Navy Looks for $40 Billion in Cuts to Pay for Bigger Fleet

The U.S. Navy, the future USS Gerald R. Ford (CVN 78) is seen underway on its own power for the first time in Newport News, Va., on April 8, 2017. Mass Communication Specialist 2nd Class Ridge Leoni/U.S. Navy via Getty Images

The head of the Navy is scouring the ledgers for $40 billion in savings to boost the fleet size, giving the service just six weeks to identify the cuts.

Those cuts, representing 7 percent of the Navy’s discretionary topline, are to be made over a five-year period, Acting Navy Secretary Thomas Modly wrote in a Feb. 18 memorandum (pdf).

Modly’s “Stem-To-Stern” review comes ahead of a much-anticipated blueprint for modernizing the Navy’s fleet as it swings around to face Russia and, more significantly, China.

Modly said that for the next several years the Navy expects a flatline budget.

The $40 billion in savings are needed, he said, to make the Navy bigger, to improve its readiness and “lethality,” and to recapitalize the submarine ballistic nuclear force.

That requirement for replacing—but not modernizing—the aging nuclear force “will consume a significant portion of our shipbuilding budget in coming years and squeeze out funds we need to build a larger fleet,” wrote Modly.

But although the ships will be bigger in number, according to previous remarks made by Modly, they will be smaller in size.

The U.S. military is revamping across the board to face renewed “great power competition” with Russia and China, as demanded by the 2018 National Defense Strategy. The more fleet-footed Army and Marine Corps have already submitted their modernization plans, but the Navy–with its slower-turning industrial base—has yet to fully realign longer-term goals.

Flight deck of the U.S. aircraft carrier USS Abraham Lincoln in the Arabian Sea on May 19, 2019. Garrett LaBarge/U.S. Navy/Handout via Reuters

Those goals will be spelled out in the Navy Force Structure Assessment, currently working its way through the corridors of the Pentagon.

Modly hinted at the contents of that (delayed) 2019 assessment in his memo, saying it would call for “increased ship numbers, technological capabilities, and varying new types of supporting vessels,” to be constructed in a 10-year timeframe.

“We must act now to make tough, fiscally-informed choices in order to fund our key strategic priorities using the budget we have, not the budget we wish we had,” he wrote.

Beating the Army at Night Court

“The bottom line is that we need to find at least $40 billion in real line-of-accounting savings to fund the development, construction, and sustainment of this new fleet over the next five years, and to set the department up for continuing this trajectory in the five years that follow,” he wrote.

Modly noted that the Army found $13 billion in savings in its infamous “Night Court” sessions.

Summoning up the spirit of inter-force rivalry, Modly said the Navy’s goal is to “beat Army.”

But whereas the Army took two years to find their cut, the Navy has just six weeks.

Mark Cancian, a senior adviser at the Center for Strategic and International Studies, told USNI News that was a tall order.

“If the Navy was unable to find that kind of savings during the year-long budget build, I don’t see how they will do it in six weeks,” Cancian said. “Night Court took many months and it mostly shifted money around in modernization programs, from lower priority to higher priority.”

Modly wrote that the review would “identify low priority, redundant, or legacy capabilities, programs, processes, or headquarters functions that can be realigned, eliminated, or reduced.”

The military’s pivot to tackle renewed “great power competition” requires rethinking both strategy and equipment simultaneously.

Some analysts suggested that big-ticket, high-tech items no longer pack the strategic punch they once had because adversaries have long-since factored them into their strategies.

The aircraft carrier USS Harry S. Truman (CVN 75) transits the Arabian Sea on Jan. 31, 2020. 2nd Class Scott Swofford/DoD

He told the audience at the Center for Strategic and Budgetary Assessments on Jan. 29 that the Navy planners are shifting their fleet requirements toward a long-mooted strategy: distributed operations.

China has geared much of its firepower, tactics, and technology toward nullifying the once indomitable U.S. air carriers—essentially floating airfields—and larger ships.

Distributed operations would shift Naval firepower and sensors across numerous ships, some unmanned, to avoid the larger ships becoming an Achilles heel.

The Navy is currently locked into a 355-ship goal by law.

For those who assess the Navy’s prowess by counting ships, the distributed operations strategy complicates things further by throwing a number of unmanned vessels into the mix. Congress has indicated that it will not include these in its current way of counting, Modly has said in the past.