[Congressional Record Volume 140, Number 4 (Friday, January 28, 1994)]
[House]
[Page H]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: January 28, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                       BUDGET SHORTFALL FOR NAVY

 Mr. D'AMATO. Mr. President, at a recent press conference, 
Chief of Naval Operations, Adm. Frank Kelso, indicated that the Navy 
faced a $3.6 billion budget shortfall between fiscal year 1995-99. The 
admiral, according to a story that appeared in Navy News & Undersea 
Technology, anticipated that the shortfall would likely force the 
``accelerated retirement of older ships and aircraft, the consolidation 
of training, elimination of the Navy's `Aggressor squadron,' reduced 
operations for aircraft carrier antisubmarine helicopters, 
regionalizing maintenance functions, moving ships maintenance from 
tenders to shoreside facilities, and dropping the number of tenders to 
4 from 13.''
  There is an easier way. It cannot have been lost on Admiral Kelso 
that the $3.6 billion shortfall between fiscal year 1995-99 equals 
almost exactly the $3.4 billion price tag of the CVN-76. Eliminate the 
CVN-76, and your budget problem disappears.
  Obviously, this proposal will spark much wailing and gnashing of 
teeth within the navy and here in Congress, but it is time to ask 
ourselves whether we need another 90,000-ton, 5,000-man behemoth when 
the Navy budget is in chaos.
  We are already gapping presence in forward areas. One less carrier 
will not profoundly change the balance of power in any given region. 
Frankly, if we reduced our presence in the Indian Ocean, the real 
driver of deployments, we could probably increase presence elsewhere. 
Face it, Saudi Arabia is one huge aircraft carrier with an 
infrastructure second to none. Carriers are intended to provide 
airpower outside the range of available land bases, but the Persian 
Gulf appears to be the one region of the world where carriers are least 
necessary.
  And what of the industrial base? The Navy needs to separate jobs 
programs from preserving critical industries, skills, and tooling. 
Nuclear propulsion, catapults and arresting gear, and whatever else is 
unique to carriers may require special attention, but not to the point 
of justifying yet another Nimitz-class carrier. If the work force at 
Newport News needs to be preserved, run the America through a Service 
Life Extension Program. In the meantime, get Newport News and Navy 
designers cracking on the next generation of aircraft carriers capable 
of handling a mix of conventional and short take-off and landing 
aircraft.
  To survive the current fiscal austerity, bold moves are required. The 
``salami slice'' approach to savings outlined by Admiral Kelso is the 
wrong way to go. Even if every initiative enumerated had merit, and I 
would argue that not all do, and achieved the saving projected, it is 
unlikely that the Navy would be able to close the gap between funding 
and requirements.
  We can either denude the seas of ships and ships of planes and 
helicopters, monkey with training and maintenance, and reduce 
procurement rates to the point where unit costs explode or we can 
eliminate the CVN-76. The choice is simple.
  I ask that the article, ``Budget Squeeze Brings Howls,'' be included 
in the Record.
  The article follows:

          [From Navy News & Undersea Technology, Jan. 2, 1994]

                      Budget Squeeze Brings Howls

       It is probably no coincidence that three hours before 
     Defense Secretary nominee Bobby Inman bowed out--citing among 
     other reasons a budgetary disconnect between future budgets 
     and force levels--the Chief of Naval Operations was making 
     the same point.
       Adm. Frank Kelso told a press briefing the proposed Navy 
     budgets for fiscal years 1995 to 1999 will leave the service 
     about $3.5 billion short in two critical procurement 
     acounts--shipbuilding and naval aviation.
       Kelso indicated the shipbuilding budget over the five years 
     will average $6.3 billion per year while the requirements to 
     maintain the force levels outlined in DOD's Bottom-Up Review 
     demands $8.4 billion.
       Kelso broke out the shortfall:

------------------------------------------------------------------------
                                            Fiscal year                 
                                              1995-99         Future    
                                              average      requirements 
------------------------------------------------------------------------
DDG-51..................................            $2.7            $2.5
CVN/refueling...........................             1.2             2.0
SSN.....................................             1.2             2.2
Amphibs.................................             1.0              .7
Other...................................              .2             1.0
                                         -------------------------------
      Totals............................             6.3             8.4
------------------------------------------------------------------------

       For aviation, the mismatch is $1.5 billion per year, and is 
     dominated by the need for more F-18 aircraft, as follows:

------------------------------------------------------------------------
                                            Fiscal year                 
                                              1995-99         Future    
                                              average      requirements 
------------------------------------------------------------------------
F-18C/D/E/F.............................            $2.2            $3.1
CV & SPPT...............................              .9              .5
USN & USMC helos........................              .1              .3
AV-8B...................................              .3  ..............
V-22....................................              .6             1.0
JAST....................................  ..............              .6
APN 5/6/7...............................             2.9             3.0
                                         -------------------------------
      Totals............................             7.0             8.5
------------------------------------------------------------------------

       The APN (aircraft procurement, Navy) 5/6/7 account includes 
     modifications, spares and support. For the past three years, 
     it has run about $2.5 billion annually.
       The Navy will attempt to make up for the perceived 
     shortfall by continuing its ``recapitalization'' strategy of 
     cutting infrastructure and reducing force levels. Kelso also 
     said the Navy will be an aggressive player in the next round 
     of base closings set for next year.
       Kelso admitted the recapitalization is not without risk. 
     Base closure could be throttled back due to political 
     considerations, or its costs might be underestimated. New 
     programs could ``suffer from unanticipated inflation,'' while 
     the impact of a declining industrial base could force costs 
     to rise.
       Other threats to the Navy plan include the potential for a 
     higher operational tempo, causing problems in retaining 
     qualified sailors, or what Kelso called ``DBOF turmoil.'' The 
     Defense Business Operating Fund--established in 1991 to buy 
     services and commodities not included as budget line items--
     has caused multi-billion dollar headaches for the Navy (Navy 
     News, 4/26/1993).
       The final and worst-case threat to matching Navy finances 
     and force structure is increased military tension in the 
     world.
       Kelso cited several on-going ways the Navy is looking at to 
     reduce expenditures, including the accelerated retirement of 
     older ships and aircraft, the consolidation of training, 
     elimination of the Navy's ``Aggressor squadron,'' reduced 
     operations for aircraft carrier anti-submarine helicopters, 
     regionalizing maintenance functions, moving ship maintenance 
     from tenders to shoreside facilities, and dropping the number 
     of tenders to four from 13.
       It is uncommon for the Navy's ranking officer to make 
     critical on-the-record comments concerning his upcoming 
     budget submission. That Kelso was willing to ``go public'' 
     might indicate he believes lame-duck Defense Secretary Les 
     Aspin--who resigned for the same budget/forces mismatch that 
     Inman cited--has abandoned the fight for enough money to 
     achieve the force levels outlined in the Bottom-Up 
     Review.

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