This story was updated with additional budget information March 28, 2022, at 6:55 p.m. ET.

WASHINGTON — The U.S. Navy is requesting more money in its fiscal 2023 budget proposal compared to the previous fiscal year, but it’s still on a trajectory toward a smaller fleet.

Increasingly higher bills for nuclear-powered submarines and aircraft carriers are crowding the shipbuilding budget, and rising costs due to inflation and other factors are further complicating efforts to balance the budget, the Navy’s top budget officer told reporters March 28.

As a result, the Navy is asking for nine ships in FY23, even as it plans to retire 24. It is asking for 96 aircraft, but no F/A-18 Super Hornets and fewer carrier-variant F-35C Joint Strike Fighters than last year. It’s also proposing a decrease of about 10,000 sailors to crew the fleet in the next five years.

Meredith Berger, who is currently performing the duties of Navy undersecretary, told reporters the plan is strategy-driven and follows the chief of naval operation’s priorities of funding the Columbia-class ballistic missile submarine in full and then prioritizing readiness for today, lethality for tomorrow and capacity for down the road.

The budget proposal, she said, “enables the Department of Defense’s investment in the three pillars of the National Defense Strategy: integrated deterrence, campaigning forward and building upon our enduring advantages to fulfill the strategic priorities that are identified [in] the National Defense Strategy.”

Rear Adm. John Gumbleton, the deputy assistant secretary of the Navy for budget, told reporters that the funding request was “balanced” among those priorities.

The Navy’s request represents a 5% growth in spending compared to the FY22 budget Congress passed, and the Marine Corps’ request would be a 1.8% increase in spending compared to the enacted FY22 budget.

Gumbleton said this is “a lot more money than we thought we were going to get at the beginning of this process.”

Still, lawmakers will likely reject the Navy’s plans for its ship fleet. Members of Congress in recent years have criticized the service for not including enough ships in its budget request to grow the fleet to a congressionally mandated 355-ship force.

Ships

The Navy asked to buy nine ships in FY23, compared to the eight it requested in FY22 — which Congress bumped up to 13 in the hopes of moving the Navy to a larger fleet size.

Included in the request are two Virginia-class attack submarines, two Arleigh Burke-class destroyers, one Constellation-class frigate, one America-class amphibious assault ship, one San Antonio-class amphibious transport dock, one John Lewis-class fleet oiler, and one Navajo-class towing, salvage and rescue ship.

The $27.8 billion shipbuilding budget also includes incremental funding for the Ford-class aircraft carriers and the Columbia SSBN, as well as $1.3 billion in “cost-to-complete” funds for ships purchased in the FY22 budget, whose cost went up due to inflation and the COVID-19 pandemic, Gumbleton said.

The rear admiral said every ship class under construction in FY22 saw an increase in cost that the Navy had to assist in paying for. The fixed-price, incentives-based contracts all include clauses for inflation, which the shipbuilders invoked with the Navy.

Additionally, he said, “as we emerge from the pandemic and we’re observing schedule delays, that schedule delay has a cost, and that’s what we’re seeing in our cost-to-complete.”

The Navy currently has 298 ships. That would dip to 280 by FY27 under the plan pitched by the Navy.

The service proposes decommissioning 24 ships in FY23: nine Freedom-variant LCSs, five Ticonderoga-class cruisers, four Whidbey Island-class amphibious dock landing ships, two attack submarines, two oilers and two Montford Point-class expeditionary transfer docks.

Of those 24 vessels, 16 have not yet reached the end of their service lives and would require the Navy secretary to sign a waiver to Congress, including all nine LCSs, one of the five cruisers and the two expeditionary transfer docks.

“We remain committed as an administration to that 355-[ship goal for the Navy fleet], but first and foremost it’s making sure that we have a fleet that has the right mix of capability, lethality, and something that we are able to sustain and support,” Berger told reporters.

Gumbleton said decommissioning the 24 ships would free up $3.6 billion across the next five years to reinvest in modernization and lethality.

With the prioritization of funds being Columbia, readiness, lethality and then capacity, the top line couldn’t necessarily cover all the lethality needs without freeing up additional funds. “A piece of that was our choice in going after decommissioning vessels that were very expensive to maintain, our cruisers at the end of their life. LCS is regrettably a younger ship, but the warfighting value was the trade,” he said.

He also noted that 21% of the shipbuilding budget supports the Columbia program — which doesn’t affect the ship count for FY23 since the Navy is not buying a new ship this year but rather is incrementally paying for the lead ship bought in FY21 and buying parts for the upcoming FY24 ship.

Overall, 56% of the shipbuilding budget goes to nuclear-powered subs and aircraft carriers, leaving less room for surface ships.

The Columbia program will grow to consume 30% of the shipbuilding budget once it moves into one-per-year procurement later this decade. As a result of this pressure, surface ship programs may be scaled down.

Gumbleton said in a second briefing in the afternoon that the Navy would ask for a multiyear procurement contract for destroyers that covers nine ships from FY23 to FY27, with an option for a 10th ship, barely achieving the two-per-year rate that would sustain two separate contractors: General Dynamics Bath Iron Works and Ingalls Shipbuilding.

This is short of the last five-year destroyer contract that allowed as many as 15 ships, or three a year. He also said the Navy delayed its plans to bring a second shipyard into the frigate program, and that the “sawtooth” procurement rate alternating one or two ships per year represents the maximum workload that prime contractor Fincantieri can handle on its own at the Marinette Marine Shipyard.

Aircraft

The Navy asked to cease its Super Hornet jet production in FY23, something it asked to do in FY22 and Congress rejected.

The request would buy nine F-35C Joint Strike Fighters and five E-2D Advanced Hawkeyes for the Navy, as well as four F-35Cs, 15 F-35Bs, five KC-130Js and 10 CH-53K King Stallions for the Marines.

Asked about the decrease in F-35Cs for the Navy compared to this year, when Congress allotted money for 15 — a particular issue as the Navy tries to stave off a fighter shortfall — Gumbleton said the request was more about the money than the need for the jets.

“The fact that we did come down in our JSF request was more about balance than anything else — it was about balancing a ship construction portfolio, aviation portfolio, weapons, R&D, etc. So I think we would have liked to have had more JSF, but that’s the balance that we can yield,” he said.

Of note, the five Advanced Hawkeyes and the 26 TH-73A helicopter trainers in the budget request would be the last in the program before the production lines end.

The three V-22 Ospreys the Navy is buying this fiscal year and the nine the Marines are buying would be the last for that production line as well, with the services listing zero in their request for FY23 and in the four following years.

New in the aviation plan, however, is the MQ-25A Stingray, an unmanned carrier-based tanker that would go into production at a rate of four a year starting in FY23.

Readiness and lethality

Following just behind the all-important Columbia program in the Navy’s funding prioritization is the readiness of today’s fleet.

Gumbleton said in the afternoon briefing that the budget request:

  • Invests $1.7 billion in the Shipyard Infrastructure Optimization Program, with a focus on upgrading dry docks at three of the four public shipyards.
  • Continues a pilot program meant to help ship maintenance availabilities at private repair yards remain on track even when they span two fiscal years.
  • Increases ship-operations funding by 6% to allow for more days at sea with more spare parts.
  • Spends 16% more on flying hours to allow pilots to train more and to cover the growing cost of spare parts.

He explained that readiness was highly prioritized, in part because of the message it sends to potential adversaries. Operating forward with ready forces “influences competitor perceptions of the benefits and costs and risks inherent in their actions, while amplifying our strengths.”

When it comes to investments in lethality and modernization, budget documents show a 9% in Navy research and development spending compared to FY22 and a 5.5% increase in Marine Corps research and development spending.

Among the initiatives are long-range fires and next-generation platforms.

The Navy includes $2.7 billion in its FY23 request for R&D and acquisition efforts for long-range fires and hypersonic technology. Included is $1.2 billion for R&D for the Conventional Prompt Strike Program, referring to the Navy’s name for its hypersonics development program with the Army, as well as $199 million for Standard Missile-6 Block 1B development and $85 million for Maritime Strike Tomahawk development.

In June, a memo signed by then-acting Navy Secretary Thomas Harker noted concern that the service’s next-generation fighter jet, destroyer and attack submarine programs were all converging on a similar timeline, setting the Navy up for an unaffordable budget scenario as the programs move through development and into acquisition.

The budget request includes $237 million for SSN(X) development, up from $1 million in FY21 and $98 million in FY22. It also contains $196 million for DDG(X) development, compared to $19 million in FY21 and $38 million in FY22. The Next Generation Air Dominance budget is classified.

Gumbleton told Defense News during the afternoon briefing that the investments show “the acknowledgement that we do need to invest in those future classes.” He said he couldn’t reveal NGAD funding levels but noted they “do go up over the [five-year budget period] quite dramatically.”

“We know we have to get after this, and this reflects our best balance versus risk on those platforms we need to move out on.”

Megan Eckstein is the naval warfare reporter at Defense News. She has covered military news since 2009, with a focus on U.S. Navy and Marine Corps operations, acquisition programs, and budgets. She has reported from four geographic fleets and is happiest when she’s filing stories from a ship. Megan is a University of Maryland alumna.

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