Virginia          HENRY C. ``HANK'' JOHNSON, Jr., 
MIKE COFFMAN, Colorado                   Georgia
JON RUNYAN, New Jersey               COLLEEN W. HANABUSA, Hawaii
KRISTI L. NOEM, South Dakota         DEREK KILMER, Washington
PAUL COOK, California                SCOTT H. PETERS, California
BRADLEY BYRNE, Alabama
               David Sienicki, Professional Staff Member
              Phil MacNaughton, Professional Staff Member
                          Katie Rember, Clerk
                            C O N T E N T S

                              ----------                              

                     CHRONOLOGICAL LIST OF HEARINGS
                                  2014

                                                                   Page

Hearing:

Thursday, July 10, 2014, Cruiser and Destroyer Modernization and 
  Large Surface Combatant Force Structure Assessment.............     1

Appendix:

Thursday, July 10, 2014..........................................    31
                              ----------                              

                        THURSDAY, JULY 10, 2014
 CRUISER AND DESTROYER MODERNIZATION AND LARGE SURFACE COMBATANT FORCE 
                          STRUCTURE ASSESSMENT
              STATEMENTS PRESENTED BY MEMBERS OF CONGRESS

Forbes, Hon. J. Randy, a Representative from Virginia, Chairman, 
  Subcommittee on Seapower and Projection Forces.................     1
McIntyre, Hon. Mike, a Representative from North Carolina, 
  Ranking Member, Subcommittee on Seapower and Projection Forces.     3

                               WITNESSES

Stackley, Hon. Sean J., Assistant Secretary of the Navy 
  (Research, Development and Acquisition), RADM Thomas S. Rowden, 
  USN, Director, Surface Warfare (N96), Office of Chief of Naval 
  Operations, and RDML Lawrence E. Creevy, USN, Deputy Commander 
  for Surface Warfare, Naval Sea Systems Command (NAVSEA 21).....     4

                                APPENDIX

Prepared Statements:

    Forbes, Hon. J. Randy........................................    35
    Stackley, Hon. Sean J., joint with RADM Thomas S. Rowden and 
      RDML Lawrence E. Creevy....................................    38

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:

    Mr. Langevin.................................................    51
 CRUISER AND DESTROYER MODERNIZATION AND LARGE SURFACE COMBATANT FORCE 
                          STRUCTURE ASSESSMENT

                              ----------                              

                  House of Representatives,
                       Committee on Armed Services,
            Subcommittee on Seapower and Projection Forces,
                           Washington, DC, Thursday, July 10, 2014.
    The subcommittee met, pursuant to call, at 4:00 p.m., in 
room 2212, Rayburn House Office Building, Hon. J. Randy Forbes 
(chairman of the subcommittee) presiding.

  OPENING STATEMENT OF HON. J. RANDY FORBES, A REPRESENTATIVE 
     FROM VIRGINIA, CHAIRMAN, SUBCOMMITTEE ON SEAPOWER AND 
                       PROJECTION FORCES

    Mr.  Forbes. I want to welcome our members and our 
distinguished panel of experts for today's hearing focused on 
our large surface combatants, and particularly our cruisers and 
destroyers. We have testifying before us the Honorable Sean J. 
Stackley, the Assistant Secretary of the Navy; Rear Admiral 
Thomas Rowden, Director of Surface Warfare Division, Office of 
the Chief of Naval Operations; and Rear Admiral Lawrence 
Creevy, Deputy Commander for Surface Warfare, Naval Sea Systems 
Command.
    I want to thank each of the three of you for being here, 
for your service to our country, and also for your patience 
with us on these votes, and we are sorry for the delay in 
getting started with the hearing.
    Before we begin, I wanted to congratulate Rear Admiral 
Rowden on his selection as the next Commander, Navy Surface 
Forces, and his assumption of command later this month.
    Admiral, we thank you for that service and for what you 
have done for our country. We have appreciated your advice and 
counsel, and I am confident the Navy will be in good hands when 
you assume command.
    As to this hearing, I appreciate having received a copy of 
the 30-year shipbuilding plan. We continue to have reservations 
about the optimism that is built into the shipbuilding plan and 
believe that the administration is disingenuous in their 
sincerity to apply resources toward our Nation's shipbuilding 
efforts.
    This year I believe that our committee was able to provide 
additional resources to the shipbuilding account and start to 
change the negative shipbuilding trend lines. But revitalizing 
American seapower cannot be done in just 1 or 2 fiscal years. 
It will take a generational commitment from those sitting in 
this room today and others to follow.
    As to the administration's proposal to place 11 cruisers 
and 3 amphibious ships into layup status, I continue to 
question how putting these ships into long-term layup status 
improves our national defense. Let me be clear, the term 
``phased modernization'' that has been used by the Navy to 
describe its 10-year plan is a misleading one that asks 
Congress to agree to take half of our cruiser fleet out of 
service with the hope that one day, in the 2020s, these ships 
will all be returned to our fleet.
    The Navy has indicated that the 306-ship Navy is required 
to meet combatant commander requirements. The last independent 
QDR [Quadrennial Defense Review] indicated a force structure of 
346 ships was required. Despite what number you choose, we are 
still significantly less than the force structure, both in 
terms of capacity and lethality, that we need to meet even the 
minimum requirements. That is why it is perplexing to me that 
this administration, one that has now produced a Defense 
Strategic Guidance and QDR in the last 2 years that prioritizes 
seapower as a central enabler of our defense strategy, has 
proposed to lay up some of our most valuable and lethal surface 
combatants.
    With the decrease in available assets, we will undoubtedly 
increase our deployment times of our ships, burning out the 
sailors and ships that support our national security. I reject 
any notion that we should lock into place the negative 
consequences of sequestration and vigorously oppose any 
reduction of some of our most capable surface combatants to the 
altar of fiscal frugality. If the U.S. Navy needs more 
resources to meet its baseline requirements, then this Congress 
and the Department of Defense should begin a serious discussion 
about how to rebalance the budget resources available to fully 
fund our national seapower priorities.
    I am also concerned that the administration may already be 
placing some of these cruisers and amphibious ships into a 
layup status in contravention to congressional direction. I 
would note that the National Defense Authorization Act for 
fiscal year 2014 prohibited the retirement or layup of certain 
cruisers and amphibious ships. I would encourage our witnesses 
to carefully review the readiness ratings and deployment 
schedules of these ships to ensure that they continue to serve 
our Nation. Taking action that impacts the fleet prior to final 
congressional direction should be rigorously avoided.
    With regards to the overall force structure of the Navy, I 
understand that the Navy has decided to continue and count 
ships that the Navy has proposed to lay up for some cruisers 
that would not be readily available to deploy. I also 
understand that the Navy counts hospital ships and patrol ships 
as ships to meet our force structure. I consider these 
approaches as a mask to the true plight of our Navy and believe 
these efforts only serve to cover the true extent of the 
reductions in our Navy.
    Let's be honest today, according to the historical 
accounting rules, in fiscal year 2015 the Navy will have just 
274 ships in its fleet. This is an unacceptable figure that is 
the result of two decades of neglect. I am fully committed and 
I think most of the people in this subcommittee are fully 
committed to reversing this trend.
    As to our destroyer fleet, I believe the Navy is on the 
right track with introducing an advanced radar on the next 
series of destroyers, also known as DDG Flight III. I still 
have concerns with regards to the multiplicity of combat system 
suites on our destroyers. These varying capabilities have 
significant problems on the fleet's ability to properly train 
and support our sailors, and I hope that we will be able to 
receive additional information on this important issue.
    And with that, I turn to my good friend and colleague, the 
ranking member of the subcommittee, Mike McIntyre, for any 
remarks he would like to make.
    Mike.
    [The prepared statement of Mr. Forbes can be found in the 
Appendix on page 35.]

 STATEMENT OF HON. MIKE MCINTYRE, A REPRESENTATIVE FROM NORTH 
    CAROLINA, RANKING MEMBER, SUBCOMMITTEE ON SEAPOWER AND 
                       PROJECTION FORCES

    Mr.  McIntyre. Thank you. Thank you, Chairman. And thanks 
for holding this important hearing and for the continued 
excellent leadership you give us and the very valid and 
concerning points that you have raised.
    This is an important time for our cruiser and destroyer 
fleets, and critical that during these challenging budget times 
we find creative ways to ensure the Navy's entire fleet of 
large surface combatants remain relevant and reach their 
expected service lives.
    With regard to the remaining 22 guided missile cruisers in 
the fleet today, we continue the examination of what the most 
cost-effective plan is for modernizing these ships and ensuring 
that they will reach all of their expected service lives.
    The Navy has presented Congress with a Phased Modernization 
Plan that would upgrade these ships with the latest 
technological advances in combat systems and maintenance 
improvements, while also reducing personnel on the ships and 
moving them to critically gapped billets. The Navy has 
estimated this plan would save $3.5 billion in the next 5 years 
and a total of $4.7 billion overall.
    We know the destroyer fleet continues its modernization, 
and upgrades are planned to reduce the workload and total ship 
class ownership costs and to provide enhanced warfighting 
capabilities. The Navy has continued its attempt to modify the 
modernization schedule in an effort to provide the greatest 
capabilities to the fleet. We know that we must ensure that we 
have the most capable and combat-relevant ships as possible and 
that they all reach their expected service lives.
    These are challenging times, given the fiscal environment 
that we are in. We know it is absolutely critical we find 
creative ways to ensure that we have a modernized and relevant 
fleet of large surface combatants and also provide flexibility 
when possible. And I do share the chairman's concern that we 
have as many ships as necessary as well. I know that is an 
ongoing concern of our subcommittee, as well as our full 
committee.
    Thank you to the witnesses for your service. Thank you for 
your commitment to our Navy, to our country's armed services 
and our national security, and thank you for your time today 
and for your patience with our delayed voting.
    Thank you, Mr. Chairman.
    Mr.  Forbes. Thank you, Congressman McIntyre.
    And now we would love to hear your opening remarks. And as 
we have mentioned to you, we are going to give you all the last 
word at the end of all of this so that each of you will have an 
opportunity, if you have misstated anything or we haven't asked 
you a question you think is important, we will make sure you 
get time to put that on the record.
    So, Mr. Secretary, it is my understanding you are going to 
start off, and so we look forward to your comments.

STATEMENT OF HON. SEAN J. STACKLEY, ASSISTANT SECRETARY OF THE 
 NAVY (RESEARCH, DEVELOPMENT AND ACQUISITION), RADM THOMAS S. 
 ROWDEN, USN, DIRECTOR, SURFACE WARFARE (N96), OFFICE OF CHIEF 
 OF NAVAL OPERATIONS, AND RDML LAWRENCE E. CREEVY, USN, DEPUTY 
   COMMANDER FOR SURFACE WARFARE, NAVAL SEA SYSTEMS COMMAND 
                          (NAVSEA 21)

               STATEMENT OF HON. SEAN J. STACKLEY

    Secretary  Stackley. Yes, sir. Chairman Forbes, Ranking 
Member McIntyre, distinguished members of the subcommittee, 
thank you for the opportunity to appear before you today to 
address cruiser and destroyer modernization. With the 
permission of the subcommittee, I propose to provide brief 
opening remarks and submit a separate joint statement for the 
record.
    Mr.  Forbes. Without objection, all of your full statements 
will be made a part of the record.
    Secretary  Stackley. Thank you, sir.
    Earlier this year in testimony before this subcommittee, 
the Navy described how we had reshaped our shipbuilding, 
aviation, and tactical vehicle plans to reflect the priorities 
of the defense strategy as impacted by sequestration in fiscal 
year 2013 and constrained by the Bipartisan Budget Act in 
fiscal years 2014 and 2015.
    In total, the Navy-Marine Corps budget request in the 
Future Years Defense Plan falls $38 billion below the level 
planned just 1 year ago and is further threatened by 
sequestration in 2016 and beyond. To minimize the impact of 
this reduced top line we have leveraged every tool available to 
drive down cost. We have tightened requirements, maximized 
competition, and capitalized on multiyear procurements for 
major weapon systems. We have attacked our cost of doing 
business from headquarters billets to service contracts so that 
more of our resources can be dedicated to making warfighting 
capability.
    In this context, in balancing resources and requirements we 
have placed a priority on forward presence, near-term 
readiness, stability in our shipbuilding program, and 
investment in modernization and those future capabilities 
critical to our long-term technical superiority. In the end, 
however, the impact of a $38 billion reduction across the 
Future Years Defense Plan [FYDP] has a real impact on our 
programs. These impacts are exacerbated when, as made clear in 
our shipbuilding report recently delivered to Congress, you 
overlay the budget required to recapitalize the Ohio sea-based 
strategic deterrent in the out-years and when you consider the 
effects of sequestration in 2016 and out.
    This subcommittee is keenly aware of these extraordinary 
challenges posed to Navy shipbuilding and modernization, and 
made most clear by this year's budget submission, which 
unfunded the 2016 refueling complex overhaul of the USS George 
Washington. We are today making every effort to replan near $7 
billion required across the FYDP to refuel the carrier, plus 
maintain its air wing, manpower, and support. We have released 
the balance of advance procurement funding for 2014 to continue 
planning efforts in order to best maintain our options and 
retain skilled labor at the shipyard, while we await 
determination by Congress regarding sequestration in 2016. Yet, 
this also increases the pressure on other programs.
    With particular regard to Navy shipbuilding and fleet 
maintenance and modernization, we remain on track towards our 
objective for a 300-ship Navy by the end of this decade. In 
total, 43 ships are under construction across 8 ship classes in 
shipyards and weapons factories stretching across the country.
    Of equal importance to our plan is our ability to maintain 
and modernize the in-service fleet to ensure each ship in the 
plan possesses those capabilities required by the combatant 
commanders and to ensure each ship in the plan meets its 
expected service life. In fact, for many of our major 
combatants, more than merely meet the expected service life, 
which by itself is a reversal of past history, we need to 
extend their service life. And this is only made possible by 
rigorous planning and execution of both maintenance and 
modernization of these workhorse ships.
    With specific regard to the surface combatant force, the 
limitations of our budget have driven us to a dual-pronged 
approach to modernize both the Arleigh Burke destroyer and 
Ticonderoga cruiser classes. Across the 2015 to 2019 period, in 
total the Navy has programmed $5.6 billion towards Aegis ship 
maintenance and modernization, which in this budget environment 
is a strong statement regarding our commitment to these ships.
    Eighteen DDG-51 destroyers are programmed for midlife 
modernization, including Flight I, Flight II, and Flight II 
Alpha ships. Eight of these ships will receive upgrades to 
combat capabilities, including ballistic missile defense, with 
the balance completing necessary hull, mechanical, and 
electrical [HM&E] system upgrades and repair to enable full or, 
in the case of the two Alpha ships, extended service life.
    Regarding the Ticonderoga class, the Navy has 22 Aegis 
cruisers, which are principally responsible for performance of 
air defense commander duties in support of our carrier battle 
groups. Today, the oldest 11 cruisers, CG-52 through 62, have 
been modernized and will deploy with carrier battle groups 
until their end of service, which commences in 2019.
    The Navy plans to modernize and extend the service life for 
the remaining 11 cruisers, CG-63 through 73, through an 
extended phased modernization program. And the elements of the 
program are that we will commence in 2015 with inspection, 
planning, material procurement for repair and modernization of 
hull, mechanical, and electrical systems for all 11 cruisers. 
The work will be scheduled to ensure efficient execution, and 
to the extent practical, to provide critical stability to the 
industrial base.
    Once complete the HM&E phase, these cruisers will be 
maintained in the modernization program until completion of 
their subsequent combat systems modernization, which will be 
aligned with the retirement of the first 11 cruisers.
    This Navy plan is made affordable by drawing down manpower 
and operating costs during the extended modernization period, a 
cost avoidance of $4.7 billion. Further, the Navy plan sustains 
the critical air defense commander capabilities of the cruiser 
force beyond its current retirement in 2029, well into the 
2040s.
    The reality is that the Navy will be unable to recapitalize 
this critical capability throughout the period of construction 
of the Ohio replacement submarine, and without this Phased 
Modernization Plan we will be unable to ensure our fleet 
possesses an air defense commander capability throughout the 
decade of the 2030s.
    This plan also retains flexibility, if needed, to 
accelerate completion of the modernization, should the security 
demands dictate it, subject to funding and training of 
additional crews. Alternatively, if, as directed by the House-
passed version of the 2015 National Defense Authorization Act, 
we are precluded from executing this Phased Modernization Plan, 
then the $4.7 billion costs otherwise avoided by the plan will 
be paid in the near term, depleting the ship's maintenance, 
operation, sustainment, and support fund and reducing resources 
for our fleet readiness, then reducing our force structure and 
its capabilities in the long term.
    In summary, in response to the cumulative impact of 
sequestration in 2013, the BBA [Bipartisan Budget Act] level 
funding in 2014 and 2015, and the reductions across 2015 
through 2019, the Department has been judicious in controlling 
cost, reducing procurements, stretching developments, and 
planning modernization. Many of these actions add cost to our 
programs and risk to our industrial base, and add risk to our 
ability to meet the requirements of the Defense Strategic 
Guidance. However, they represent the best balance of 
readiness, capability, and affordability for the budget in 
hand.
    The course set by our Phased Modernization Plan is an 
example of the balancing act required by the fiscal 
environment. Absent an increase to our budget, changing this 
course will increase our costs and therefore our risk to the 
Navy and to the Nation.
    Mr. Chairman, thank you for the opportunity to appear 
before you today, and we look forward to answering your 
questions.
    [The joint prepared statement of Secretary Stackley, 
Admiral Rowden, and Admiral Creevy can be found in the Appendix 
on page 38.]
    Mr.  Forbes. Mr. Secretary, thank you so much for your 
remarks.
    And, Admiral, we look to you now for any comments that you 
would like to offer.
    Admiral  Rowden. Mr. Chairman, I have no additional 
remarks, sir, and I am standing by for your questions, sir.
    Mr.  Forbes. Thank you.
    Admiral.
    Admiral  Creevy. Mr. Chairman, I have no additional remarks 
either, and I am standing by for your questions.
    Mr.  Forbes. Good. Well, gentlemen, thank you so much for 
coming and being with us today.
    I am going to start. I normally defer my comments until the 
end, but since basically we are here today challenging a 
provision of the defense authorization bill that was passed by 
the House, I am going to start with a few questions and then 
hopefully come back with some at the end.
    Mr. Secretary, you can respond to this or either admiral 
can do it, so it is not trying to put anybody on the spot. So 
whoever wants to respond is okay. But we hear from time to time 
a concern we have with the Navy and our combatant commanders 
that in 2007 we were able to meet 90 percent of their 
requirements. And this year, it is my understanding, we are 
going to meet somewhere less than 50 percent or somewhere in 
that area. And the pushback we always get is that our combatant 
commanders always ask for much more than they really need.
    But when I come today, I want to ask you guys how many 
ships does the United States Navy believe, not that we want, 
not that our combatant commanders just think we need to have, 
but how many ships do we actually need in the United States 
Navy?
    Secretary  Stackley. Yes, sir. Let me go ahead and start, 
and I will turn to Admiral Rowden to add on to that.
    Not a simple question. There is not a number on a wall that 
you go towards. You referred to the 306-ship number that is 
associated with our force structure assessment that was 
completed at the end of 2012. That number has not changed.
    That force structure assessment is targeting a 2024 period 
of time. It is not saying that today we need 306; it is looking 
out ahead out at 2024 and saying we need to build a force 
structure of about 306 ships, a balanced force structure that 
has 11 aircraft carriers, 88 submarines, 88 surface combatants, 
33 amphibs [amphibious assault ships], 29 auxiliary ships, and 
33 support ships, right on down the line. And I don't want to 
leave out my Ohio-class and Ohio-class replacement, a dozen 
Ohio-class replacement submarines, as well the four SSGNs 
[cruise missile submarines].
    So the force structure assessment lays that out. Today in 
terms of how many ships that we require, we respond to the 
combatant commanders' demand as you highlighted. Today's force 
structure, by ship count 289, by the current number counting 
283, by the previous ship counting rules that we had in place, 
today's force structure produces about 100 ships on deployment 
consistently around the world. That is true today, that is true 
this year. And if you go back to 2007 and you look at the 
number of ships that the Navy had deployed, it was true in 
2007. It has been very consistent, about 100 ships deployed, 
responding to----
    Mr.  Forbes. Secretary, when your admirals come to meet 
with us, they tell us that when they look at this overall mix, 
it is not just the number of ships we have deployed, it is the 
number of ships we have ready in case we have a surge or we 
need those ships there. Is that an accurate statement or are 
the admirals misleading us when they tell us that?
    Secretary  Stackley. No. A hundred ships meet our presence 
requirements, the surge addresses major combat operations 
demands or events of the day where there is demand to increase 
the number on deployment.
    Mr.  Forbes. So when I look at you telling me that you need 
306 ships in the Navy, is that a figure that you have 
established from an analysis somewhere that has been done to 
say that is what needed, or is that just something that we are 
basically pulling out of the air and saying, we think that 
would be a good goal to push towards?
    Secretary  Stackley. No, sir, that is a thorough analysis 
that went behind the force structure assessment that was 
conducted by the CNO [Chief of Naval Operations], completed in 
December 2012, and delivered to the Hill.
    Mr.  Forbes. So then, if we said that we needed 306 ships 
and that is the plan that you have at least submitted over to 
us--is that a fair statement in the 30-year shipbuilding plan--
--
    Secretary  Stackley. Yes, sir.
    Mr.  Forbes [continuing]. How many cruisers do we need?
    Secretary  Stackley. Okay. So in that plan we don't break 
out cruisers separate from large surface combatants.
    Mr.  Forbes. But there is a comment in here based on the 
2012 assessment of the number of cruisers we need. Is that a 
fair statement?
    Secretary  Stackley. Let me, yes, sir.
    Mr.  Forbes. Please.
    Secretary  Stackley. We break out 88 large surface 
combatants. Today we have 22 cruisers. So in terms of how many 
we need, air defense commander, that role, we need an air 
defense commander with deploying battle groups. So if you 
assume 11 carriers, 11 carrier battle groups, 11 air defense 
commanders. Today we have two cruisers per carrier battle 
group, which gives us flexibility, gives us redundancy, it 
gives us the ability to adjust based on ship operating 
schedules, so we are not pegged to a one-for-one ratio.
    Mr.  Forbes. When I look at your 30-year shipbuilding plan, 
and help me if I am misreading it, there is an assessment that 
says that the 2012 assessment said we needed 22 cruisers. Is 
that incorrect?
    Secretary  Stackley. In the 30-year shipbuilding plan?
    Mr.  Forbes. Yes, sir.
    Secretary  Stackley. Eighty-eight large surface combatants, 
22 cruisers, 66----
    Mr.  Forbes. But it did say 22 cruisers?
    Secretary  Stackley. Yes, sir, but they go away.
    Mr.  Forbes. What do you mean they go away?
    Secretary  Stackley. They retire over time.
    Mr.  Forbes. So when it says that we needed 22 cruisers, 
what time period did we need the 22 cruisers for?
    Secretary  Stackley. Twenty-two cruisers is what we have 
today. The force structure assessment was targeting a 2024 
timeframe. Our CG-47 class starts to retire in 2019, and it is 
on a steady retirement path to the end of the 2020s decade. 
What we need to do is we need to recapitalize those ships with 
a future ship class, either an upgrade to a DDG-51 [USS Arleigh 
Burke], a Flight IV type of ship, or a cruiser. We do not have 
the ability to do that during the period of construction of the 
Ohio replacement.
    Mr.  Forbes. You are talking about if you don't, if you 
have the dollars that you currently have. But when we look at 
the 22 cruisers that this assessment says that we have, why 
don't we just get rid of the 11 cruisers?
    Secretary  Stackley. We need that air defense commander 
capability, which goes beyond----
    Mr.  Forbes. Do we need all those 11 cruisers?
    Secretary  Stackley. We need 11 cruisers pegged to our 11 
carrier battle groups.
    Mr.  Forbes. I understand, but we have 22 now and you say 
we need 11. Why don't we just get rid of those 11 cruisers?
    Secretary  Stackley. 2019 we will be down to 10, 2020 we 
will be down to 9, 2021, and by 2026 we will be done. We need 
to sustain that cruiser capability, that air defense 
capability.
    Mr.  Forbes. But why put them in the layup and hope that 
you are going to modernize them? Why not just get rid of these 
11 cruisers?
    Secretary  Stackley. Sir, we can't afford to get rid of the 
cruisers.
    Mr.  Forbes. Well, last year you came in with a proposal to 
get rid of seven cruisers.
    Secretary  Stackley. Yes, sir.
    Mr.  Forbes. Why were you going to say that we could get 
rid of seven cruisers, but this year you say we couldn't get 
rid of those cruisers?
    Secretary  Stackley. Two things. At no point in time has 
the Navy wanted to get rid of our cruisers. Last year when we 
had proposed to decommission early 7 of the 22 cruisers in our 
plan, there was a future flight destroyer that we had 
anticipated we would be able to recapitalize that capability. 
You don't see that in this year's 30-year plan, because we know 
we cannot afford to recapitalize those cruisers during the 
period of the Ohio replacement.
    Mr.  Forbes. When you look at this thing you called a 
phased modernization--and by the way, Congress has not 
prohibited you from doing modernization, what we are doing is 
prohibiting you from doing the layup. Because there are no 
funds in this 30-year plan and you don't have any projected 
funds to do the build-out that you need in this 30-year plan, 
do you?
    Secretary  Stackley. The budget requirements that go with 
that 30-year plan, when you look at, again, the period of the 
2020s through about 2034, that exceeds any shipbuilding budget 
that we have seen since.
    Mr.  Forbes. And that would be true even if you didn't have 
the Ohio-class replacement. Isn't that correct?
    Secretary  Stackley. It exceeds what we have budgeted over 
the last 10 years during that period, but it does not reach the 
level that we reached back in the buildup of the 1980s.
    Mr.  Forbes. I understand that. I wish we were back in the 
1980s. But I am talking about over the last 20 years when we 
have cut down our ships, so far in the 1980s we built them up 
to 600-and-some ships, we have been taking them down. And what 
I just want to ask you is, I am looking at a 30-year 
shipbuilding plan, and I am asking you that, based on the 
dollars you have had over the last 20 years, can you build this 
30-year shipbuilding plan?
    Secretary  Stackley. No, sir.
    Mr.  Forbes. Can you do the modernization of these cruisers 
with the dollars that you have and still meet this shipbuilding 
plan that you have submitted to Congress based on the dollars 
that you have been allocated over the last 20 years?
    Secretary  Stackley. The key to us being able to modernize 
those 11 cruisers, as we have laid out in our plan, which 
allows us to reduce the manpower, pull them out of operation 
and sustainment during an extended modernization period so that 
we can replace 1 for 1 the first 11 cruisers.
    Mr.  Forbes. Well, Mr. Secretary, my question is the 
dollars. Do you have the dollars to do that? And can you 
certify to this committee that you have the dollars, if you get 
the same dollars you have had over the last 20 years per year, 
can you do that modernization and do the shipbuilding plan that 
you have submitted to Congress?
    Secretary  Stackley. That plan, with the letter that 
accompanies it, certifies through the FYDP. It does not portend 
to certify budget levels outside of the FYDP.
    Mr.  Forbes. I understand, and your modernization goes 
outside the FYDP.
    Secretary  Stackley. Yes, sir.
    Mr.  Forbes. So what my question to you is, can you tell us 
that based on the dollars you have had over the last 20 years, 
if the Navy got the same dollars, and you are suggesting they 
may get less, but if they got the same dollars they had, can it 
do that modernization and also do this 30-year shipbuilding 
plan?
    Secretary  Stackley. The only way we could execute that 
shipbuilding plan and the modernization that is in that plan 
that modernizes those cruisers, the only way we can do that, 
assuming that we have the same budget that we had in the last 
20 years, is prioritizing that modernization of those ships and 
that construction over--over--the rest of our budget.
    Mr.  Forbes. So, Mr. Secretary, I don't want to argue with 
you, I just want to find out.
    Secretary  Stackley. Yes, sir. We are actually in very--we 
are in strong agreement here, sir.
    Mr.  Forbes. Yeah. But I just want to make sure we are 
clear. If you have the dollars you had over the last 20 years--
and I have asked you, I have asked the Secretary, do you have 
any scintilla of hope of where you are going to get additional 
dollars--so if we assume you are going to get the same amount 
of dollars you have had over the last 20 years and let's say we 
can hold that and you don't decrease, my question is, would you 
have enough dollars to do the modernization that you are 
talking about and do this shipbuilding plan that you have 
submitted to this Congress?
    Secretary  Stackley. As stated right in that report, sir, 
as laid out clearly in that report, the funding requirements 
over the period of 2020 through 2034 exceed the budget that we 
have had for the last 30 years.
    Mr.  Forbes. Then why would you suggest to us that we 
should have a confidence level? When the Navy came in and told 
us last year it wanted to get rid of seven cruisers, this year 
it now says it wants to have this phased modernization, which 
means laying them up until you can get more dollars to come 
back and do the modernization. If you don't have the dollars 
necessary to do that modernization and to do this shipbuilding 
plan, give me the comfort level of how you are going to build 
these ships and do that modernization and take those ships out 
of layup.
    Secretary  Stackley. Yes, sir. So it starts with the 
funding that we have in hand. We have approximately $2.2 
billion that has been set aside and we brought more money 
inside the FYDP to go towards the modernization plan, and 
rather than sit on the ships, our proposal is that we commence 
in 2015 with the execution of that modernization program and we 
get through the HM&E upgrades that are required to extend the 
service life----
    Mr.  Forbes. Mr. Secretary, you don't have the money to do 
that. You wouldn't have the money to do this plan you have 
submitted to us and do that modernization. Isn't that a fair 
statement?
    Secretary  Stackley. We have the funding in the FYDP to 
execute----
    Mr.  Forbes. I am talking about the 10-year period of time 
that you have talked about this phased modernization, this 
phraseology that you all brought in here. Really what you're 
talking about that you can guarantee us is you can lay them up, 
but you can't guarantee me today that you can do the 
modernization and put them back out again, can you?
    Secretary  Stackley. I can tell you what the requirement 
is----
    Mr.  Forbes. I know what the requirement is.
    Secretary  Stackley [continuing]. For the balance of the 
work in the next FYDP, the 2020 through 2024 FYDP. I can't 
certify what a future Congress or Department of Defense is 
going to do----
    Mr.  Forbes. But what you can tell me is, based on the last 
20 years, if you get those same dollars you can't meet this 
plan, can you?
    Secretary  Stackley. There are two parts, sir.
    Mr.  Forbes. Okay.
    Secretary  Stackley. The shipbuilding program--that report 
talks to the budget requirements for the shipbuilding program 
as opposed to the modernization program. We don't try to look 
back over the past and project in the future specifically the 
modernization program.
    As it relates to the cruisers, the funding requirement 
inside the FYDP for the cruiser modernization program is about 
$3.5 billion and most of that funding is in hand and the 
balance is in our program plan.
    The remainder outside of the FYDP is about $5.5 billion, 
$5.3 billion. We know that is the requirement. I cannot certify 
to you today that a future Department, a future Congress is 
going to lay that money in, but our program plan for executing 
it as it is laid out is only made affordable if during this 
period we are able to reduce the costs associated with manpower 
and operating the cruisers during the phased modernization 
period so that we can pay the balance. Otherwise, we have just 
doubled the reach.
    Mr.  Forbes. Mr. Secretary, the last thing I will just ask 
you before I turn it over to Mr. McIntyre is this. When you are 
looking at the number of ships that the Navy requires, their 
requirements, we are talking about the number of ships that are 
capable of being deployed, isn't that correct, not the number 
of ships that are laid up?
    Secretary  Stackley. We are talking about the number of 
ships that the Navy needs in order to produce what we have 
historically deployed with, which is about 100 ships on 
deployment.
    Mr.  Forbes. And when we took our missile defense systems 
out of Europe and put them on the back of the Navy, can you 
tell me if the Navy even knows what the requirements are today 
that we need to do the missile defense capabilities that the 
country needs?
    Secretary  Stackley. We get our requirements from the 
combatant commanders.
    Mr.  Forbes. All I am asking is, do you know those 
requirements today of what we need for that BMD [ballistic 
missile defense] capability? Does the Navy know that?
    Secretary  Stackley. We know what the demand is today and 
we are meeting today's demand. But, sir, we don't look at just 
today's requirements, today's demand. We have got to meet an 
increasing demand over the next 5 to 10, 15----
    Mr.  Forbes. Mr. Secretary, I just don't want to take up 
any more time. But my point is I understand that. But you come 
in here when you talk about combatant commanders' requirements 
and on the one hand you say, we don't listen to them because 
they are too big. Yet, you were meeting 90 percent of them in 
2007, we are meeting less than 50 percent this year, you know, 
and you say, well, that is because they ask for everything.
    Then on BMD my question is this: Does the Navy know what 
our BMD requirements are today? I understand we need to look at 
them tomorrow, 5 years from now. Do you know what they are 
today?
    Secretary  Stackley. We know how many ships we need on 
station in the Sea of Japan, we know how many ships we need on 
station in the Mediterranean, and we know what we need to 
accompany our carrier battle group.
    Mr.  Forbes. Do we have a gap in our BMD requirements 
today?
    Secretary  Stackley. I wouldn't say we have a gap today. 
What I would say we have a very stressed force trying to meet 
the----
    Mr.  Forbes. Let me ask you this, and I want you to be very 
clear about how you answer this. Can we meet the BMD 
requirements we have today?
    Secretary  Stackley. Sir. We can put the ships on station 
where they are required with BMD capability, but you know as 
well as I do that the--I don't want to go classified here----
    Mr.  Forbes. I don't want you to.
    Secretary  Stackley [continuing]. You know as well as I do 
what the threat is and where we need to be heading. So it is 
not a simple matter of the number of ships.
    Mr.  Forbes. But when we pull these cruisers out, some have 
BMD capabilities on them.
    Secretary  Stackley. Yes, sir. Yes, sir.
    Mr.  Forbes. When they are laid up we will have less of 
those requirements met, not more. Isn't that correct?
    Secretary  Stackley. Four of the cruisers have the earliest 
baseline of BMD capability, that is correct, sir.
    Mr.  Forbes. Okay. Well, thank you, Mr. Secretary.
    And Mr. McIntyre.
    Mr.  McIntyre. Thank you, Mr. Chairman.
    Just a couple of brief questions. What is the--if you can, 
just so that we are all on the same page here--the difference 
between a cruiser and destroyer in the important roles they 
play within the carrier strike group? And after you delineate 
those differences and their role, what would be the impact to 
that carrier strike group if there were no cruisers available 
to fill the air defense or air warfare commander role?
    Admiral  Rowden. Yes, sir. Thank you for the question. I 
would be happy to address this.
    Today our cruisers are commanded by a captain, with a more 
senior staff on the ship, and more individuals dedicated to the 
planning and execution of the air defense mission for the 
carrier strike group. In addition, the physical plant on our 
cruisers allows for dual transmitters, one forward and one aft, 
adding redundancy to those ships, and a greater number of cells 
available for surface-to-air missiles for the execution of the 
air defense mission.
    In addition, they have increased command-and-control 
capability over the guided missile destroyers. The guided 
missile destroyers are commanded by a commander with a less 
experienced, though perfectly capable staff underneath that 
commanding officer to ensure that they can execute the missions 
that have been assigned to that ship. And, typically for 
carrier strike groups that we are deploying, the air defense 
commander role will be assigned to the cruiser commanding 
officer associated with the cruiser that is going to be 
deploying for that ship. And so that is really how we drive the 
requirement for the cruisers and the air defense commander on 
the ship.
    The guided missile destroyers will typically operate in 
support. All of these ships are multi-mission ships--capable of 
executing air defense, capable of executing anti-submarine 
warfare, and anti-surface warfare as well. And, typically, we 
will deploy more destroyers, anywhere from three to five, 
typically, with a carrier strike at this time.
    Given the threat that we have currently experiencing today 
and the way we are deploying our ships, typically we will keep 
the cruiser with the aircraft carrier, and we have the luxury 
of being able to send those destroyers off on other missions. 
But we always keep the air defense commander's ship with the 
aircraft carrier operating in that air defense commander role.
    Mr.  McIntyre. All right. The second part of the question 
was, what is the impact to the carrier strike group if there 
were no cruisers available to fill the air defender commander 
role?
    Admiral  Rowden. Yes, sir. The air defense commander, Alpha 
Whiskey, assigned to air defense commander, the secondary role 
or the secondary commander, the redundancy within the strike 
group, is assigned to typically the most senior commander on a 
guided missile destroyer.
    Mr.  McIntyre. So that is where it would go if you didn't 
have a cruiser? You would go to that most senior commander on a 
destroyer?
    Admiral  Rowden. Yes, sir.
    Mr.  McIntyre. And what is your comfort level with that? 
Because you mentioned a minute ago you had less experienced 
staff on those destroyers.
    Admiral  Rowden. Yes, sir, typically the department heads, 
the supporting staff on a cruiser will be second to department 
heads, whereas they will be first to department heads on a 
guided missile destroyer. And as a consequence we leverage the 
experience that those department heads have learned, typically 
in their DDG [guided missile destroyer] command, as they 
execute their responsibilities in the air defense commander.
    Obviously, if the role falls of the air defense commander 
to a guided missile destroyer, we would have to increase the 
amount of training that we have and perhaps start to increase 
the level of expertise on those guided missile destroyers in 
order to be able to get the capability into those ships in 
order to be able to ensure that we are executing the air 
defense commander job properly.
    Mr.  McIntyre. All right. Thank you. I think that is an 
important distinction to keep in mind, and I am glad that you 
have stated that. I want to make sure we have that on the 
record in terms of what would need to be done.
    Could the reduced modernization of the Flight I and II 
destroyers be a precursor to early decommissioning of some of 
these vessels?
    Admiral  Rowden. No, sir. I don't believe that is the case. 
The Flight I and II guided missile destroyers are, given the 
fact that they are ballistic missile defense capable ships at 
this time, are some of the most stressed ships that we have in 
the inventory. They are playing a vital role across the force 
in the execution of the ballistic missile defense capability. 
And I believe you are referring to our phased modernization--
or, I am sorry, the accelerated modernization of our Flight IIA 
DDGs.
    Mr.  McIntyre. Yes, sir.
    Admiral  Rowden. And understanding that the plan that we 
are executing is designed to increase our ballistic missile 
defense capacity and increase our ballistic missile defense 
capability as we proceed through the remainder of the decade by 
ensuring that we maintain the relevance of the guided missile 
destroyers, by increasing, by upgrading their ballistic missile 
defense capability, commensurate with the capability that we 
will be installing in the Flight IIA DDGs. So I think that 
those ships will remain as vital as they are now, given the 
modified destroyer modernization plan that we have.
    Mr.  McIntyre. Would you agree with that assessment, Mr. 
Stackley?
    Secretary  Stackley. Absolutely, sir. We are investing on 
average over $100 million per ship in the Flight I's and II's 
to modernize them. That is not a precursor to decommissioning 
them.
    Chairman Forbes made reference to the number of baselines 
that we are managing, too many. And this reflects a 30-year 
build program across Aegis that that is just the evolution of 
the technology. But to the extent practical we need to raise 
the earlier baselines for both the cruisers and destroyers to 
get them to a position where they are not just more capable, 
but we can continue to upgrade them through the balance of 
their service life. And that is what we were able to do with 
the Flight I's and Flight II's. But it comes at a price, and 
that price is not a precursor to decommissioning them.
    Mr.  McIntyre. Okay. Thank you. Thank you, gentlemen.
    Thank you, Mr. Chairman.
    Mr.  Forbes. Mr. Conaway is recognized for 5 minutes.
    Mr.  Conaway. Thank you, Mr. Chairman.
    Mr. Stackley, in the written document, your testimony, you 
talk about the Phased Modernization Plan for the CGs [guided 
missile cruisers] precludes the Navy from having to increase 
overall end strength by about 3,400 people, which would 
otherwise be required to fill the critical shortfalls in our 
training pipelines and fleet manning of the cruisers.
    Can you walk us through what that actually means in the 
real world? And what are the risks? And how long is it, if you 
had to actually have those 3,400 people, how long could it take 
you to get them into place?
    Secretary  Stackley. Yes, sir. So today a cruiser has about 
330 to 340 officers and enlisted as part of the ship's 
complement. In this Phased Modernization Plan, recognizing that 
the first 11 are going to start decommissioning about 2019, the 
intent is that we sustain a steady state, steady flow of 11 
ships worth of manpower dedicated to cruisers out to the 
retirement of the last cruiser.
    What that means is, for the second 11 that go into phased 
modernization, you pull the 330, 340 per ship off and you are 
reducing the manpower requirement by about 3,400. Then, when 
CG-52 (USS Bunker Hill) retires and CG-63 (USS Cowpens) 
replaces it, you actually keep a steady cruiser manpower in 
there.
    The savings per year associated with those manpower 
reductions, or it is a cost avoidance, is what helps to fund or 
fuel the cruiser modernization. I don't know, does that 
address----
    Mr.  Conaway. It does. But the risks associated with that 
though----
    Secretary  Stackley. Okay. Yes, sir.
    Mr.  Conaway [continuing]. Are assuming that if for some 
reason you decided you can't----
    Secretary Stackley. Yes, sir.
    Mr. Conaway [continuing]. You can't decommission one of 
those cruisers, then you actually have spare 340-man crews just 
handy to come into the ether and just put them in place? How 
much risks are we taking by reduction in manpower.
    Secretary  Stackley. Yes, sir. So if we are on the 
execution of the modernization program and we have reduced the 
manning on those ships and we determine at some point in time 
that we need to accelerate those ships out of modernization and 
get them back to the force, well, then if you are, say, halfway 
through and maybe we have 5 cruisers that we are going to 
attempt to accelerate out, then we have to produce 1,500 to 
1,700 trained sailors to man those ships. Some of those will 
come out of shore billets from other portions of the Navy and 
some are going to have to be trained to take over their 
respective responsibilities.
    Mr.  Conaway. Assuming you don't come from a standing start 
with 330 to 340, what would be the normal training time to get 
up, from scratch kind of thing, where you start taking from 
other surface ship folks and put it together, how long would it 
take to put a crew together?
    Secretary  Stackley. We don't have an exact answer, but our 
estimate is about 2 years.
    And, Tom, you want to go ahead?
    Admiral  Rowden. Yes, sir. One of the important parts of 
this plan is when we reduced the manning on the ships, we 
didn't take all 340 billets and eliminate them from the force. 
And so, in order to be able to execute a reconstitution should 
it be required, we actually retained the 35 most senior billets 
on the ship and distributed them throughout the Navy. So in the 
event that we have to return the ship to operational status----
    Mr.  Conaway. I got that, but those folks with those skill 
sets, 4 years into this deal, they are not automatically going 
to step back into the role they would have had on that ship the 
day they came off of it. How do you keep refreshing that second 
term or second tour guy that needs to go in there when they 
have moved off to other career paths?
    Admiral  Rowden. Yes, sir. The career paths are still 
executed for the enlisted men and the officers and they 
maintain their rotation from sea to shore. And so, obviously, 
there would be a time that we would have to re-form the crew, 
get the crew trained, and get the crew out to sea. However, the 
plan, as we have laid it out, since we have retained the 
billets, the men and women that man those billets are 
distributed to other areas, whether it is regional maintenance 
centers or within the Afloat Training Group or other areas on 
the waterfront, we would then pull those people into the ship. 
The remainder of the crew, we would be able to form them in a 
relatively short period of time through new accessions in order 
to be able to form the crew and then get that ship out.
    Mr.  Conaway. So if some terrible thing happened and we had 
to put those boats back in the water it is a 2-year window. The 
risks are--the lack of flexibility of whatever is a 2-year 
window to get that team back in place? Is that what I heard you 
say?
    Admiral  Rowden. Yes, I would agree with the Mr. Secretary, 
18 months to 2 years.
    Mr.  Conaway. Okay. Thank you.
    I yield back.
    Mr.  Forbes. Mr. Courtney is recognized for 5 minutes.
    Mr.  Courtney. Thank you, Mr. Chairman.
    So, Mr. Stackley, we have certainly heard a lot of the 
challenges that exist with implementing the plan that the 
administration suggested. But let's talk about for a second if 
we go with the House defense authorization bill, which again, 
your testimony--I just want to make sure I got this clear--is 
that the difference in terms of cost, if we don't do the phased 
modernization and just sort of keep the entire 22 cruisers 
operational, is about $10 billion altogether. Is that sort of 
your analysis?
    Secretary  Stackley. No, sir. The difference in cost is 
about $4.7 billion. Specifically, absent the ability to de-man 
the ships for this extended period and take them out of the 
operational cycle and use those savings or cost avoidance to go 
towards funding the program, it's about a $13.5 billion program 
to modernize the cruisers. Through this phased approach it is 
about an $8.8 billion program, the delta being about 4.7.
    Mr.  Courtney. All right. And that $4.7 billion, if it is 
an added cost that you, the Navy, has to absorb, it would seem 
to me put even more pressure in terms of trying to achieve the 
shipbuilding plan with historic levels of spending as we have 
been sort of using as a baseline.
    Secretary  Stackley. Yes, sir. The CNO in his testimony was 
very clear. The reason we are doing this is because of the 
budget; the reason we are doing this is because of the budget. 
It is a constraint. It is a constraint for us. Given that, this 
approach seems to be the right balance in terms of holding onto 
that force structure, getting those ships modernized, getting 
additional service life on those ships, sustaining 11 air 
defense commander capable ships beyond the current plan, out 
into the 2035 to 2041 timeframe. So this is trying to strike 
the best balance with what is a difficult budget environment.
    Mr.  Courtney. And when we talk about the budget, again 
using, as the chairman said, sort of historic levels of 
shipbuilding as the budget. Again, the Budget Control Act, 
which creates a whole separate level of pressure, I mean, the 
good news about that is it just expires by law in 2021. So 
historic levels of spending and shipbuilding over the last 20 
years or 30 years, as you alluded to, I mean, the fact is, is 
that there are a whole range of programs that are going to be 
challenged throughout the whole 30-year shipbuilding plan. 
Isn't that correct?
    Secretary  Stackley. Absolutely. I will keep stating it, 
the 2020 through 2030 timeframe, when the Ohio replacement 
comes along and we are still building a carrier every 5 years, 
we have got to recapitalize the LSD 41 class [USS Whidbey 
Island], we are building big deck amphibs [amphibious assault 
ships], 4-year centers, we are trying to sustain two Virginia 
classes per year, the destroyers, that budget requirement 
during that period of time, and that major recapitalization, 
the last time we saw those types of budgets was during the 
1980s. And so, to be able to say, to be able to certify that we 
will are going to be able to hit those numbers, no.
    What that report does, that report defines the problem, 
makes it black and white for everybody to see. We today can't 
make the decisions that are going to change that, but today we 
have to start taking the actions, making the effort to address 
it so that it is not beyond everybody's reach when we get out 
there.
    Mr.  Courtney. Well, certainly it is an additional reason, 
Mr. Chairman, why our effort to have the Deterrence Fund set up 
in the defense authorization bill, I mean, is even more 
underlined, and I think highlighted by the testimony that we 
are hearing here today.
    I guess the other question is, you talked about the fact 
that if this Phased Modernization Plan was adopted that the 
availability of these cruisers would actually get pushed out 
into the 2030s.
    Secretary  Stackley. Yes, sir.
    Mr.  Courtney. Is that correct?
    Secretary  Stackley. Yes, sir.
    Mr.  Courtney. As opposed to if we go with the status quo 
or the House bill version. Talk to me about that for a second.
    Secretary  Stackley. Yes, sir.
    Mr.  Courtney. I mean, when do we lose those cruisers if we 
just continue along with the House bill and figure out a way to 
come up with the $5 billion.
    Secretary  Stackley. Yes, sir. So today the service life, 
the expected service life of the cruisers is 35 years. They 
start aging out in 2019, and they will age out at the same rate 
at which we built them. So by the late 2020s they are all 
retired. What this plan does is, one, through the modernization 
we are going do the necessary hull, mechanical, and electrical 
repairs and upgrades to buy back some additional service life, 
buy back an extra 5 years service, and, frankly, during that 
period, this phased modernization, this extended period when 
they are out of the operational cycle, we are not burning up 
the service life. So what that does, that gives us the ability 
to extend the cruiser class out into the late, as I was saying, 
2035 through 2041 timeframe during which they would then 
retire.
    Mr.  Courtney. Thank you, Mr. Stackley.
    I yield back.
    Mr.  Forbes. Thank you, Mr. Courtney.
    Mr. Wittman is recognized for 5 minutes.
    Mr.  Wittman. Thank you, Mr. Chairman.
    Mr. Stackley, Admiral Rowden, Admiral Creevy, thank you so 
much for joining us today.
    Secretary Stackley, I want to talk about the 11 cruisers 
that would be assigned minimal caretaker crews versus full 
crews during the reduced operating status. So now you have 11 
of those ships. The question would be is, if you have a 
contingency and they need to be brought back up to full 
operational status, the question is, is how many of those 11 
ships and how quickly could they be brought back up? And if the 
answer is less than 11 could be immediately brought back up, 
should all 11 be counted in the fiscal year 2015 30-year 
shipbuilding plan as fully capable ships available for duty?
    Secretary  Stackley. Yes, sir. So clearly the number 
depends on where you are in the modernization plan. First, the 
way we have this structured is we want to go after the HM&E 
package first, we want to hit it hard.
    A couple of things. We have to inspect the heck out of 
these ships. They have been driven, they are at a stage in 
their life that we are going to uncover a lot of things when we 
do open and inspect. So step one, get in, open and inspect, 
assess the material condition, get material in order, get them 
into the depot to do the hull, mechanical, and electrical 
upgrades that give you the service life that you need to get it 
out to 40 years.
    At that point in time, when those ships are in a depot, it 
is just like any other ship that is in a depot, it is not 
available for tasking. It is going to depend on how fast can 
you complete that work and get it going again.
    So in the early phase, when they are going through depot 
maintenance, maybe half will be materially available to get 
them going again, maybe half. Now, the issue then is not their 
material condition or their readiness, the issue is going to be 
the crew, and it is what we just discussed. It is going to be 
pulling the senior enlisted and officers from other shore 
billets and then bring in the balanced crews and getting them 
trained and integrated onto the ship.
    So I put out a 2-year estimate there and that is based on 
new construction experience. If you look at what we do today in 
terms of crew phasing and training, integrating the crew with 
the ship, getting them certified and ready for deployment, 
about 2 years.
    After the HM&E upgrades, now have you ships that are in a 
very good material condition. They don't have the most current 
combat system baseline, which we want to ultimately get to, but 
they are in very good material condition. And then it becomes a 
matter of strictly the crew. And the first one will be ready 
for operations faster than the last one because we will be 
surging crews to the ships. But I think the 18-months to 2-year 
rule still applies, and then the next phase going into the 
combat systems modernization.
    Well, now you are already in the active phase of bringing 
the crews to the ships. And so, again, depending on where you 
are, some of the ships are already going to be out on 
deployment. By 2019 the first of the cruisers are back out on 
deployment and we have crews that are surging and moving to the 
ships just like in new construction so they would be able to 
complete their certifications and ready for tasking faster.
    Mr.  Wittman. Well, it still appears then through phased 
modernization that there wouldn't be all 11 ships that would be 
battle force ships available at that particular time. You would 
be having them available in this wave status.
    But let me ask you, let me go to your question concerning 
crews, and that is a concern. Today we are in a very, very high 
operational tempo. We are pushing things in significant areas, 
and I know the combatant commander requests have been 
significant. How do you expect to maintain the same forward 
presence with fewer assets? And would you expect to come back 
in future years and announce additional FDNF [Forward Deployed 
Naval Forces] assets as a way to achieve that?
    Secretary  Stackley. Yes, sir. I am going start this and 
ask Admiral Rowden to finish it. But first you hit on the 
forward deployed ships. That is a very important key to the 
Navy's ability to sustain presence without driving our ships at 
the same OPTEMPO [operations tempo], because we get to cut down 
on a lot of the transit time to theater.
    So the FDNF ships are an important point to increase our 
operational availability of ships, and that, frankly, helps us 
to compensate for cruisers being pulled out. But the high 
OPTEMPO issue today, I am certain and I think you are, too, 
that 10 years from now it will be worse and it will be more 
demanding.
    And an important part of this is, where is the risk? Is the 
risk higher in the 2020s or today? And when we look at not just 
the budgets associated with recapitalizing and modernization, 
but when we look at the risk associated with the threat, part 
of this, what this plan does is, it accepts more risk today in 
terms of cruisers that are operationally available today, but 
then it buys down the risk in the out-years when, frankly, the 
threat is increasing both in terms of the fiscal threat and in 
terms of the adversary.
    Admiral  Rowden. Yes, sir. And to piggyback on Secretary 
Stackley's comments, clearly to get increased forward presence 
with X number of ships you either forward deploy those ships or 
you increase the length of deployments. And certainly the 
funding available to execute those would be required in order 
to ensure that we maintain the readiness levels on those ships. 
And certainly ships are built to put X amount of water 
underneath the keel, and the more you are operating those 
ships, the more you have to fund those appropriately in order 
to ensure that you can maintain the material condition as you 
bring those ships back to depot.
    Mr.  Wittman. Thank you, Mr. Chairman. I yield back.
    Mr.  Forbes. Than you, Mr. Wittman.
    Mr. Langevin is recognized for 5 minutes.
    Mr.  Langevin. Thank you, Mr. Chairman.
    I want to thank our witnesses for your testimony today.
    Secretary Stackley, if I could just start with you, going 
back to the shipbuilding program and our ability to meet our 
shipbuilding needs. With the actions that the HASC [House Armed 
Services Committee] has taken with respect to Ohio replacement 
and the subsequent action that the SASC [Senate Armed Services 
Committee] has taken, in terms of moving to take the Ohio 
replacement program out of the shipbuilding budget and treat it 
as more of a national platform with a separate funding 
mechanism, what will that do to the 30-year shipbuilding plan? 
And will it still leave a gap? Or to what degree does it 
significantly close that gap to help us meet our shipbuilding 
needs?
    Secretary  Stackley. Yes, sir. Let me first say that the 
actions taken by both the HASC and the SASC in that regard, I 
am calling it a great first step. By establishing the Strategic 
Sea-Based Deterrent Fund we are creating a vehicle to help us 
finance our shipbuilding program during that extremely 
stressing period. It does not change the picture in terms of 
dollars required for constructing new ships during that period.
    So the fund is a great first step, one that identifies we 
have got a problem here. It starts to set up a framework. The 
dollar demand is unchanged. And that is where I think we need 
to work together to identify how can we in fact not just 
identify the fund, but fill the fund without it coming out of 
shipbuilding.
    Mr.  Langevin. Okay. Thank you, Mr. Secretary.
    Admiral Rowden, if I could turn to you. As you may know, I 
have been a very vocal proponent of ONR's [Office of Naval 
Research] Solid-State Laser Technical Maturity Program that 
plans to test a high-powered, mature integrated weapon system 
at sea in late 2016.
    My question is, what impact will the testing of this laser 
weapon system on the USS Ponce this year and this subsequent 
solid-state laser test in 2016 have on surface combatant 
modernization? And is the integration of high-energy weapon 
capabilities planned already with Ponce and SSL-TM [Solid-State 
Laser Technology Maturation Program] in forming final decisions 
or are the Ponce and the SSL-TM being used as development 
gates?
    Admiral  Rowden. Sir, thanks for the question. I think, to 
answer your second question first, I think we really have to 
wait to see what the results of the testing that we have, that 
we are going to execute on Ponce is, in order to understand how 
to further integrate that into future weapon systems. But I do 
think--and I am not an expert by any means on this particular 
weapon system, but I can say in general in the development of 
weapon systems certainly the at-sea testing that we execute for 
any weapon system that we are going to field is going to be 
absolutely essential to understand exactly what it is we have 
to do.
    And so I think that certainly it is a good first step to 
get the weapon systems out on ships like Ponce in order to be 
able to understand not only what needs to be done to marinise 
the equipment and to properly support it in execution of 
operations at sea, but then also to understand how to start to 
develop the tactics, techniques, and procedures, and the 
concept of operations in order to go employ those weapons 
effectively.
    Mr.  Langevin. Thank you, Admiral, for that answer.
    And I again want to applaud the Navy for the aggressive 
work that they are doing to try to get this directed energy 
weapon systems out of the lab and actually into the field.
    So with that, let me just turn to Admiral Creevy. With the 
Destroyer Modernization Plan combining two modernization 
periods into one, what is the opportunity cost in terms of 
hull, mechanical, and electrical or system upgrades?
    And other than conducting the combat system upgrades near 
the end of the availability, how will the Navy ensure that 
these destroyers are ready to rapidly integrate the latest 
technologies, particularly those in support of electronic 
warfare and high-energy weapons?
    Admiral  Creevy. Thank you for the question, sir. I would 
like to answer the second part of your question first.
    I think Admiral Rowden has got it right. We are going to 
learn a lot when we go do at-sea test. And that is the benefit 
of getting it out there to test, so we can learn about the 
integration challenges, the power challenges, and those kinds 
of things that we need to do.
    In the meantime, we have put into our modernization program 
as much as possible in the way of upgrades to support future 
requirements. And combining those availabilities into one saves 
us a significant amount of time in modernizing those ships and 
keeps them from being offline for much less time.
    Mr.  Langevin. Thank you, gentlemen. I have some other 
questions that I will submit for the record.
    But thank you, Mr. Chairman. I yield back.
    Mr.  Forbes. Mr. Langevin, thank you for your work on this 
and on the funding source, too. You have done a great job on 
that. Mr. Courtney has as well.
    Mr. Courtney recognized for 5 minutes.
    Mr.  Courtney. Thank you, Mr. Chairman.
    And again I want to thank the witnesses for your great 
testimony here today.
    Secretary Stackley, I think one of the reasons why I think 
there was resistance to the proposal from the administration 
was to some degree, given the proposal a year before, which was 
to just decommission seven ships, frankly, I just think a lot 
of people had some confidence issues about whether or not this 
phased modernization was just a decommissioning by another 
name. And, again, I think your testimony today has been very, I 
think, convincing in many respects.
    But I guess I thought before you leave that if you could 
just kind us walk us through (a) what changed, and (b) what 
reassurances can you really state for the record that the Navy 
really will sort of follow through on this different type of 
approach?
    Secretary  Stackley. Yes, sir. A couple things have changed 
that are critical here.
    First, the Congress established the Ships Maintenance 
Overhaul and Sustainment Fund, SMOSF. You all put $2.2 billion 
into a fund to let us move forward past the budget hurdles that 
we had to modernize the cruisers. That was the first key.
    Second is the manpower issue. The SMOSF fund will be 
consumed by manpower, operation, and support faster than we can 
modernize these cruisers, particularly in this budget 
environment.
    So we coupled the two. We looked at the funding that we 
have in hand, and we want that money to go towards the 
modernization to give us the capability and extend the service 
life that we need on the cruiser. We didn't want to run out of 
gas along the way. And so we looked at the other costs, the 
manpower and the operation and sustainment costs, and we looked 
at the phasing of the decommissioning of those first 11 
cruisers. And we arrived at this plan. We arrived at this plan 
that says we can minimize, we can almost self-finance this 
plan, at least on the front end, by pulling the manpower off 
and recognizing that we are going to bring our cruiser force 
structure down to 11, 1 for 1 with our carriers, but then be 
able to extend that longer.
    So the key was getting the SMOSF funding in place and then 
looking at offloading the costs associated with the manpower 
and operating and support during the period of modernization, 
and then coupling the decommissioning of the first 11 with the 
completion of the modernization for the back 11. And it just 
balanced out in terms of the budget that we've got, the force 
structure that we've got, and then the requirement that we've 
got to modernize the cruisers.
    Mr.  Forbes. Secretary, let me take you back, because you 
left out one very important item when Mr. Courtney said, what 
changed? What changed was Congress said you couldn't do it. In 
other words, when you came over here, you fought us tooth and 
nail with that. And when we tried to put the provision in 
there, the Navy still came over here and fought us tooth and 
nail to try to decommission those seven cruisers.
    And what really changed was when Congress looked at it and 
said, that's a crazy proposal to do. We have got useful life 
left on these cruisers. And then Congress said, Navy, you can't 
do that. And we put the fund in.
    But you could have come over initially instead of saying, 
we are just going to cut these cruisers out, and said, hey we 
need the cruisers, and we just need the funds to do it.
    And I am not faulting you. I am just saying we need to 
compare apples to apples. And when you guys come over here and 
you basically salute and say, this is all we need, this is 
good, and then on the other hand you come back over and say, 
this is because of the budget, we need to know which is which. 
Are you doing this because of the budget? Or are you doing it 
because of the needs? And basically the reason those cruisers 
are still floating today is because the United States Congress 
said, we are not going to let you do it.
    Now, I come back and I want to ask you this question, 
because I had a hard time getting it, I want to make sure 
everybody else could get their questions in. Based on this 
report and what I understand you saying--and any of you guys 
can answer, so I am not putting one person on the spot--on this 
shipbuilding plan, which I am holding up here, Mr. Secretary, 
you tell me, this is the number of ships we need in 2024, 306 
ships. Is that a fair----
    Secretary  Stackley. Yes, sir.
    Mr.  Forbes [continuing]. Fair assessment?
    Secretary  Stackley. Yes, sir.
    Mr.  Forbes. And I take it when you say we need 306 ships, 
you are not talking about 50 ships that are laid up in dry dock 
and we can't use, that you need 306 ships that could be 
deployed. Is that a fair statement?
    Secretary  Stackley. Sir, we need 306 ships to produce the 
number of ships that we have to deploy.
    Mr.  Forbes. I understand. I understand. But you are not 
talking about ships that take 2 years to get out of dry dock. 
Isn't that true?
    Secretary  Stackley. Well, there are exceptions. Because 
you know that a cruiser----
    Mr.  Forbes. So then what you are telling me is that in 
2024 you don't need 306 ships that are operable, you just need 
306 ships somewhere, even if it takes you 2 years to get them 
out and get them going again? Is that what the requirements 
are? And I am not trying to trick you.
    Secretary  Stackley. Yes, sir. No.
    Mr.  Forbes. I am just trying to find out what the answer 
is.
    Secretary  Stackley. Two parts.
    Mr.  Forbes. Okay.
    Secretary  Stackley. Presence and response to major combat 
operations.
    Mr.  Forbes. I understand both of those. But at some point 
in time there is a number. Let me just tell you why.
    Secretary  Stackley. Yes, sir.
    Mr.  Forbes. Admiral Locklear comes to us, and we have a 
lot of respect for him, just like we do all three of you, and 
he says, if we keep moving the direction we are and we get down 
to 255 or 260 ships, we cease to be a superpower. We become a 
regional power. Is he correct or not correct?
    Secretary  Stackley. I agree with him.
    Mr.  Forbes. If he is correct, then, he is talking about at 
some point in time 260 ships. He is not talking about 100 ships 
that are capable of being forwardly present, he is talking 
about 260 ships in the United States Navy.
    And my question to you is, when we look at this and I fast 
forward out to 2024, and you guys are meeting over at the 
Pentagon somewhere, and then you are coming over here and 
telling Mr. Courtney, Mr. Langevin, me, the Speaker of the 
House, and the other members here, we need 324 ships, are you 
talking about just 324 hulls somewhere or are you talking about 
324 ships that are capable of being used in the United States 
Navy?
    Secretary  Stackley. It is 324 ships. Well, that report 
refers to 306 ships.
    Mr.  Forbes. I am sorry, 306 ships, I apologize, 306 ships.
    Secretary  Stackley. Yes, sir, 306 ships that are capable 
for being used in the United States Navy, some number of which 
are in depots, some number of which just got back from 
deployment and are in a surge status, some number of which are 
training up, getting ready to go on the next deployment. So it 
is an entire cycle. That is the force structure that we need to 
produce today about a hundred ships on deployment or a 
different mix in response to a major combat operation.
    Mr.  Forbes. If that is true and we can look at 2024 and 
say we need 306 ships, how many do we need today?
    Secretary  Stackley. Okay. I will reflect back on the CNO's 
and the Commandant's testimony at their posture hearing. We 
need more ships. We need more ships. It is that 
straightforward.
    Mr.  Forbes. But I can't do that, Mr. Secretary. I mean, I 
am fighting for you. And you come over here and you tell me, 
no, we can get by with this. I need to walk into the other 
Members of Congress and tell them. If you are telling me, we 
are good to go, we only need 250 ships, or we need 260 ships, 
they are going to go with that.
    I need you to tell me, does the United States Navy know 
today how many ships they need today? You know what you need 
when you look out in the distance at 2024. Can you tell me how 
many you need today? This is 2014, this is 10 years earlier, 
where you don't have to have a crystal ball. You know. How many 
ships do you need today?
    Secretary  Stackley. Sir, we need to produce about a 
hundred ships deployed today. And what is happening today at 
today's current number of 289 ships is that the operational 
tempo of those ships is higher than where it needs to be. So, 
in fact, we do have ships that are on 8-month deployments. That 
is starting to stress the ships materially and stressing the 
crew.
    Mr.  Forbes. I understand. And, Mr. Secretary, I have 
enormous respect for you.
    Admirals, can you all give me a number? I mean, does the 
United States Navy, if it walks over here and I have a 
checkbook that I can open up, can you guys tell me? You tell me 
you can predict out a decade from now how many ships we need. 
Can we predict out 12 hours from now and say this is how many 
ships I need tomorrow morning?
    Admiral  Rowden. Mr. Chairman, I think there are a 
significant number of variables in that equation.
    Mr.  Forbes. But there can be variables in 2024. At some 
point in time I have got to be able to get my hands around some 
number somewhere. I can't just be saying, oh, it depends. I 
mean, how do you come up with a definite number a decade from 
now and you can't tell me a number today? That is what I am 
just scratching my head and trying to figure out.
    Admiral  Rowden. Sir, I think what it comes down to is it 
comes down to understanding in determining what the number of 
ships that we have to have is, the ability to assume away or 
assume specific variables on this particular date is a very 
difficult thing to do. I think Mr. Secretary is exactly right 
in saying it is about a hundred ships deployed.
    Mr.  Forbes. But, Admiral, do you understand my 
frustration? When you guys can come over here and give me a 
shipbuilding plan that the Secretary of Defense is certifying, 
saying this is how many ships I need a decade from now. And I 
am just asking you a simple question. I am not asking you to 
predict where China is going to be or Russia is going to be or 
any of those things a decade from now. I am just saying, today, 
when I walk over to the appropriators or anybody else and I 
say, this is how many ships we need, how many ships do we need?
    And I am really frightened if the United States Navy can't 
tell me a number. I mean, be one or two off, but just give me a 
number somewhere.
    Secretary  Stackley. Sir, we don't have the luxury of 
telling you how many we need absent of the budget that we are 
dealing with and absent of the number that we have got today. 
So what we can describe is what the OPTEMPO is of the force 
that we have got today, we can talk about the combatant 
commanders' demands and what it has taken to meet those when 
there are shortfalls.
    Mr.  Forbes. Mr. Stackley, when the testimony we have from 
admirals that we respect enormously says, if we meet the 
combatant commanders' requirements we would need 400 to 500 
ships in our Navy. So we take that off the table. And what we 
are getting at, we are not appropriators, we are authorizers. I 
need you to tell me how many we need so I can go fight and say 
this is how many ships we need.
    If the United States Navy doesn't even know how many ships 
you need today, how in the world can we fight for you to get 
those numbers? And how can I with a straight face go to the 
American people and say, wait a minute, we know a decade from 
now how many we are going to need, we just don't know how many 
we need today? I mean, I just don't understand that. You all 
have got to help me with that.
    Secretary  Stackley. I will give you an example.
    Mr.  Forbes. Okay.
    Secretary  Stackley. I am going to go back to the posture 
hearing because I think both the CNO and the Commandant were 
very clear. We would like to have 50 amphibious ships today to 
answer all the demands. Those are workhorse ships. We don't 
have 50, we have 29. And our plan is to build up to 33 because 
that is what we can afford.
    I don't know if that is a requirement, what we need today. 
But when we look at all the tasking that we would choose to 
fill if we did not have a constraint in terms of what the force 
structure is today, what our budgets are today, we would be a 
much larger Navy.
    Mr.  Forbes. I understand that, Mr. Secretary. But can you 
just appreciate a little bit of my frustration when I am just 
looking at you guys, who I trust, who I respect, I am saying 
you guys think, you plan, you do strategies over there. At some 
point in time do you not ever say, this is how many ships we 
need in the United States Navy, and we are short? Or we have 
more than we need?
    Secretary  Stackley. I would tell you that we need about 
300 ships.
    Mr.  Forbes. Okay. Now, if we need 300 ships, what I want 
to--and I will take that. Okay.
    Secretary  Stackley. That is the best number that we have 
got.
    Mr.  Forbes. That is okay. Be off some.
    But then when I look at this shipbuilding plan, this 
shipbuilding plan says today's battle force count is 289. Fair?
    Secretary  Stackley. Yes, sir.
    Mr.  Forbes. And it says that. But then on the back it has 
that based on the accounting rules we have used for a decade or 
more----
    Secretary  Stackley. 283.
    Mr.  Forbes. All right. What is this 274 figure in here? 
Look at the back. I don't know if you have the 30-year 
shipbuilding plan. If not, I will have it brought to you.
    Secretary  Stackley. Today we have six ships in the ship 
count that a year ago were not in the ship count.
    Mr.  Forbes. Okay. Six ships more.
    Secretary  Stackley. Yes, sir.
    Mr.  Forbes. And if you take the cruisers out--I am 
looking, it says fiscal year 2015, it says total naval force 
inventory, and there is a figure of 274. Where does that come 
from? I am just trying to understand.
    Secretary  Stackley. Yes, sir.
    Mr.  Forbes. You see where I am at least referencing?
    Secretary  Stackley. Yes, sir.
    Mr.  Forbes. And explain that. This is your plan. I am just 
reading it.
    Secretary  Stackley. Okay. The numbers I am quoting you are 
2014, today's numbers.
    Mr.  Forbes. Okay.
    Secretary  Stackley. What happens over the next year is we 
decommission a large number of frigates, which is identified 
earlier on in the report.
    Mr.  Forbes. Okay. So it gets worse then. So next year, 
instead of 289 or something, based on the previous count, I 
would be at 274 ships. Fair?
    Secretary  Stackley. Yes, sir. Yes, sir.
    Mr.  Forbes. Okay. So I am going down. And you say, I need 
300 ships. Admiral Locklear is warning us that if we get to 260 
we become a regional power, and you agreed with that. And you 
say, next year we will be down to 274.
    I am getting scared that I am heading in the wrong 
direction. I am heading closer to 260 than I am to 300.
    And then here is my question. Our plan for modernization of 
these cruisers would require that two of them actually be fully 
modernized next year, in fiscal year 2015. That is our plan. 
That is the House plan.
    Secretary  Stackley. Yes, sir.
    Mr.  Forbes. So we know we would have two more cruisers at 
the end of next year. Your plan would not require any be 
modernized, fully modernized next year.
    So my question to you is, do we have any contingency plan--
Admirals, maybe you can address this--anywhere on the globe 
where we say that when we count the number of ships we need 
that we have 2 years to get those ships out and get them over 
for that operational plan that we would have?
    Secretary  Stackley. The answer is no for major combat 
operations. But when you look at the requirement for our force, 
the numbers driver is presence.
    Mr.  Forbes. Got you. But here is my worry, and I am just 
going to end it on this.
    Secretary  Stackley. Yes, sir.
    Mr.  Forbes. I worry because of today--first of all, let me 
compliment you on at least heeding what Congress has said about 
our aircraft carrier and putting the money to do that. And 
thank you guys for doing that. I think that is important for us 
to do.
    Secondly, though, what I walk away with today, enormous 
respect for you guys, you know that, I am not arguing with you, 
I am just trying to get my hands around the fight. Because I 
believe that over the next decade or two, so goes the United 
States Navy, so goes the national defense of this country.
    And when I am looking at you, who I respect enormously, all 
three of you, and you say we need 300 ships, and then I wave 
this plan around that says, look, this is what we are going to 
have, we are going to have 306 ships in 2024, but all of us, 
everyone in this room knows there is no money to build all 
these ships over that time period, that we will have about a $4 
billion shortfall each year, then I put that aside. And then I 
ask you this. I said, we need 300 ships, based on what you 
said, and I do not doubt your word, but I am heading next year 
down to 274, based on the way we have always counted them. And 
Admiral Locklear is warning me, if I get to 260, I become a 
regional power.
    Do you see why that makes me nervous? And I am not 
interested in coming out and settling and telling the American 
people what our budget says we have to get to. I am more 
interested in knowing what we have to have so I can go fight 
for that on the House floor.
    And then the last thing I will just tell you is, every one 
of these operational plans we have, when we look at the ships 
we need and what we have, none of them give us 2 years to go 
pull these ships out of dry dock and get them manned up to do 
it. And so that is the frustration we have.
    And I come back to what Mr. Courtney said. When you all 
came in here last year and said you just wanted to dismantle 
these seven ships, if we had not stepped up and done what we 
did, those ships would be gone.
    And I fear the same thing is going to happen with these 
cruisers. If we don't step up to the plate, at least I know 
with our plan we will have two of them next year that will be 
modernized. And then I hope Congress will step up to the plate 
and get the money to do them because we need those ships in the 
United States Navy.
    And I have said this before, and I will end on this. I 
don't think this is a Phased Modernization Plan. I think it is 
a phased euthanasia plan. Because I think when those ships go 
into dry dock, we have no guarantee that they are ever going to 
be coming back.
    But with that, I am going to let each of the three of you 
have the final word on whatever you want to say. And thank you 
guys for your service to the country. And thanks for being over 
here.
    And, Mr. Secretary, we will start with you.
    Secretary  Stackley. Yes, sir. Let me start by simply 
stating that neither the Phased Modernization Plan nor the 
prior 2 years when the Navy walked over proposals to 
decommission the cruisers are done as a preference. Those are 
done facing the realities of where we are with the budget. And 
it is not something that we can overlook as we put together our 
program. And so we have to take the resources that we have got 
and strike the right balances between our requirements, the 
funding that we have, and then lay it before Congress.
    Now, in every scenario we have described that we need more 
ships. So there is no debate here on that. And the report that 
we deliver to Congress that lays out not just the force 
structure that we need and the plan to build it, but lays out 
the budget requirements for that, that is sending a very clear 
signal to Congress and to the public that in order to meet our 
306-ship requirements the funding that is needed greatly 
exceeds what we have had for the past 20 years. And we can't 
march up to it slowly and wait until the FYDP arrives, when the 
Ohio replacement program is ongoing at the same time the 
carrier recapitalization, right on down the line, and then deal 
with the problem. We are identifying this problem years in 
advance so that we collectively have the opportunity to work on 
it.
    The 306-ship plan is under great budget stress. One of your 
concerns and one of your comments, and we take it on board, is 
that don't allow the budget to dictate what your requirements 
are. Well, in fact, the budget that we have submitted to the 
Hill, the 2015 through 2019 budget, goes right by the Budget 
Control Act [BCA]. It doesn't disregard it entirely, but it 
doesn't allow ourselves to be constrained.
    So what we have tried to do is put Budget Control Act 
aside, but then responsibly try to arrive at what is the 
minimum funding requirement beyond the BCA that meets a measure 
of capability that we have got to have to support the defense 
strategy.
    So we are trying to again strike that right balance without 
being constrained just by the BCA, but then not just submitting 
a budget that is beyond all reach. Maybe we don't have it 
exactly right, but we are trying to hit that balance.
    Our concern is not just the challenge associated in those 
out-years, our concern is sequestration, because the plan that 
we have just laid out that we are critiquing here and the 
concerns that are being raised, those are only exacerbated if 
in 2016 we show up with the same budget that we told you we 
were going to come forward with this past year and it gets 
sequestered. It just compounds the problem.
    So we are trying to articulate what our requirements are. 
It is about 306 ships. We have been consistent for the last 
several years in terms of the mix of ships and what the budget 
requirement is in terms of new construction and, in this case, 
in terms of modernization. And we are trying do the best 
government that we can in terms of responsibly managing the 
resources that we have got to produce that amount of 
warfighting capability.
    We might not have it exactly right, but what I am confident 
of and I am sure of is if in the end we do keep those cruisers, 
those 11 cruisers in an operation and sustainment fashion and 
continue to deploy them to meet the demands of today, and we 
have to live inside of a sequestered budget or otherwise, we 
are going to have less resources available to recapitalize our 
fleet, because it will become a zero-sum game.
    So I entirely agree with you in terms of identify the 
requirement, identify the budget needed to requirement, give 
Congress the ability to go in and fight for it. And we are 
there with you in that fight. But we also have to be prepared 
to address the impacts of living under a BCA. And we can't wait 
until we are in the middle of that scenario to then start to 
address it.
    We have done the best we can to lay out a balance--it is 
above BCA--a balance in terms of requirements and resources to 
get us to that 306-ship Navy. It is not perfect; it is not 
where we want to be. But we are trying to strike that right 
balance, not just for the taxpayer, but for the warfighter.
    Mr.  Forbes. Mr. Secretary, you are a good man. You have 
got a tough job, a hard job. We want to work with you, and we 
want to help you on that. End of the day, we want to get you 
where you need to be, even if it is not where you want to be. 
So thanks for all do you.
    And, Admiral.
    Admiral  Rowden. Yes, Mr. Chairman. Again, I appreciate the 
opportunity to appear before you today.
    In the execution of my responsibilities as the Director of 
Surface Warfare Division, one of the things that is front and 
center in my brain is that carrier strike group commander that 
is going to be deploying in the late 2020s and into the 2030s 
timeframe.
    I had the honor and the privilege back in the 2009 to 2011 
timeframe to command two carrier strike groups out of San 
Diego, California. I came to rely heavily on all of my warfare 
area commanders and especially on my air defense commander that 
was assigned on the USS Chancellorsville and was assigned on 
the USS Mobile Bay.
    I think about the men and women that we are going to be 
deploying at that timeframe, and I think about the capabilities 
that we must deliver. As I sat down with the team in N96 
[Surface Warfare] to look at what had changed, as Secretary 
Stackley talked about, in generating savings and the cost to 
own and utilizing the money that was put into the SMOSF fund, I 
wanted to figure out how we could best get through the 2020s 
and into the 2030s and take care of those strike group 
commanders that are going to be deploying at that period of 
time.
    The purpose-built air defense commander ships that we have 
today, upgraded and modernized, will deliver the capability 
that those individuals need in order to be able to do the 
Nation's bidding at that time.
    This is not a perfect plan, as Secretary Stackley said, but 
it is a plan that I think we can live with, I think we can 
stick to it, and I think we can execute it. These are superb 
ships today, and they will be superb ships in the future. And I 
look forward to working the plan and to ensuring that we have 
the funds and the fortitude in order to continue to press 
forward with that.
    Mr.  Forbes. Admiral, thanks for being there. We appreciate 
all that you do and the men and women that serve under you.
    Admiral.
    Admiral  Creevy. Chairman Forbes, distinguished members of 
the subcommittee, thank you again for allowing me to appear 
today before you regarding our Navy surface ship program. SEA 
21 [Naval Sea Systems Command] is committed to the efficient 
planning and successful execution of our critical modernization 
programs. This will help ensure, as Admiral Rowden says, that 
our sailors have the required capabilities to meet the 
operational commitments.
    Force structure, ship count, and budget discussions aside, 
what I hope in the plan that we have presented in the PB 
[President's Budget] 2015 budget demonstrates our commitment to 
the CG Mod [Cruiser and Destroyer Modernization] program and 
communicates some level of comfort that we are committed to 
executing.
    I think what is important to note there is that our current 
plan brings all these ships into the HM&E avail in the first 3 
years of the program, demonstrating commitment, buying the 
service life of those ships up front so that we know they can 
go the distance and makes us able to pull them back into 
service more quickly and again demonstrates our commitment.
    My biggest challenge, as the guy who has to execute 
whatever program is eventually approved, is the uncertainty in 
the churn. And that is definitely my most difficult challenge. 
If I can lock down a plan in advance, I know I have the team, I 
have the processes, I have the discipline. I think the Navy has 
proven through the Aegis programs, cruisers and destroyers, and 
our associated modernization programs that they are very strong 
programs, very successful. And I know if I can lock down a 
plan, I can execute it.
    That is all I have, sir. Thank you very much.
    Mr.  Forbes. Admiral, thank you.
    And, gentlemen, thank you so much for all that you do for 
our country. Thanks for your patience and being here with us.
    And Joe, Jim.
    With that, we are adjourned.
    [Whereupon, at 5:28 p.m., the subcommittee was adjourned.]


      
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                            A P P E N D I X

                             July 10, 2014

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              PREPARED STATEMENTS SUBMITTED FOR THE RECORD

                             July 10, 2014

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    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 

      
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              QUESTIONS SUBMITTED BY MEMBERS POST HEARING

                             July 10, 2014

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                  QUESTIONS SUBMITTED BY MR. LANGEVIN

    Mr. Langevin. I appreciate your statement regarding the benefits of 
the phased modernization plan. As we modernize the capacity and 
capability of these cruisers, could you comment on their post-
modernization ability to field high-energy systems?
    Secretary Stackley. There is currently no plan to field high-energy 
systems on the CG 47 Class ships. However, as research and development 
efforts continue in the field of high-energy systems the CG 47 Class 
ships, post modernization, could receive consideration for the fielding 
of high-energy systems.
    Mr. Langevin. With the destroyer modernization plan combining two 
modernization periods into one, what is the opportunity cost in terms 
of HM&E (Hull, Mechanical, and Electrical) or system upgrades? Other 
than conducting the combat system upgrades near the end of the 
availability, how will the Navy ensure that these destroyers are ready 
to rapidly integrate the latest technologies, particularly those in 
support of electronic warfare and high-energy weapons?
    Admiral Rowden. The combined HM&E and Combat Systems (CS) 
availabilities provide a fully modernized DDG in 64 weeks vice 171 
weeks with split availabilities. The ships will continue to receive the 
full HM&E and CS modernization upgrades in an integrated work package 
enabling fully modernized DDGs to be available to the Fleet sooner, 
including the combat systems testing completing at the end of the 
availability. There are multiple efforts in progress to develop more 
energy efficient systems and to accommodate the integration of future 
electronic warfare and high-energy weapons. The integration of these 
technologies would be supported within the plan to conduct combined 
destroyer modernization availabilities.
    Mr. Langevin. What effect will the decision to descope the Flight 
I/II Arleigh Burke destroyer upgrades have on maintenance and training, 
given that there will be a permanent diversity of software and hardware 
capabilities across the destroyer fleet? What sorts of additional costs 
will be incurred by the decision to support these multiple lines of 
software and hardware throughout the life of the ships?
    Admiral Creevy. The descoping of the Flight I/II Arleigh Burke 
destroyers modernization package will have a minimal impact on training 
costs due to student throughput and instructor requirements remaining 
virtually the same for all baselines and the costs to maintain current 
Flight I/II training equipment being less than the cost to procure new 
training equipment for new baselines. The one exception to this is the 
Navy/Missile Defense Agency (MDA) PB15 plan to install Ballistic 
Missile Defense (BMD) 4.X on additional Flight I/II DDG's which 
increases annual training costs by approximately $800K per year, $4.0M 
over the Future Years Defense Plan (FYDP).
    Aegis Baseline 5.3.9 remains the most stable and best supported 
Aegis baseline from both the standpoint of parts support and training. 
The training infrastructure is in place and fully supported and funded. 
While this may be viewed as a ``permanent diversity of software and 
hardware capabilities across the destroyer fleet,'' the end result will 
be a more rapid reduction of the several baselines found in the Flt IIA 
ships, as they are replaced with Advanced Capability Build (ACB) 12/BMD 
5.0 at near their midlife thus reducing overall lifecycle costs.

                                 [all]