to do today is just the first day of a process of arriving at those recommendations i felt that it was important to start the legislative session with an examination of alternatives to the numbers necessary to meet our national security needs dollars of infrastructure we left behind in panama the billions of dollars left behind in the philippines when the puerto rican people asked us to quit using the allen of the practice range the navy made the decision to shut down roosevelt and as we speak we're in the process of leaving open out in every instance will basically one election cycle away from a key ally asking us to leave billions of dollars worth of things and if we were to put the national missile defense in eastern europe the same thing could happen there if we put it on a ship we are then off the coast of a potential we don't have to ask a host country for permission to use our national missile defense but most of all that we are able to move that position around as needed around the world and i think is the way to go what i don't see is the administration telling us where those ships are going to come and i would again i'm in support of the president's request to put these things on ships but i want the president to make the request let's don't pretend it's going to happen later going to happen overnight from the day we order that you have probably at least three years to deliver for the first so we need to get started now i don't think our navy is large enough to do the job they're asked to do but numbers alone are not the type of ship and what number is more important than just quantity don't think we're  need eleven aircraft carriers again i disagree those battle groups have done more to maintain the peace in the world for the past sixty years than any other force i'm convinced that we do not have enough gas cripple the navy budget in the later part of the decade in addition to the hard facts of types of ships and numbers are also matters that need to be to the congress was perfectly clear in the fiscal year two thousand and eight national defense authorization act directed the navy to address and i regret to say that was two years ago the navy has done absolutely nothing to pursue the nuclear cruiser today the last major concerns of all submarine replacement topics today we have three very distinguished experts in a the acquisition of policy dr eric lab senior naval officer congressional budget office his independent cost analysis ship construction has proven very helpful to this is the president and chief operating officer of the lexington institute dr thompson has appeared before this committee before his eyes always helpful for full disclosure united states navy was invited to send representatives to testify secretary mavis has agreed to do so with the stipulation that the witnesses would not discuss discuss the upcoming budget submission subsequently my understanding is the secretary of the navy permission to testify when i think we would have had a better hearing with them thank you mr chairman and welcome to our witnesses we appreciate your willingness to appear before us today i hope this will be a useful springboard for this subcommittee as we prepare to consider the president's fiscal year two thousand and eleven shipbuilding budget request and the results of the quadrennial defense review today's hearing gives us the opportunity to frame the various issues our subcommittees must consider depending on a number of alternative shipbuilding plans that could emerge shortly i hope our members will use this hearing as a foundation for the rigorous oversight and decisionmaking that will be required in the coming weeks i imagine that our witnesses have been somewhat challenged in preparing your testimony today we will all continue to rely on press accounts and rubber as we wait for the first monday in february in spite of the lack of new information your preliminary insights are valuable one of been troubled by certain reports such as those indicating the navy may attempt to a limited as many as two carrier strike group likewise indications of the navy may not wrap production of the virginia class submarine to a sustained rate of two per year starting in fiscal y eleven raise concerns about our ability to meet combatant commander requirements for submarine presence and may have second or third order effects on the total cost of ship building they've also been stories in the media about pressures on him a lift in fact the commandant recently alluded to the stress placed on the and then to be asleep in all scenarios evaluated during the q d r we need to ensure that the navy and the marine corps have both the quality and capability in our battle for ships to maintain our maritime strategy deter and win any future conflict in which united states may be involved on the other hand some of these concerns may be premature there have also been press accounts indicating that the next shipbuilding plan will establish a three hundred twenty four ship requirement that would maintain the current minimum requirement for eleven carriers forty eight attack submarines and thirty three amphibious ships nevertheless i was interested to note in your prepared testimony several items worth further consideration by this subcommittee for example mr o'rourke you indicated that should the navy be forced to pay for the ohio class replacement program within its current top line it could result in significant reductions in other shipbuilding programs this is no great surprise but you also note that such reductions could result in a substantial consolidation of the search surface ship construction industrial base furthermore to dr labs in your testimony your point out you point out that c ballistic  could require a substantial commitment of resources that could make it difficult for the navy to fund other programs therefore whether or not the q t r and the upcoming long term shipbuilding plan substantially alter the requirements for certain key platforms a navy and this committee will have a number of difficult choices to make in the near term i thank the chairman for holding this hearing today so early in the year to allow us to properly understand these issues thanks again to our program and the number of ships needed to support defense from the sea i would therefore like to make the following five points if the navy receives the same amount of money for ship construction in the next thirty years that it has over the three decades about fifteen billion per year it will not be able to afford its three hundred thirteen shipped to the navy's draft two thousand and eleven shipbuilding plan as reported in the press increases the navy's stated requirement for its fleet three hundred thirteen ships of three hundred twenty four but the production schedule and the only two hundred twenty two ships seventy four fewer than the previous plan most of the reductions would come from the navy's combat ship three estimates the plan would cost an average of twenty billion per year i stress that this is addition to the resources needed to execute the draft two thousand and eleven plan it could probably purchase the fifty six additional ships identified in the alternative construction plan that accompanied accompanied the draft two thousand and eleven point five that the navy needs to dedicate ships to maintain a continuous patrol for ballistic missile defense as many as five to six ships per station would be needed if the navy employees were to crewing on b m d ships or bases them in the european theater and they could make do with your ship a report to the subcommittee in two thousand and eight estimated that carrying out the navy's two thousand and nine shipbuilding plan to increase to purchase two hundred ninety six ships over thirty years would cost an average of almost twenty seven billion dollars a year senior navy officials ha in recent months the service expects to make do with thirteen to fifteen billion per year compared the number of ships that could be purchased with annual budget to be the thirteen billion or fifteen billion just three scenarios for average cost two point one  at the bottom end of the range a thirteen billion dollars annual budget would buy one hundred forty four ships over thirty years assuming an average cost of two point seven billion at the top end of the range fifteen billion dollars annual budget would yield two hundred fourteen ships over thirty years information what the navy believes the draft two thousand and eleven plan would cost assessment of the draft two thousand and eleven plan suggests it costs an average of about twenty billion dollars a year in two thousand and ten dollars the alternative two thousand and eleven plan which adds  necessarily mean that they would be cheaper to build even after removing the effects of the press reports indicate that the navy expects a class of twelve designation for the new tumor to cost total of about eighty billion dollars that total would cost an average of seven billion dollars in all the expect the entire new class of boomers would cost about eighty five billion dollars in light of the crucial role strategic submarines play in the us policy makers may regard them as the most critical part of the navy ship building plan if those subs are going to be replaced them out of what happened and if the navy enough resources to pay for them above and beyond what it might otherwise expect to allocate to ship building for ships and attack submarines under the alternative plan i forty the navy would be about the same size as today's battle for not fifty ships smaller as would be would be the case under the draft two thousand and eleven finally with respect to the b m d mission in a report last year my colleague mike bennett determined  that stations would provide nearly full coverage of europe from iranian missile threats by around two thousand and eighteen the standard missile three block to a was deployed however the missile defense agency has stated that a broader and more demanding mission of defending under the navy's traditional deployment cycle stations would require a rotation of forty two ships whereas five stations could require twenty six ships to provide continuous patrols the navy could reduce the number of ships needed to provide full time b m d presence by employing alternative crewing schemes are basing ships in europe for example if the navy rotated for deployed ships three ships would be needed to keep one operating full time in a designated b m d patrol area and that case only twenty four ships would be necessary to support eight stations in the near term or fifteen ships for five stations beyond two thousand and twenty the navy however does not currently envision dedicating ships to the single mission of missile defense instead it plans to send b m d capable ships on regular deployments to perform the full range of missions required of service combatant although some of those would be operating in or near the station area under that approach using rotating crews and being the capable ships could prove more challenging because the crews not on deployment would need to maintain a high level of proficiency in the relatively inexpensive ships are over represented in the five year plan relative to their portion of planned fleet making it easier to procure ten ships per year with an available funding at some point in the future when the declining power such perceptions can make it more difficult for the us to achieve policy goals in a variety of finance climate change and nonproliferation perceptions of the u s as a declining power might be particularly likely in the pacific basin where naval forces play a prominent role in military operations and where china which is modernizing its navy as a rising power perceptions in the pacific basin of us declining power in china as a rising power energy weapons could be critical to the navy's long term ability to affordably counter ballistic missiles wealthy and determined adversary the policymakers decide that the navy's improved fifty one would not be an adequate solution and that one thousand based solution would be an affordable then other options would include fifty one with modifications that are more significant than what the navy reportedly considering for a new design destroyer lp seventeen as the basis for the l s d replacement because of the lengthy interval between f y twelve and the start of the replacement program years from now procuring an additional l p g seventeen within the five year plan perhaps in  first of all america's economy has fallen from thirty two percent of global output at the beginning of this decade four percent today and as a consequence we will not be able to continue sustaining about half of the world's military outweigh the rising price of military pay and benefits is technology spending out of the defense budget creating tensions between the navy and the marine corps as to which it should be both of these trends portend bitter debate over ship building plants in the years ahead to spend about half of my time talking about the undersea point and that's where our most pressing budget problem is and then spend the remainder of the time talking about the turning to the undersea fleet i think if you talk to most of the experts in the field they will tell you the submarines are the one class of warship or one type of warship that we can count on still being survivable in hostile environment century now aside from a handful of special use submarines the u s navy's undersea plea today essentially consists of two types of warships ballistic missile submarines to provide secure retaliate torrie forces to our nuclear deterrent and  past attack submarines which in addition to collecting all sorts of intelligence conduct an array of other military missions but quadrennial review will reaffirm the priority of the nuclear deterrence mission but also signal something else that the bombers and the land based missiles that are the other two legs of the triad are going to be contributing less capability in the future so ballistic missile submarines will become even more important in deterring nuclear attack in the future and that has to attack in other words the navy can't just build more tried and it needs to design a better successor and in order for a new sub to be ready on time the six year design must command in two thousand and twelve assuming a successful design  the navy plans to build the ship in twenty nineteen another ship in two thousand and twenty two and then one ship per year between twenty twenty four and twenty thirty three but each of the trident replacements after the leadership is going to cost five billion dollars and the only way to find that kind of money and already overstretched shipbuilding account would be to defer other vessels responding to was made worse by the fact that the navy waited too long to ramp up the production of the virginia class attack so it will now be unable to prevent the attack sub inventory from falling below that require number of forty eight once the los angeles class begins retiring later this year the navy can manage the looming shortfall in the tax subs by twenty eight that is now the navy's projected internal numbers the lowest point is forty three boats in two thousand and twenty eight the good news is that the time and money required to build each new virginia is falling steadily and there's a lot of things we can do to improve see if we extend the production run beyond the planned thirty but nonetheless we can accommodate all of this undersea design and construction work within likely shipbuilding budgets without displacing required surface vessels so therefore i think that special steps are going to need to be taken to fund the pride replacement with ballistic missile subs destined to become the most important part of our nuclear deterrent in the future there is a strong case for funding the trident replacement outside normal budget channels rather than cutting construction of other warships to cover the cost of our most important military mission turning to the surface fleet many of you have no doubt heard the hottest shipbuilder rumor spawned by the q t r process mr aiken in fact alluded to it in his own remarks that the number of aircraft carriers will be cut from eleven to ten or even to nine i can assure you that if that happens it won't be because the navy wants to do it it is true that we are headed down to ten thousand and thirteen because there's a thirty three month gap between when the enterprise goes out of the fleet and the first class comes in the enterprise would be prohibitively expensive to refuel because it has if you can believe it eight reactors but that's only a temporary situation although the navy could meet current war funding requirements with one or two less carriers a permanent cut wouldn't be prudent for two reasons first of all we're fighting requirements are going to change in the future we don't know how but they will change secondly there is a high likelihood that wartime attrition will occur in the future so it makes little sense to cut the number of carriers to the absolute minimum currently required in the navy's twenty seven ship building plan we'll call actually eleven laptops through the year two thousand and forty there's a lot to be said  about that the next class carriers the fourth class that will be the successor to the new it delivers more sorties that delivers more power it delivers more protection in addition it reduces accruing requirements by several hundred personnel at least i'm not very optimistic about the survivability or utility of carriers in the western pacific as we get to mid century well i wish i could say that the story was that simple for the rest of the surface what we see there  an unsettled picture created equal parts by lack of money and a lack of agreement between the navy and the marine corps as to what needs to be bought in the case of the surface combattants the navy is poised to abandon two of the three classes in a new class is it announced at the beginning of the combat system is upgraded on legacy destroyers and cruisers because the tracking of missiles doesn't have to just be done from a ship it can also be done from space by systems like the new space tracking and surveillance satellite the third new combatant announced at the beginning of the decade the littoral combat ship is essential to expanding fleet numbers to three hundred i think this door refers to the fact that we've managed to get the ship building numbers up by building a lot of smaller cheaper ships  and i guess also the joint high speed vessel but it really is essential for that reason to get it back up above three hundred again however the navy has decided for budget reasons to down select to a single design that step really was necessary because it's very expensive to maintain upgrade and equip two different classes of ship for what is essentially the same mission i predict that if the winning team does a good job building a ship in the service never will go to a second source that will try to save as much money as possible by sticking with one finally as for the warfare that part of the force posture looks likely to be a focus of controversy for many years the navy and the marine corps have parted ways parted ways on the need for thirty eight ships and as a result the marines are now lobbying the congress to fund vessels that are not included in the twenty eleven ship building plan to say that they parted ways is a bit of a statement it's not just that the navy wants to buy fewer than thirty eight in the future it wants to buy fewer than thirty in the future personally i agree with the position chairman taylor expressed last year that we should fund serial production and transport ships to provide  and replace aging basle but that does not seem to be where the navy wants to go secretary gates says foreshadowed the possibility that reductions in warfare capability may emerge from the q t r but i would urge you to look very capabilities the nation naval ship building requirements are not likely to fit within projected budget therefore i think we need to have a discussion about how important nuclear deterrence is to national survival and fund the submarine supporting that mission in a manner that does not hobble service missions friend and i wish he was here today i also have had a very good friend by the name of parker retired as the undersecretary of the army after one day for speaking his mind rather than secretary rumsfeld wanted to so i understand the was predicated on the belief that you needed a lot of power generation and a very big sensor because all of the tracking and discrimination of enemy warheads was going to be done by one radar on one show we don't really need to go that route we're living in the era of network warfare and therefore there is the possibility not just to gather all of the navy but also overhead in the joint force in the intelligence community if you do that then you have the potential to track incoming ballistic missiles including dr thompson said i would add a few observations addition to that maybe three hundred thirteen ship requirement which was developed memory serves correctly back in about two thousand and six had a requirement for eighty eight large surface combat that was requirement  depend again as i sort of indicated in my testimony how many stations are you going to have where ships need to be in constant patrol are those ships going to be patrolled we need to have them there providing coverage twenty four hours a day seven days a week if that's the case i would agree with dr thompson that the requirement for ships is in the order of dozens as my statement indicated on the other hand if you think you can search ships to the area when a crisis developing if you want to provide coverage that way then the number would be considerably less and or three quick additions to what isn't already in terms of evidence that the navy has funded what they are talking about in terms of conversions of existing ships it's my understanding that it is the navy's plan it has been for the last year or two that every fifty one eventually be converted to a b m d configuration and taking a regular fifty one and converting it to the current b m d configuration costs about forty or forty five million dollars my understanding for a year or two now that that is the navy's intention so the navy is resourcing the idea of having many virtually all of its fifty one's and at least five cruisers be converted for  being in terms of funding new builds if the press reports are accurate about the cruiser destroyer requirement creasing the ninety six those press reports also indicate that the navy is not fully resourcing that because even under the scenario where the navy does not have to pay for the s s b s out of hyde and the other ship building programs are consequently not produced the navy is still not achieving and maintaining a ninety six ship force according to the tables that were published and third in terms of the additional burden on the cruiser destroyer one way of looking at it is to know that over the past two years the navy has maintained an average presence in european waters of about one point seven cruisers and destroyers and now we're looking at increasing that to something like six perhaps if we have three stations with two ships and then eric is taking a preliminary math on what that may mean my math is not really substantially different than that five it's been updated more than forty times and i did that to make sure that there was a readily available source of information for members and staff on the topic in terms of what role  that to one degree or another are related and if china does not become a sizable element of public discussion over defense plans and programs proposing to do that because they are familiar they are now comfortable with the idea of doing the mission a different way with the improved fifty one in the netted sensors but nevertheless i think that if the navy had its druthers and if it had its resources  increased it might have preferred to still go ahead with that program and in terms of intelligence collection one of the ways of responding or of programming with consciousness toward chinese is to take steps to increase intelligence and monitoring of what is going on in china's navy and i have talked about that in my c r s report on china naval modernization and so if you were to increase the emphasis that china pla to what the strategy should be i know that you can't sort of go about developing a strategy in the absence of a budget because if you could do that you would need to but you would need a strategy do everything you possibly want to there's always a balance of sort of cost and how that balance is weighing some number of cruisers numerically it would be a very large number of fifty one plus some number of cruisers in addition to that going back to what you were talking about with regards to the fifty one and the radar capabilities of the fifty ones and then modernizing them is there is the navy is pursuing at least based on press reports that we've seen so far as they're going to pursue the fifty one for the foreseeable future they're going upgrade everything that they've got most of the cruisers and then all of the all the fifty wants to do that and they will follow on with continuing to build fifty one or some modified version of them driven in part because they think it's probably the most cost effective solution and also in part because it is one of the from their perspective one of the least technically risky solutions they're very familiar with aegis system they're very familiar with but the whole thing they think they can do what they need to do with the least amount of technical rest to be able to get the capability up to the point they want i think we may have a debate about several new ship design so the navy is now looking forward to a period where it is introducing relatively fewer new ship designs and is spending more time proportionately on getting into regular serialized production of existing that putting nuclear propulsion onto a larger surface combatant would increase procurement costs other things held in that ship design by several hundred million dollars i think it was something in the range of seven hundred million dollars answer your question about whether there was a precedent for treating things budgetary this way you can argue that ballistic missile defense is just such a president that's not a service that's a mission and yet it's its own category in the defense budget that contains funding for b m d capabilities in various services so if b m d has been separated out as a mission area for co locating a variety of spending that contributes to that mission you can argue that that's a precedent for them taking strategic nuclear deterrence as a mission and then locating their funding from various services that contributes to that mission so that the spending of that can be optimized at the mission level rather than having it separated  for this mission yes actually i've been following the proposal for doing something like that since i testified before the subcommittee in july of zero eight in that testimony i referred to it as an adjunct  and there is a proposal from industry to build several of those ships to act as adjunct radars so that the radars on the surface combatants don't have to be as big it may not necessarily reduce the numbers of cruisers destroyers you need but it would allow you to do the mission with cruisers and destroyers that had radars on them that are not as big as they would otherwise need to be because some of that radar burden is being picked up by the radar ships so that proposal is out there my understanding is that the defense department and the navy have been made aware of it and that they've seen the outlines of it i do not know what the status of that proposal is inside the navy  ship's mission because it didn't have to necessarily be in some other location as it might have to be if it were really carrying the full burden of collecting the radar data there   press reports that we've seen so far indicates that the navy did get some rain put back in two thousand and fifteen so the draft plan that they're looking at would have to at least from two thousand and eleven two thousand and fifteen now beyond that that's a different that would be a different different story the question of whether what the cost implications if they don't achieve two year is going to have several effects the first effect would be that if you go back to having build one submarine a year that individual submarine is going to be a lot more increase the cost by on the orders of hundreds of millions of dollars it will have a second effect on it will increase the cost of the nuclear powered aircraft carriers that are being built at newport news already t resettling of the carrier program that was announced by secretary gates last spring to five years adds a little cost to the submarines on the order of twenty to fifty million dollars according to the navy so presumably going back to a one per year after two thousand and fifteen is going to increase cost only have to decide someplace it's not going to be covered just very quickly in terms of the cost impact it's worth remembering that when the navy's was working toward the goal of getting the procurement cost of the virginia class down to two point zero billion dollars in five dollars that they had to take about four hundred million dollars out of the cost of the ship to do that about half of that improvement about two hundred million dollars was achieved simply by going from one boat per year to two so if you were to go from two boats per year back to one you would expect that the cost of the ships would increase by roughly that same amount so we're looking at something in the range of a two hundred million dollars increase in you know procurement cost you know five dollars which would be higher in today's dollars should you go back down to one per year in terms of the owner ability of the procurement profile to being reduced to less than two per year there's really three periods in question one is between now and f y thirteen and it seems to me that it's unlikely that you would fall off two per year between now and f y thirteen because those boats are covered under a multi year procurement plan and dropping below two premier and that period would entail breaking that multi year contract which has a very significant termination liability attached to it the second period is fourteen through eighteen when you're no longer under the current multi year contract that calls for two per year and i think during that period there is a fair amount of vulnerability  for or the navy to look at taking a boat out every once in a while and dropping to something less than a solid two per year and then an even higher period of vulnerability starts n f y nineteen when we start building the new s s p and because then at that point you run into this issue design stability as a statutory requirement for qualifying for m y p but for the first few ships in the program you could use a block by as was done for the first two ships in the virginia class and the savings on the virginia class block by were in the range of about five percent if it was an augmented block by that also had already which was not the case in the virginia block by could be something north of five percent later on in the program when you get into a real multi year procurement then the savings might plan it relates to the m t b of ships in the gulf coast but in the thirty year plan it also relates to the scenario that happens if the navy has to pay for the s s b ns out of height because that drives down many of the other ship building budget you don't get an offsetting increase to your budget to help pay for whether that increases within the shipbuilding count or with the new specialized account elsewhere in the budget that you have to absorb it along with everything else that you are already planning  been multiple press articles over the last year or two about how the navy is considering or was at least at one point considering using either the lp seventeen hole or the hole as the basis for a new command ship i think if you have a command ship in the program that would continue to be the navy's going in the way of looking at the issue but it appears now that under pressures that the command ship has dropped out of the navy's program entirely in which the question doesn't arise anymore wouldn't consider that to be an irrational consideration no sir i would not consider that to be a rational consideration to my good friend with regional concerns from anyone you obviously are very very focused on and very knowledgeable about submarine fleet and i welcome that what is your vision of what we're going to do to replace the three that i know of and perhaps more special missions submarines that are currently in the force have you heard anyone discussed we're going to do that with serial productions with enhanced holes that we're going to take out of the current or is carter and your fellow poles going to live forever well the current boiler fleet and reportedly and repressed reports that came out last year the navy for a time was looking at bringing forward the start of the new oil program and combining it with what had been the lp program into some kind of combine and they'll be in the most recent reporting about the navy ship building plan that idea has once again been set aside and the navy is proposing to build a reduced cost  nation is not going to be followed up with the proper budget requests so i realize we don't live in an ideal world i realize that  three to five ships per station so depending on how fast you want to get there you would need to start adding ships into your ship building plant pretty much as soon as the acquisition system can accommodate them meaning that if you add money this year you may not be able to buy the ship immediately but but maybe you can kind of depends on what the capacity is that the navy currently has available to to add ships to the program so in specific again i realized i live in an ideal world i'm under the same strictures as eric is about making policy recommendations but if the issue is trying to meet the near term pressure for b m d capability in europe then the steps that you might want to look at in terms of their ability to produce capability in the short run there are two and one of those would be to fund the modernization of existing fifty ones at whatever  is old so it's a little bit higher but the navy has already had some experience in doing this so i think there's less risk in that number than there would be in building a lead ship for example ok so it may be something higher than forty to forty five million but if you're trying to find ways to generate b m d capability in the short run to meet a short demand that has appeared for b m d capability as a result of the administration's new plan then one option would be to look at funding conversions of existing fifty one into a b m t configuration at whatever annual rate both funding and industrial capacity could support and the other would be to put additional money into the procurement of s m three missiles because the inventory of those is fairly low and once you put money into that those missiles will appear two to three years later if you want to solve a longer term  are the last time i checked being accomplished through a two part plan of roughly twelve months duration between the two parts where the ship comes in and has many upgrades for roughly six months and then comes in at a later point for combat system upgrades again another six months or so and presumably the b m d work would be done principally during the second of those two modernization periods and so after about twelve months of work which would take more than twelve months to accomplish because of the time in between those two at the end of that process you now have fifty one that's modernized in various ways including the addition of a b and d capability want to make sure that we get that down of the record