Newport News Shipbuilding: Carrier funding prompts head scratching
By Hugh Lessig | Daily Press (Newport News, Va.) | Published: March 8, 2014
This week's rollout of the Defense Department budget prompted as many questions as answers about the U.S. aircraft carrier fleet and the status of future big-ticket jobs at Newport News Shipbuilding.
The confusion stemmed from lawmakers, analysts and journalists trying to square what Pentagon officials said in briefings with actual budget documents.
Bottom line: Defense officials want to maintain the carrier fleet at 11. But whether it stays there or drops to 10 -- a move that could ripple through the economy of Hampton Roads -- depends on what signal the Pentagon gets from Congress about future spending levels.
What will a congressional "signal" look like? For the moment, no one seems to know.
The budget rollout began last week when Defense Secretary Chuck Hagel briefed reporters and followed up with visits to Fort Eustis in Newport News and Langley Air Force Base in Hampton.
He described the fiscal year 2015 budget and an accompanying document that projects spending five years into the future. Congress votes on the 2015 budget, not the five-year plan.
Hagel said the 2015 budget maintains the 11-carrier fleet, but notes that the USS George Washington is due at the Newport News shipyard in 2016 for a refueling and overhaul that would give it another 25 years of service.
The refueling can't happen if budget cuts return in 2016 under the process known as sequestration, Hagel said. The Navy would have to retire the George Washington, not refuel it. That would mean less business for the Newport News shipyard, not to mention implications for national security and additional stress on the fleet and military families with one less carrier.
The discussion started getting complicated when it moved toward that five-year spending plan.
That five-year plan showed an extra $116 billion above sequestration levels for 2016-19. Hagel said the Navy could maintain an 11-carrier fleet "with the spending levels in the president's budget plan." So many people simply connected those two dots: If the $116 billion gets included, the U.S. keeps 11 carriers and maintains higher troop levels.
However, when the actual budget was unveiled this week, analyst Todd Harrison of the Center for Strategic and Budgetary Assessments noticed what he called a "disconnect." The $116 billion didn't fund the refueling or several other major issues, such as keeping troop strength at certain levels.
The department would need even more money to accomplish those tasks -- or it would have to cut funding elsewhere.
"They didn't put it toward the refueling, but they said they did," Harrison said.
What the $116 billion pays for is not yet clear. Details of the five-year plan haven't been released. But it sparked a round of questions when Hagel and his top deputies testified before Congress. Sen. Tim Kaine was among those left scratching his head.
Kaine told Hagel he was a "a bit confused" about how the president's budget, if enacted, would fund the refueling of the George Washington. Hagel's response veered in a slightly different direction.
The Defense Department had to assume sequestration would return in 2016 because that's current law. If Congress indicates it will free up more money, the Pentagon can plan for 11 carriers and higher troop levels.
"I understand the confusion on how we did it and why we did it," Hagel told Kaine.
Pentagon comptroller Bob Hale said this was not a disconnect. It was prudent planning. It takes time to plan for changes in troop strength and aircraft carrier levels. So for the moment, the department must assume that sequestration will happen. If Congress indicates otherwise, the Pentagon can replan accordingly.
"There's an important 'if' there," Hale said. "We have to have some indication from Congress that you're going to appropriate."
Kaine said that was concerning.
"Your indication of 'give us an indication' -- I'm wondering precisely what kind of indication would be sufficient, given that we've just done a budget within the last two months and we are not likely to return to one soon," Kaine said.
He didn't get an immediate answer, but the question came up again Friday at a briefing with Rear Adm. John Kirby, a Pentagon spokesman.
"The form that the signal takes is a lot less important than the timing of it," Kirby said. "The sooner we can get a firm indication that sequestration no longer remains the law of the land, the better. We'd like to get that signal as soon as possible."
Pressed further, Kirby said, "I don't know whether there's a big difference between a signal and indication. We're less concerned if it's an email, a phone call or a formal letter as to getting it as soon as possible."
Kaine brought up another point: It's true that sequestration in 2016 is the law unless Congress changes it, but the 11-carrier fleet is also required by statute. It's not just a policy. The Navy can't simply drop to 10 carriers without legislative approval.
Hagel agreed, and said "if we don't have the resources, there will be further cuts somewhere."
At week's end, the lack of clarity was apparent in several corners, including Politico's Morning Defense blog, an authoritative source. It read in part:
"Has this week left you utterly confused? If so, you're not alone. Last week, we were told things about the Pentagon budget, only to find out this week, some of them aren't exactly true ... or only exist as aspirational goals versus what's actually on paper."