[Congressional Record (Bound Edition), Volume 163 (2017), Part 7]
[Senate]
[Pages 9078-9079]
[From the U.S. Government Publishing Office, www.gpo.gov]




                 BUILDING AND SUSTAINING A LARGER NAVY

  Mr. WICKER. Mr. President, as chairman of the Seapower Subcommittee, 
I rise this afternoon to direct the attention of this body to an 
important national security issue: building and sustaining a larger 
Navy.
  President Trump wants a 350-ship Navy, which aligns with the Navy's 
requirement for 355 ships. Right now we have only 275 ships in the 
battle fleet. Increasing the size of the Navy by 80 ships, even as 
older ships retire each year, is a test of national will. It will not 
happen overnight. However, Congress has the responsibility to lay a 
firm foundation this year to prepare for a deliberate and responsible 
buildup in the future. A healthy shipbuilding industrial base is 
necessary to succeed.
  Today, I will offer some general comments about the state of 
shipbuilding. Then I will focus on the submarine industrial base, in 
particular, because of its unique challenges. Finally, I will make 
suggestions on how Congress can support the industrial base in general 
and the submarine yards specifically.
  Last month, my subcommittee convened two hearings on this matter. The 
first was with naval officials. This took place in a classified setting 
because of their expertise and because of sensitive information. The 
other hearing was with the country's two top shipbuilders--Huntington 
Ingalls and General Dynamics--as well as the Shipbuilders Council of 
America, which is the trade association for suppliers. We discussed the 
industrial base as it exists today and the challenges associated with 
building up the fleet.
  Based on my subcommittee's work, here are four general impressions of 
the state of shipbuilding.
  No. 1, the yards are turning out most classes of ships on time and on 
budget. Ingalls Shipbuilding just delivered the newest big-deck 
amphibious ship--the LHA--13 weeks early. Electric Boat and Newport 
News continue to deliver Virginia-class attack submarines, or SSNs. 
Construction time for attack submarines has declined by 1\1/2\ years--
from 84 months to 66 months. There are a few notable exceptions, but, 
by and large, industry is delivering for the warfighter and for the 
taxpayer.
  No. 2, most yards have excess capacity to ramp up shipbuilding. This 
is very good news for national security. The Navy's accelerated fleet 
plan concluded that the industrial base can build an additional 29 
ships--above projections--over the next 7 years. The glaring exceptions 
are the submarine yards, which will struggle to meet planned demand as 
the new Columbia-class ballistic missile submarine production starts. 
In terms of capacity, our submarine yards have a ways to go.
  No. 3, two decades of low-rate shipbuilding have significantly 
reduced the supplier base. The Congressional Budget Office has stated 
that ships cost more today than they did during the Reagan buildup, 
even when adjusting for inflation. Twenty years ago, about 17,000 
suppliers served the submarine business. Now only about 3,000 first-
tier suppliers are left. Let me repeat this. We used to have 17,000 
suppliers. Now we have 3,000. These 3,000 suppliers include large 
corporations, such as Northrop Grumman and L3, which have tens of 
thousands of employees. These 3,000 suppliers also include mom-and-pop 
small businesses with just a few employees. Whether they deal with 
large corporations or small businesses, the shipyards increasingly buy 
from sole-source suppliers. In fact, Newport News spends about 65 
percent of its budget in buying pieces and parts from single and sole-
source suppliers. General Dynamics faces a very similar situation. I 
have little doubt that this dramatic erosion in the supplier base 
explains why ships cost more today.
  No. 4, in terms of my general observations, Congress has a critical 
role to play in supporting a buildup through advance procurement 
funding, through multiyear procurement authority, and through block 
buys. These tools can stimulate the supplier base, stabilize the 
workforce, and achieve significant savings through producing economies 
of scale. In addition, incremental funding authority is a tool that 
Congress can authorize to smooth out peaks and valleys in 
appropriations. This makes it easier to buy more ships in 1 year 
without busting the budget.
  To sum it up, most yards are performing well and have the capacity to 
ramp up. The submarine yards are doing exceptional work but will 
struggle because of capacity. All shipbuilders face a diminished 
supplier base, which undermines competition, and Congress can help 
improve the supplier situation and stabilize the skilled workforce 
through using acquisition authorities.
  That is a snapshot of the overall shipbuilding industrial base. Now 
let's turn to submarines specifically. Let's begin with the Navy's 
requirements.
  In 2016, the Navy set a new requirement. The total requirement for 
ships is 355. That includes an increase of 47 ships from the previous 
level. For the Navy's submarine fleet, the new plan calls for 66 attack 
submarines and 12 ballistic missile submarines. We currently have 52 
attack submarines--a number that will eventually decline to 41 over the 
next decade unless we do something about it. I propose we do something 
about it. We currently have 14 ballistic missile submarines as part of 
our nuclear deterrent. Beginning in 2021, 12 of these will be replaced 
by the new Columbia-class ballistic missile submarines.
  To reiterate, we need 355 ships. That includes 66 attack submarines 
and 12 ballistic missile submarines. How does the President's budget 
request match up? The fiscal year 2018 request includes nine ships and 
prioritizes readiness more so than modernization. Congress needs to 
work with the President to reach his goal and to reach the requirement 
of 350 to 355 ships. I look forward to working with the administration 
on these budget numbers in order to make them work and to help the 
President achieve his goal.
  Now let's talk about submarines. The budget request fully funds R&D 
for Columbia-class SSBNs to keep the program on track. The budget also 
funds the procurement of two Virginia-class submarines. We have 
followed this policy for years.
  The Navy will struggle to ramp up submarine production because of the 
industrial base for submarines and how it will be stretched to 
capacity. The CBO tells us that reaching 355 ships in 15 years is not 
possible because we lack submarine production capacity. Electric Boat 
and Newport News are investing billions to recapitalize facilities, 
workforce, and suppliers, but that recapitalization effort is aimed at 
meeting current projected demand.
  Arresting the decline in attack submarines, while maintaining the 
schedule for the Columbia-class SSBN, will take a significant 
recapitalization effort. We have done it before, and we can do it 
again. From the mid-1970s to the mid-1990s, industry steadily delivered 
three attack submarines per year and added a fourth SSBN on time and on 
budget. There is no reason we cannot do this again. We must take 
decisive action now to make this a reality. There are four ways in 
which Congress can help.
  No. 1, repeal the defense budget caps. Sufficient and stable funding 
is the starting point for expanding submarine and shipbuilding 
capacity. The Budget Control Act-mandated budget caps have damaged 
military readiness and choked off modernization. While intended as a 
way to incentivize us to reform mandatory programs, the BCA defense 
caps have proved to be a self-inflicted wound. We cannot solve our 
spending and debt problem on the backs of our warfighters and 
industrial base, much less on the backs of the security of Americans. 
Congress needs to end the defense budget caps immediately.
  No. 2, we need to accelerate and fully fund advance procurement. This 
will help stimulate and encourage new entrants into the supplier base. 
We need more competition. We need more suppliers. Driving down the cost 
per ship

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will free up resources to buy more ships.
  No. 3, we need to incentivize capital investment. Congress should 
work with industry to identify responsible and cost-effective ways to 
incentivize investments in facilities and capital equipment.
  No. 4, we need to target some appropriations to fund process 
improvements. I mentioned earlier that Newport News and Electric Boat 
have shaved a year and a half off Virginia production through more 
efficient manufacturing. We need more of this sort of thing.
  Shipbuilding is a team effort, and these are four ways in which 
Congress can help to constructively participate in this national 
project.
  The requirement for a bigger Navy is clear. The Navy needs our help 
to fulfill its mission. Numbers matter when it comes to projecting 
naval power in this day and age. The President and the Navy agree that 
we must build a bigger Navy.
  To summarize, the shipbuilding industrial base is up to the task. 
Submarine production will be the most challenging part of this. There 
is limited capacity for submarine yards, and we need to do something 
about that, but Congress can take a number of steps now. We must start 
to build a foundation this year. I am committed--and I hope the entire 
Congress is committed--to setting this firm foundation, and I certainly 
intend to use my chairmanship on Seapower for this goal.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Oregon.

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