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i 

74–472 2012

[H.A.S.C. No. 112–131] 

THE NAVY’S 30-YEAR SHIPBUILDING 

PLAN: ASSUMPTIONS AND ASSOCIATED 

RISKS TO NATIONAL SECURITY 

HEARING 

BEFORE THE

SUBCOMMITTEE ON OVERSIGHT 

AND INVESTIGATIONS 

OF THE

COMMITTEE ON ARMED SERVICES 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

SECOND SESSION 

HEARING HELD 

APRIL 18, 2012 
(II) 

SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS 

ROB WITTMAN, Virginia, Chairman 

K. MICHAEL CONAWAY, Texas 

MO BROOKS, Alabama 

TODD YOUNG, Indiana 

TOM ROONEY, Florida 

MIKE COFFMAN, Colorado 

JIM COOPER, Tennessee 

ROBERT ANDREWS, New Jersey 

MARK S. CRITZ, Pennsylvania 

COLLEEN HANABUSA, Hawaii 

MICHELE PEARCE, Professional Staff Member 

PAUL LEWIS, Professional Staff Member 

ARTHUR MILIKH, Staff Assistant 
(III) 

C O N T E N T S 

CHRONOLOGICAL LIST OF HEARINGS 

2012 

Page 

HEARING: 

Wednesday, April 18, 2012, The Navy’s 30-Year Shipbuilding Plan: Assumptions and Associated Risks to National Security ............................................... 1 

APPENDIX: 

Wednesday, April 18, 2012 ..................................................................................... 21 

WEDNESDAY, APRIL 18, 2012 

THE NAVY’S 30-YEAR SHIPBUILDING PLAN: ASSUMPTIONS AND 

ASSOCIATED RISKS TO NATIONAL SECURITY 

STATEMENTS PRESENTED BY MEMBERS OF CONGRESS 

Wittman, Hon. Rob, a Representative from Virginia, Chairman, Subcommittee 

on Oversight and Investigations ......................................................................... 1 

WITNESSES 

Cropsey, Seth, Senior Fellow, Hudson Institute ................................................... 3 

Eaglen, Mackenzie, Resident Fellow at the Marilyn Ware Center for Security 

Studies, American Enterprise Institute ............................................................. 8 

O’Rourke, Ronald, Defense Policy and Arms Control Section, Congressional 

Research Service .................................................................................................. 2 

APPENDIX 

PREPARED STATEMENTS: 

Cropsey, Seth .................................................................................................... 52 

Eaglen, Mackenzie ............................................................................................ 62 

O’Rourke, Ronald .............................................................................................. 27 

Wittman, Hon. Rob ........................................................................................... 25 

DOCUMENTS SUBMITTED FOR THE RECORD: 

[There were no Documents submitted.] 

WITNESS RESPONSES TO QUESTIONS ASKED DURING THE HEARING: 

[There were no Questions submitted during the hearing.] 

QUESTIONS SUBMITTED BY MEMBERS POST HEARING: 

[There were no Questions submitted post hearing.] 

(1) 

THE NAVY’S 30-YEAR SHIPBUILDING PLAN: 

ASSUMPTIONS AND ASSOCIATED RISKS TO 

NATIONAL SECURITY 

HOUSE OF REPRESENTATIVES, COMMITTEE ON ARMED SERVICES, SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS, 

Washington, DC, Wednesday, April 18, 2012. 

The subcommittee met, pursuant to call, at 3 p.m., in room 2118 

Rayburn House Office Building, Hon. Rob Wittman (chairman of 

the subcommittee) presiding. 

OPENING STATEMENT OF HON. ROB WITTMAN, A REPRESENTATIVE FROM VIRGINIA, CHAIRMAN, SUBCOMMITTEE ON 

OVERSIGHT AND INVESTIGATIONS 

Mr. WITTMAN. Ladies and gentlemen I will call to order the Subcommittee on Oversight and Investigations of the House Armed 

Services Committee. I would like to welcome everybody to today’s 

hearing on the assumptions and risks associated with the Navy’s 

30-year shipbuilding plan and the consequent impact on national 

security. 

Today we are going to be honored to hear from Mr. Ron O’Rourke 

with the Defense Policy and Arms Control Section of the Congressional Research Service. Mr. O’Rourke, thank you for joining us. 

Mr. Seth Cropsey, a Senior Fellow at the Hudson Institute. Dr. 

Cropsey, appreciate you joining us. And also Ms. Mackenzie 

Eaglen, a Resident Fellow at the Marilyn Ware Center for Security 

Studies at the American Enterprise Institute. Thanks, Ms. Eaglen, 

and thank you so much again for joining us. 

Again, I want to thank you all so much for taking the time out 

of what I know are busy schedules to help our committee better understand the implications of our 30-year plan for Navy force structure, our defense industrial base and, most importantly, our national security. I couldn’t be more pleased to have such distinguished scholars participating in today’s hearing. 

Before we get started I have a quick administrative matter to address. I anticipate a number of members from other subcommittees 

will join us. And I would like to ask for unanimous consent that 

they be allowed to participate. 

Absent any objection, it is so ordered. And I will recognize these 

members at the appropriate time for 5 minutes after all O&I Subcommittee members have had an opportunity to question the witnesses. 

At this particular time I will turn it over to our ranking member, 

Mr. Jim Cooper from the great State of Tennessee. Mr. Cooper. 
2 

[The prepared statement of Mr. Wittman can be found in the Appendix on page 25.] 

Mr. COOPER. Thank you, Mr. Chairman. I appreciate you holding 

this hearing. I have no opening statement and I look forward to the 

testimony of the witnesses. 

Mr. WITTMAN. Very good. With that we will begin with our witnesses. Mr. O’Rourke, we will let you begin. 

STATEMENT OF RONALD O’ROURKE, DEFENSE POLICY AND 

ARMS CONTROL SECTION, CONGRESSIONAL RESEARCH 

SERVICE 

Mr. O’ROURKE. Thank you, Chairman Wittman, Ranking Member Cooper, distinguished members of the subcommittee. Thank 

you for the chance to speak today on assumptions and risks to national security of the new 30-year shipbuilding plan. With your permission I would like to submit my statement for the record and 

summarize it here with a few brief remarks. 

The subcommittee is familiar with the Navy’s goal for a fleet of 

313 ships. The 30-year plan presents a new and slightly revised 

goal for a fleet of about 310 to 316 ships. This slightly revised goal 

is an interim number that may be refined further when the Navy 

completes its force structure assessment. 

Navy officials have testified at least twice this year that a Navy 

of more than 500 ships would be required to fully meet combatant 

commander requests for Navy forces. The difference between a fleet 

of 500 ships and a fleet of about 310 to 316 can be viewed as one 

measure of the operational risks associated with the goal of a fleet 

of about 310 to 316 ships. A goal for a fleet of more than 500 ships 

might be viewed as a fiscally unconstrained goal. 

The new 30-year plan includes a total of 268 ships to be procured. Like previous 30-year plans, the new 30-year plan would result in a fleet that would not fully support all elements of the 

Navy’s ship force structure goal. The distribution of the 268 ships 

over the 30-year period, combined with the age composition of the 

Navy’s existing ships, results in a projected fleet that would remain 

below 310 ships during the entire 30-year period. The fleet would 

experience shortfalls in various years in ballistic missile submarines, cruisers, destroyers, attack submarines, and amphibious 

ships. 

The projected shortfall in ballistic missile submarines is new 

with this plan and results from a 2-year deferral in the start of 

Ohio replacement procurement. The projected shortfalls in cruisers, 

destroyers, and attack submarines are smaller than they were 

under last year’s plan due to a reduction in the cruiser, destroyer 

force-level goal and the insertion of additional destroyers and attack submarines into the 30-year plan. 

Although the projected cruiser, destroyer, and attack submarine 

shortfalls are smaller under the new 30-year plan than they were 

under last year’s plan, these shortfalls, and the ones projected for 

ballistic missile submarines and amphibious ships, could make it 

difficult for the Navy to fully perform its projected missions in certain years. A key potential oversight issue for Congress concerns 

whether the Navy in coming years would be large enough under 

the 30-year plan to adequately counter improved Chinese maritime 
3 

anti-access forces while also adequately performing other missions 

of interest to U.S. policymakers. 

The 30-year plan reflects assumptions concerning ship service 

lives, ship procurement costs, and projected shipbuilding funding 

levels. If ships are retired earlier than planned, or ship procurement costs turn out to be higher than estimated, or if funding levels for shipbuilding turn out to be lower than projected, then the 

Navy in certain years will have fewer ships than shown in the 30- 

year plan. This could make it more difficult for the Navy to fully 

perform its projected missions in certain years. It might also reduce 

the Navy’s ability to deter regional aggression in certain years, 

which in turn could increase the likelihood of a conflict that could 

require Navy combat operations. 

In terms of gauging risks, it can be noted that the Navy in recent 

years has for various reasons retired certain ships well before the 

ends of their service lives; that certain shipbuilding programs may 

pose a risk of cost growth; and that the shipbuilding plan assumes 

a funding hump in the middle 10 years of the plan that is 26 percent higher than the average for the first and last 10 years of the 

plan. 

Congressional review to date of the Navy’s fiscal year 2013 budget has included some discussion of near-term options for adding 

ships to the plan and reducing ship unit procurement costs. These 

options include adding a second Virginia class submarine in fiscal 

year 2014, adding a 10th ship to the proposed DDG–51 multiyear, 

and procuring the aircraft carrier CVN–79 and -80 under a blockbuy arrangement. I would be happy to discuss these options or others with the subcommittee. 

Mr. Chairman, this concludes my testimony. Thank you again for 

the chance to speak on this issue. And I will be pleased to respond 

to any questions that the subcommittee might have. 

[The prepared statement of Mr. O’Rourke can be found in the Appendix on page 27.] 

Mr. WITTMAN. Very good. Thank you so much, Mr. O’Rourke, for 

your testimony. We look forward to the questioning portion of this 

hearing. 

And with that, Dr. Cropsey, we will turn to you. 

STATEMENT OF SETH CROPSEY, SENIOR FELLOW, HUDSON 

INSTITUTE 

Dr. CROPSEY. Chairman Wittman, Ranking Member Cooper, and 

other members of the committee, I am honored by your request to 

speak before this committee. The United States, like other great 

maritime nations in history, became a seapower because its geography coincided with the enterprising commercial spirit of our people. John Adams understood this link. He wrote that ‘‘the Great 

Questions of commerce and power between nations must be determined by sea,’’ that ‘‘all reasonable encouragement should be given 

to a navy.’’ 

Adams said ‘‘Great Questions.’’ Like the other Founders, even 

those who doubted American seapower, Adams expected America to 

become a great nation. He was first among the Founders in grasping the connection between American greatness and our seapower. 

So I am by no means the first to believe that the decisions about 
4 

American naval power that rest importantly in your hands must 

shape our security, our commerce, and our destiny as a great 

power. 

The continued shrinkage of the American combat fleet threatens 

our access to the world’s fastest growing markets. It risks our leadership of a more-than-six-decade-old alliance on the western edge 

of the Eurasian continent. It challenges our country-to-country alliances with the great states that bracket the same continent to the 

east. It risks our ability to defend the United States at a distance 

from our homeland. And it threatens the international system that 

a century of American diplomacy and arms have labored to create 

and to sustain. 

Neither this nor any generation has enjoyed the ability to make 

decisions about its future in a vacuum. Resources, technology, and 

competing strategic demands of the moment cannot simply be 

brushed aside. There will always be tension between long-term 

goals and short-term needs. Balancing between them is the difficult 

task of statesmanship. When the long term is sacrificed for the 

short, there are always consequences. They are always bad. 

In the 1970s, political leaders and professionals in the field of intelligence decided that electronic and overhead intelligence could 

largely replace human intelligence. On September 11th, 2001, we 

learned to our dismay that this was an enormous mistake. The effort is still underway to compensate for that short-term decision of 

more than three decades ago. 

In the years before economists changed their minds about the acceptability of a sizable national debt, British leaders thought they 

could not bear the imbalance in the nation’s accounts caused in 

large measure by the unexpectedly high cost of the Boer war. One 

measure they took was to reduce their naval expense. They decided 

that Japan could be depended on to maintain order in the Western 

Pacific and that the United States could be trusted with the Western Atlantic. As things turned out, they were right about the Western Atlantic. 

Today, one short-term view is that because our combat fleet is 

larger than the next 10 or 11 navies combined, we can safely allow 

the U.S. fleet to go on shrinking. A misunderstanding of the relatively small historic size of current defense costs and their relation to the nondefense portion of the national budget, which is a 

ratio of 1 as is to 5, contributes to this short-term view. 

Former Chairman of the Joint Chiefs Admiral Mullen said that 

the Nation’s debt is the greatest threat to our security. I believe 

that the greater threat is the failure to keep a statesmanlike perspective of our security needs in relation to other important priorities. Dividing budget cuts equally between nondefense and defense 

expenses as in last year’s sequester will neither resolve our finances nor assure our security. 

Assuming an equal division among the military services, however, sequestration would reduce the Navy’s annual budget from 

2013 to 2021 by significantly more than the amount allotted to new 

ship construction. American naval forces need to remain larger 

than the combined power of its as-yet smaller potential competitors 

because of their ambition, their prospects for increasing wealth, 
5 

and the possibility that their asymmetric strategy will diminish our 

current advantage. 

The U.S. is also the only seapower with a transoceanic, global 

reach. This allows us to project power, to deter war, to win it if necessary, to communicate with our allies all around the world and at 

the same time. 

Surrendering this ability lays open the world’s strategic chokepoints to chaos or the will of states that possess an idea of international order that is wholly different from our own. 

The Navy’s 2013 30-year plan points the U.S. in precisely this direction. As Admiral Greenert, the Chief of Naval Operations, said 

recently, the Navy now aims for a fleet of ‘‘approximately 300 

ships.’’ This lowers the projected size of the fleet by 13 ships from 

what the Navy has for the previous 6 years said it requires to carry 

out its assigned missions. Is a reduction of 13 ships sufficient by 

itself to cause alarm? I don’t think so. Is the continued drift toward 

a smaller and smaller Navy troubling? Yes, it is. 

Twenty-five years ago the fleet reached its late and post cold-war 

era high watermark of slightly fewer than 600 ships. When a Navy 

request for a frigate was rejected, then-Secretary of the Navy Jim 

Webb remarked that this was likely a modern era turning point for 

the fleet. His prediction turned out to be correct. It has contracted 

since that day. Abandoning the goal of a 313-ship Navy should not 

be seen as an isolated event, but rather as part of a continuum 

which, stretching into the future, looks increasingly dismal. 

From fiscal year 2012 to the fiscal year 2013 plan, the administration has reduced the number of ships it plans to purchase by 28 

percent, from 57 to 41. The recently published 30-year plan will 

hold the number of ships below 300 for half the entire 30-year period. 

The fiscal year 2012 budget allocated $14.6 billion, that is constant 2012 dollars, for new construction alone. The fiscal year 2013 

budget cuts back this figure to $10.9 billion. The current future 

year defense plan calls for an average of $11.9 billion, again in 

2012 dollars, per year for new construction. 

After the current FYDP [Future Years Defense Program] is complete, the Navy plans to increase its annual spending on new construction for the following FYDP to $18.5 billion. In the following 

decade the same figure increases to a yearly average of $19.5 billion and then drops to $15.9 billion per year for the last decade of 

the 30-year plan. 

The increases in new ship construction envisioned for the fiscal 

year 2017 to fiscal year 2022 period and for the second decade of 

the 30-year plan are 70 percent and 79 percent respectively. I 

would prefer to defer to this committee’s judgment about the likelihood that such plans will be carried out. 

If, however, the average of $11.9 billion per year that the administration plans to spend over the next 5 years were to be maintained over 30 years, the result would be a total expenditure on 

new ships of about $357 billion. If the current average price of a 

single naval combatant, around $2 billion, were to be maintained— 

and this is a large if—this would purchase 178 ships at the end of 

three decades. Under the best circumstances, this would result in 
6 

a fleet considerably smaller than the one that now exists, one that 

is closer to 200, than 300 ships. 

However, even if the administration’s 30-year plan is fully executed, the Navy will still face significant periods of time when it 

will be short of the attack submarines it needs, short of the large 

surface combatants it needs, and short of the amphibious warfare 

ships it needs. 

I would like to be able to tell the committee that questions about 

the fleet’s future size can be answered by the increased combat capability that ships of today enjoy over their predecessors. There is 

some truth to this. There was also a truth in the story about the 

musician who when asked about how to get to Carnegie Hall answered, ‘‘practice.’’ The musician is correct that practice is necessary, but practice is not a substitute for real talent. And capability is not a substitute for the presence that comes with a sufficient number of ships. 

The combat capability of U.S. naval vessels has increased importantly over recent years and such developments that lie on the horizon as the rail gun, solid-state lasers, and the unmanned vehicles 

in the air, on the surface, and beneath the sea will continue to improve our naval capability, although it is important to note that research for many of these advances now stands to be cut. 

But if we could construct a single future destroyer that is as 

powerful as two current ones, and if the fleet was diminished proportionately, would we be better off? What good could an extremely 

powerful destroyer on patrol in the Persian Gulf do if a second is 

unavailable in the event of a serious crisis in East Asia’s waters? 

The answer is no good at all. Numbers matter. 

I would also like to be able to tell the committee that encouraging our allies to assume a greater share of responsibility for our 

collective maritime security could compensate for a reduced U.S. 

combat fleet, but partnerships with foreign navies envisioned by 

the Navy’s Maritime Strategy published in 2007 aimed roughly in 

this direction. But most of these partners are small coastal forces 

that lack the seagoing and seakeeping ability of the U.S. fleet. And 

while the older naval powers such as those in Western Europe 

maintain larger combat fleets, they are a shadow of their former 

selves, and the shadow is getting dimmer. There is no good reason 

to expect they will take up the slack left by a shrinking U.S. Navy. 

If the Navy’s assumption is mistaken that current political leadership will agree to large future increases in shipbuilding, we will 

be headed toward a kind of naval holiday. The equally optimistic 

expectation that average ship costs can be maintained at roughly 

$2 billion per vessel prolongs the holiday. This will not be a pleasant holiday. China’s economy has its problems, but it continues to 

perform. Jane’s Defense Forecasts says that China will double its 

defense budget between now and 2015. Russia plans a $160 billion 

naval expansion in the Pacific which is to include 36 new submarines and 40 surface ships. Some of you may have noted that 

the Russians and Chinese are holding joint exercises shortly in the 

Pacific. 

If a couple postpones needed repairs on their home for a decade 

and then decides to fix all that has been broken, they will be lucky 

to finish the job in a year. They will also be fortunate because 
7 

other more prudent owners will have sustained the home repair industry. Our shipbuilding industry does not have the benefit of 

other purchasers who can sustain it if Navy budgets prove unequal 

to the task. 

For the industrial base that supports U.S. shipbuilding, a budget-induced naval holiday would be a disaster that could take decades if ever from which to recover. 

Finally there are consequences if U.S. seapower continues to decrease and shows itself unable to meet even the reduced goals that 

it has set for itself. History is a good guide. 

During our Civil War, British political leadership considered recognizing the Confederacy but was eventually dissuaded by Union 

military success. In World War II, Sweden declared neutrality but 

grew increasingly amenable to allied requests as Hitler’s military 

position worsened. Romania initially sided with the Third Reich in 

the same war, but changed sides following U.S. attacks on their oil 

fields and the coup that deposed the pro-Nazi dictator Antonescu. 

Bulgarians followed a similar path from siding with the Nazis to 

switching their allegiance to the allies. More recently, Saudi Prince 

Bandar, acknowledging China’s increasing international prominence and power, visited Beijing and met with President Hu. 

American weakness at sea, especially in the Indo-Pacific, will 

change the current military, diplomatic, and commercial character 

of the region. Whether the U.S. fleet shrinks because of too little 

funding or because unreformed procurement practices have raised 

the price of ships, or because ships have been called home to save 

on operational expense, the result is pretty much the same. While 

we were once present in strength, we would be no more. 

A pivot to Asia, like any pivot, needs a fulcrum. American 

seapower is this fulcrum. Diminishing it removes the pivot. A nation burdened with massive debt whose ability to shape world 

events has been limited, in tandem with its capacity to invest in 

research and technology, will have more and more trouble finding 

markets. China’s potential hegemony would not only force its 

neighbors to reconsider whether the U.S. is a reliable ally, it would 

also become an increasingly powerful magnet for trade in the region and I believe at the expense of U.S. commerce. 

Unlike the U.S. whose seapower has protected sea lanes that 

other states have used to its benefit, China has a different set of 

values. It views with suspicion a liberal trading system, notwithstanding the benefits received from it. China’s friends include Iran 

and North Korea. Beijing is a poor candidate to support the international order that has been the keel of U.S. foreign and security 

policy for a century. Winning U.S. seapower is an invitation that 

China will regard as a complement to its rising military and navy 

in particular. It foreshadows a coercive resolution of territorial disputes in the South China Sea, the likelihood of an increased regional arms race, and the troubling international perception that 

the U.S. is or has abandoned its role as a great power. 

American seapower is the strategic keel of our foreign and security policy. Reducing it would be an exercise of history-making 

shortsightedness. Restoring it would be an act of statesmanship 

from which Americans and all who cherish political liberty would 

benefit for the remainder of this century. 
8 

Thank you for your patience and for the opportunity to address 

this committee. 

[The prepared statement of Dr. Cropsey can be found in the Appendix on page 52.] 

Mr. WITTMAN. Thank you, Dr. Cropsey. Ms. Eaglen. 

STATEMENT OF MACKENZIE EAGLEN, RESIDENT FELLOW AT 

THE MARILYN WARE CENTER FOR SECURITY STUDIES, 

AMERICAN ENTERPRISE INSTITUTE 

Ms. EAGLEN. Thank you, Chairman Wittman, and thank you 

Ranking Member Cooper and members of the committee for the 

chance to join you again this year. I too would ask that my written 

statement be submitted into the record and I will just briefly cover 

a few points in my opening remarks. I know you are on a tight 

schedule here today. 

Before the administration issued its guidance in January, strategic guidance, after the Budget Control Act with an emphasis on 

the Asia-Pacific, the pivot, we had the QDR [Quadrennial Defense 

Review] Independent Panel, which this committee strongly supported and stood up 2 years ago, a bipartisan group led by Bill 

Clinton’s Secretary of Defense and George W. Bush’s National Security Advisor. I know you know their report and findings very 

well. That group found that the military would need to shift its emphasis and focus to the Asia-Pacific. And one of the things recommended as part of a broader portfolio of force structure recommendations, was a Navy roughly the size of 346 ships. 

Now, obviously the panel understood the resource constraints 2 

years ago, which has only grown significantly since then. But this 

is something that has been a priority for the Department and the 

direction that they have needed to head for a while. Strategically 

it makes sense. Budgetarily, the two are at complete odds with 

each other. The goals of the strategy and the budget dollars, including the 30-year shipbuilding plan, simply don’t match or add 

up. 

The Secretary of Defense was called to the White House to brief 

the President’s National Security Advisor, Tom Donilon, on that 

very fact before the budget hit the Hill, basically saying this budget 

shrinks the Navy and the Air Force and yet we are going to pivot 

to Asia. There is an internal inconsistency in the two documents 

and I understand the resource constraints, again, the Department 

is under. 

This week the Air, Sea and Space Conference has highlighted a 

lot of the things that are on your minds here today and the ongoing 

lens through which we are talking about a lot of these challenges. 

It was telling when a panel of Navy, Marine Corps, and Coast 

Guard officials were asked the question: if there was one more free 

dollar floating around Washington—pretend—we are going to go to 

the land of pretend for a moment—where would you spend it? And 

the overwhelming responses were that they would spend it on 

maintenance, deferred and unfunded maintenance, primarily ships 

and aircraft. And of course no committee knows better than the 

House Armed Services Committee the Navy’s readiness challenges 

over the last 5 years. They have certainly put in an effort, but this 
9 

gets right at the assumption in the 30-year shipbuilding plan of 

rosy and optimistic service life assumptions as found in this plan. 

So for example, if you look at the plan and it says we are going 

to keep cruisers in the service for 35 years and destroyers for 40 

years, but you look at the Navy’s budget this year, we are retiring 

cruisers 15 years before the ends of their service life because there 

is not enough money to modernize them for the ballistic missile defense mission, in this case for those seven cruisers, one actually 

that was grounded and should be retired. 

So again reality is that we are keeping cruisers in service roughly 20 years. The assumption behind the plan is that it is 35. So reality is going to hit this plan as well, which brings it to its logical 

conclusion that even the 298-ship Navy may never become a reality, the one that has certainly shrunk. 

As the Department pivots to Asia, to a region that is defined by 

its tyranny of distances as stated by previous Pacific Command 

commanders, so you only exacerbate the wear and tear on a fleet 

already stressed incredibly, and maintenance that is not fully funded. So you have a fleet that will be smaller as a result of this plan, 

that will be older as a result of this plan, and whose maintenance 

bills will continue to rise. 

You might recall a couple of months ago the USS Essex had to 

sit out its participation in the military exercise. That is the second 

time that happened, and it was due to equipment malfunctions and 

failures onboard the ship. This is not an isolated example across 

the Navy and we will see more of this going forward. 

The assumptions behind the 30-year plan are flawed because the 

assumptions behind the January Strategic Guidance are flawed. It 

assumes that limited conflict is the only type of operations that the 

military will be involved in over the next 10 years. The war plans 

are changing at the Department from long stabilization operations, 

for example, to short-duration, high-intensity scenarios with Iran 

and North Korea. It presupposes basically a more stable world. Yet 

the Chiefs have told you repeatedly that the risks and threats and 

challenges facing the Department are only growing. If you look at 

what we have asked the military to do the last 10 years, it is only 

growing, and that is not exclusive to Iraq and Afghanistan. 

So I would close by saying some of my concerns, aside from these 

assumptions, that are throughout the Department of Defense, not 

just the Department of the Navy’s plans, are that the Virginia 

class submarine slipped specifically from fiscal year 2014 to fiscal 

year 2018, as I was told by the Navy was pure BCA-driven. That 

was just a Budget Control Act decision. When the top-line numbers 

came down, it was not linked to the strategy, the pivot to Asia. For 

example, that is concerning to me and I am sure to you. 

Something my colleague Ron O’Rourke highlighted in his testimony, it is unclear what this new extension of carrier construction 

means. You recall in the 2010 budget request President Obama 

asked to slip carrier construction from 4 to 5 years. Excuse me, 

that might have been 2011. This may slip it from 5 now to 6, possibly 7. The industrial base, particularly the suppliers and vendors 

to our carrier yards, have already started talking pretty loudly 

about what this will cause: inefficiencies. It is going to grow the 

cost to the taxpayer because they are going to charge the shipyard 
10 

more. Supplier layoffs. Some of them will exit the business altogether, not to return. And a longer learning curve when the workers come back, if there is this delay. 

And then, of course finally, the promise that the check is in the 

mail. The assumptions behind this plan are that the Navy’s funding—and Ron referenced this—will grow in the second FYDP. Fiscal year 2018 through 2022; that then they will get these additional SCN [Shipbuilding and Conversion, Navy] dollars to meet all 

of the priorities for the bulge in spending that is going to be required to actually make this plan a reality. That is a trick as old 

as the future years defense plan. We all know that anything beyond the current fiscal year is Monopoly money, and I am very concerned about the Navy resting all of its eggs in this basket and 

hope and promise of additional funds in the future. 

Thank you, I look forward to your questions. 

[The prepared statement of Ms. Eaglen can be found in the Appendix on page 62.] 

Mr. WITTMAN. Thank you, Ms. Eaglen. I appreciate that. 

I am going to make some very brief remarks so we can get 

straight into questioning. I think the perspectives that you all provide are extraordinarily valuable. The reason behind this hearing 

is to look at where we have gone recently; and I say recently, within the past 5 years, in the broadening differential between planning and what actually happens in decisionmaking here in Congress. And I think there is some building concern about making 

sure that planning is a more vigorous process that tries to reflect 

the reality of what we have to deal with. 

Now, as has been said before, it is very difficult to predict the 

future. And I don’t think anybody has an unrealistic expectation 

about what planning does as far as predicting with accuracy the future. I think the critical part, though, of planning is to make sure 

it encompasses contingencies and encompasses flexibility, whereas 

we know those challenges change. And who would have, 11 years 

ago, thought about the asymmetric threat and how the military has 

been repositioned? 

And so as somebody had said in the past, one thing for sure is 

that as far as the predictive capability of planning is that we always get it wrong as far as what to expect in the future. But that 

doesn’t mean, though, that the planning process itself shouldn’t be 

vigorous and shouldn’t try as best it can to reflect the scope, not 

only in the short term but also in the long term. 

And I think that is a big question that we need to ask ourselves; 

that is, are we being vigorous in that process? Are we asking ourselves the difficult questions? Are we making sure that as we make 

decisions, we keep in mind not only the short term but the long 

term, and as best we can provide the ability for ourselves to be able 

to address the threats that are out there. Granted that they will 

change, but we do know with some certainty based on history 

where those threats are. We do know also through history, too, that 

the unexpected comes up and that we want to make sure within 

those plans that there is some contingency there. 

So I appreciate you all’s perspective. I think you bring that up 

in a very cogent way and in a very direct way for all of us to con-
11 

sider as we make these decisions. So with that, I am going to turn 

to Mr. Cooper for his time of questioning. 

Mr. COOPER. Thank you, Mr. Chairman. I appreciate the witnesses’ testimony. All the witnesses seem to be agreed that we 

need more ships. I would like to ask each of you how we pay for 

that. Mr. O’Rourke. 

Mr. O’ROURKE. The affordability challenge for Navy shipbuilding 

is present not just in this 30-year plan but in plans going back several years. The Navy is proposing to pay for that through an increase in the shipbuilding funding profile through the middle years 

of the plan. 

One potential oversight question for Congress is the extent to 

which the Navy has received promises or assurances or commitments of some kind from OSD [Office of the Secretary of Defense] 

that that funding hump will be realized. It shows in the 30-year 

plan, but there aren’t any statements in the 30-year plan from the 

Navy about the basis for their confidence that that hump in funding will be realized. So I think that is an issue for the Congress 

to pursue potentially as an oversight question in relation to this 

plan. 

Mr. COOPER. Dr. Cropsey. 

Dr. CROPSEY. Well, one way would be to adhere more closely to 

good business practices. Try to bring down the cost of ships. Fixedprice contracts have proven that usefulness in the past. The Navy 

has tried to do that with some success for the littoral combat ship. 

Another is dual sourcing. That also has proven in the past to reduce the cost of ships. Imposing cost discipline, encouraging the 

Navy to impose cost discipline as ships are being constructed would 

help. I think it would also be a great encouragement for the Defense Department and for the military in general to consider, instead of an equal distribution of resources, a strategic distribution 

of resources. And I think that that would favor American seapower 

right now, because among other things, of the pivot to Asia. Asia 

is a maritime theater. 

I don’t think anything is more important, though, than an understanding of what our priorities, what our strategic priorities as a 

nation are. And if those strategic priorities are expressed in dividing the pain equally wherever there is pain, then we are going to 

run into trouble. If they are divided according to some idea of what 

our strategic requirements are, I think that a combination of doing 

business better, reforming to a certain extent the way the Navy 

does business, imposing more discipline and strategic considerations would produce the money. 

Mr. COOPER. Ms. Eaglen. 

Ms. EAGLEN. This is a topic about which I have given great 

thought and written about. A lot of the money that can be saved 

in the Department is not in the procurement account. It is structural changes that are required. More things along the lines of the 

efficiency drills that the Department has been under in recent 

years. Examples include, for example, performance-based logistics, 

where you have public-private partnerships in the maintenance of 

systems and platforms. That brings down the cost of working with 

depots and the companies that built these systems in the first 

place. 
12 

I think another thing we need to do is be honest about what 

stretching out programs does to the cost. For example, take the 

Joint Strike Fighter program as part of the 2013 budget request. 

The overall buy was not cut, but a lot of the planes were shifted 

into the outyears. The Pentagon said this morning that costs $6 billion. That is not a savings, that is a cost. But it was done in order 

to meet a budget target of savings. 

And so until and unless we are honest about what does stretching out of these programs, including carriers, is really doing to the 

cost of them by making them actually rise over time, it is hard to 

see how we can have the next part of that conversation. I support 

multiyear procurement and block-buys whenever possible, and Congress has been excellent about that, and this committee in particular in the shipbuilding realm. I know that this is an area that 

the Navy—in fact, I think the Navy is in decent acquisition shape. 

The plan, of course the numbers are too low, but I think in terms 

of execution, things are going pretty well for the Navy, particularly 

relative to the other services’ acquisition failures of late. 

Finally, I think you need to look internal to the entire Department of Defense before you ever come to Congress and ask for an 

additional dollar. That is something that the QDR [Quadrennial 

Defense Review] independent panel also found. The simple fact remains that 50 percent of the entire defense budget is people. The 

2013 budget proposes laying off 100,000 Active Duty service members, but it leaves untouched 750,000 Defense civilians. I think 

that is a workforce ripe for reduction and some savings there. 

Mr. COOPER. Thank you, Mr. Chairman. I see that my time has 

expired. 

Mr. WITTMAN. Thank you, Mr. Cooper. Mr. Brooks. 

Mr. BROOKS. Thank you, Mr. Chairman. As you know, we face 

some very serious financial difficulties. We have got the Budget 

Control Act. We have sequestration. House Armed Services Committee staffers have put together some different scenarios that we 

face with sequestration, and then we also have the White House 

position. 

Some examples with sequestration, on the one hand, we would 

have a reduction in force of 100,000 uniformed personnel, 100,000 

DOD [Department of Defense] civilian support workers, a half-million private sector contract support workers for national defense, 

totaling 700,000 lost jobs. That is one scenario that has been put 

together by the House Armed Services Committee staff. 

Another scenario is where we mothball one, maybe two, carrier 

battle groups, one or two of our submarines, 10 to 30 percent of our 

fighter and strategic bomber capabilities, we would reduce our 

rapid response capabilities by 20 percent. That is another possible 

scenario if sequestration takes hold January 1, 2013, as is required 

by the Budget Control Act. 

Then we have the White House position. On the one hand we 

have Secretary of Defense Leon Panetta publicly stating that sequestration would be disastrous. We have got one of the members 

of the Joint Chiefs testifying before the Senate that it would be the 

equivalent of a Pentagon shutdown. 

But on the other hand we have the President of the United 

States saying that he is going to veto any constructive measures 
13 

to change the Budget Control Act sequestration provisions. Then 

you have got the possible effect before the House Armed Services 

Committee where the White House spokesmen testify that their 

scenario is that we would cut anywhere from 8 to 9 percent or, on 

the low side, or high side, 12, 13, 14 percent out of every single existing contract that the Department of Defense has with anyone, 

which would be hundreds of thousands of contracts that would be 

terminated for the convenience of the government or they would 

have to be renegotiated. 

In that kind of context, how do you see sequestration if it holds 

true, and it is supposed to hit us in 81⁄2 months, impacting the information that you shared with us about shipbuilding? 

Mr. O’ROURKE. There are a couple of points that I can raise in 

connection with that. One has to do with how sequestration is applied—and I know that you are aware that there are discussions 

on exactly how that law would be applied—and whether you would 

do it as a straight percentage at the program, project, and activity 

level, or whether you do it at a higher account level, and whether 

the Department takes advantage of the 1990 amendment that allows a reallocation of the defense budget prior to the imposition of 

sequestration. 

So when you look at those variables, there are different ways 

that sequestration might be applied. If it is applied at the program, 

project, and activity level and it is a straight arithmetic application, then the shipbuilding budget is particularly vulnerable to program disruption because it is laid out in the DOD appropriations 

bill at the line-item level, at the level of individual shipbuilding 

programs. That is not true of the other procurement accounts in 

the DOD appropriations bill. 

And so you do get into a problem of not being able to build threequarters of a ship. In that sense, if you apply sequestration at that 

level, the shipbuilding budget is more vulnerable programmatically 

to this way of applying sequestration than are other parts of the 

DOD appropriation account. 

The other part of the answer I want to give you is that at the 

general level of cost calculation, my counterpart at CBO [Congressional Budget Office], Eric Labs, ran the numbers and he estimated 

a few months ago that if you were to apply sequestration generally 

across the Department, where the Navy gets a proportionate share 

and the shipbuilding budget gets a proportionate share of that, 

that we would lose 18 to 24 ships over the 10-year period. So you 

can round that off and say it is 20 ships or 2 ships per year, and 

that this would be the hit to the shipbuilding budget. 

That is another way of looking at it, and then what you have to 

then decide is what exactly is going to be the method for applying 

sequestration and whether it will be at this general level or whether it will be at the program, project, and activity level where it can 

cause particular disruption to individual shipbuilding programs. 

Mr. BROOKS. Ms. Eaglen or Dr. Cropsey, do you have anything 

else to add? 

Dr. CROPSEY. Sure. Go ahead. 

Ms. EAGLEN. Ron did a great job outlining it. I would just say 

one thing from the perspective of shipbuilders. It is workforce management. They need to plan now for what is going to be—what 
14 

their actual workers are going to do who clock in every day in January. Basically what this means is significant numbers of layoffs, 

and they will do this in the face of the uncertainty, whether or not 

the Department is planning for it, whether or not Congress does 

anything about it between now and the lame duck session, this will 

begin happening, this consolidation and downsizing now. 

Dr. CROPSEY. And I would like to add a point here to what my 

colleague Ron said, and that is that with that impact felt especially 

hard on the shipbuilding accounts, especially on new construction, 

where that decision is made, the effect on the industrial base 

should be considered very carefully because it will have a profound 

effect on the industrial base, which I think 5 years out from now, 

even with the current shipbuilding program in place, is going to 

have a problem. That brings the problem up immediately. 

And as I mentioned—alluded to in my shorter version of the testimony that I gave, we are going to be facing a very severe problem, one which will take years, if ever, to recover from. 

Mr. BROOKS. Thank you, Mr. Chairman. 

Mr. WITTMAN. Thank you, Mr. Brooks. Ms. Hanabusa. 

Ms. HANABUSA. Thank you, Mr. Chairman. I would like to follow 

basically that line. And in one of the codels [congressional delegations] that I took, we went to Nassco which is of course, as you 

know, in San Diego, and one of the—I guess the person who runs 

the institution there said that the Jones Act was extremely critical, 

because of the fact that what we cannot rely upon is for the defense 

industry to be the shipbuilder and the only customer, and that in 

fact you need the commercial intervention to come in, especially 

when we have those dips. 

And I think that was along the lines about workforce, that if we 

dip too low we are going to lose that critical mass, and we have 

already lost a lot of that talent pool. And as a result, we are going 

to even fall further down in terms of our ability to build the ships. 

So in that light, Mr. O’Rourke, can you go back about what you 

were saying was the distinction in how the procurement works on 

shipbuilding versus any other form of military expenditure, and 

then whether or not there is a resolution or some way that we can 

fix that? 

Mr. O’ROURKE. It has to do with the format of the DOD, annual 

DOD appropriations bill. And if you look at the actual language of 

the law, you will see that most of the accounts are appropriated at 

the full account level. The exception to that within the procurement 

title of the DOD Appropriations Act is the paragraph that appropriates funds for shipbuilding. That paragraph is structured to call 

out funding levels for individual shipbuilding programs. 

So if the sequestration law is applied at the individual program, 

project, and activity level, the PPA level, then you can run into a 

scenario in which each of those programs gets their funding shaved 

by whatever the arithmetic percentage is, and you can get into 

multiple situations of not being able to build three-quarters, or 

four-fifths, or nine-tenths of a ship. 

The fix to that potentially is a 1990, if I recall, amendment to 

the sequestration law which allows the Defense Department to propose a reallocation of the defense budget prior to the imposition of 

sequestration. That is a proposal that the executive branch would 
15 

make to Congress, and Congress would have the choice of whether 

to approve it or not. 

If DOD took advantage of that authority—and there is some 

question as to whether they can or not under the BCA—but if it 

is judged that they can, and if the executive branch then chooses 

to in fact do so, they could restructure the allocation of spending 

within the defense budget in a way that could reduce the disruptions to individual shipbuilding programs, probably by bumping up 

the funding for some shipbuilding programs and perhaps sacrificing 

entire ships in other shipbuilding programs so that you don’t run 

into a situation where all the programs are disrupted by being 

shaved across the board. 

Ms. HANABUSA. So if I am understanding you correctly, the 

uniqueness of the shipbuilding program is that we allocate by a 

particular ship, and that when we cut in sequestration, for example, across the board, all of those ships would not have enough 

funds to actually go forward, because they would not go forward 

unless the full funding is there, because they would have to take 

the risk that the full funding would not be there. And we do not 

afford in the shipbuilding line item, or whatever way we want to 

refer to it, the ability to shift funds or reallocate at the discretion 

of the military. Am I understanding you correctly? 

Mr. O’ROURKE. I think you are. It has to do with the format, the 

actual language of the law of the DOD Appropriations Act. And 

each year when it is passed, it is only the shipbuilding account, the 

SCN account, that calls out individual programs within the account 

as a routine matter from year to year. 

Ms. HANABUSA. Does anybody know why that became the practice? 

Mr. O’ROURKE. I think that is simply a matter of tradition of how 

the format of the DOD appropriations bill has evolved down 

through the decades. 

Ms. HANABUSA. But is there any specific reason why just shipbuilding was given that privilege of not being able to be shifted in 

any way? 

Mr. O’ROURKE. There may have been such a reason originally, 

but I am not aware of what it would be. 

Ms. HANABUSA. Have we ever seen this kind of potential threat 

to shipbuilding in recent history? 

Mr. O’ROURKE. There was a sequestration scenario that was investigated during the time of the multiple continuing resolutions 

[CRs] a year or two ago, and we ran into exactly this situation 

where there was about a 1- or $2 billion shortfall in shipbuilding, 

but the funds from the prior year that might carry through in the 

CR were not properly aligned with the individual programs for the 

next year. And the misalignment was actually between 5- and $6 

billion, even though the total account difference was only 1- to $2 

billion. 

Ms. HANABUSA. Thank you. Thank you, Mr. Chairman. 

Mr. WITTMAN. Thank you, Ms. Hanabusa. Mr. Conaway. 

Mr. CONAWAY. Thank you, Mr. Chairman. Thank you all for 

being here. 

I want to chase a bit of a rabbit from shipbuilding to talk about 

the Navy’s use of resources with respect to the energy they con-
16 

sume. In a recent letter to me and the full committee, after some 

questions we had with Secretary Mabus, he said that the Navy’s 

energy program is to source a competitively priced and domestically produced liquid fuel that could be dropped in as a replacement to diesel aviation gas. I queried his Assistant Secretary of the 

Navy for Energy as to why, if that was the case, if it is simply liquid fuel domestically sourced, wouldn’t they embrace a removal of 

the restraints they have under section 526 of the energy bill which 

prevents the Navy from buying that gas? And she emphatically 

said no, they wouldn’t. And I asked, well, is this a green agenda 

or an agenda to provide fuel? She said no, no, no, it is not a green 

agenda. 

So given that we have studies that show coal-to-liquids, coal biomass-to-liquids, at prices of crude oil that are below where crude 

oil is currently today are competitively priced, they are not domestically available. 

I guess, Ms. Eaglen, why would the Navy not stick to their guns 

in talking about competitively priced, domestically sourced fuel and 

not embrace coal-to-liquids or coal biomass-to-liquids under that 

rubric or under that definition? Any thoughts? Ms. Eaglen. 

Ms. EAGLEN. I think that you raise a very fair question. I know 

that the Department of Defense obviously is the largest consumer 

of oil and anytime there are fluctuations in the price of oil that 

they feel—and you usually receive the reprogramming requests 

pretty rapidly to deal with it. So I understand the general policy 

goal for the Department to become less reliant or allow their systems to operate under alternate or hybrid fuels. I think that is a 

worthy goal. 

I will say that the Department of Defense is spending significant 

amounts of resources on its energy agenda across the services, and 

the Navy of course I think is out front on this effort, more so I believe than any other Federal agency. As the Department is grappling with its third year of funding cuts, I think that this is a priority set that should be questioned by you for the Department. 

Mr. O’ROURKE. Just very quickly I would note that colleagues of 

mine at CRS are right now preparing a report on DOD energy initiatives, including among other things the Navy’s initiatives in the 

biofuel area. And we will take that question back to them and attempt as best as we can to address that as part of our process for 

preparing that report. 

Mr. CONAWAY. Thank you, Mr. O’Rourke. I look forward to getting that. 

It seems that this whole effort began in 2007 under Speaker 

Pelosi’s tutelage and has exacerbated under the President currently. I have asked repeatedly the question: Shouldn’t the taxpayer be able to decide for themselves what the value is? Give us 

the differential between what you would spend if all you were 

doing is trying to move stuff from point A to point B, versus what 

you are spending now on all these initiatives to do things that the 

Department of Energy may be better suited to develop and those 

kinds of things. 

Now I understand their logic, and this is their favorite: They trot 

out, well, if we avoid hauling diesel across Afghanistan we put our 

folks at less risk. I get it and if that is what you are doing, great. 
17 

Keep it up. But we have got about 3- or $400 million a year in research that we put at that issue, which is dwarfed by all the other 

things they are doing. 

So if it is mission-critical, I get that. But much of what they are 

doing is not. Including this rim of the Pacific exercise in which Secretary Mabus bought 400,000 gallons of aviation fuel at 16 bucks 

a gallon versus a $4 a gallon regular, because it is green and his 

F–18s can be tagged with the moniker of Green Hornet. And I 

asked the Secretary, I said, well since you spent four times as 

much money as you would have otherwise spent, will you fly a 

fourth of the amount of hours in order to keep your fuel budget the 

same? He said no, no, no, we will fly the same number of hours. 

I said, you are going to spread the load of this nonsense across the 

entire fleet. And he said, well, it is only a little bit of money. And 

I said, well, Mr. Secretary, Scripture says if you are faithful in the 

little bits, you will be faithful in a lot of big things. We have entrusted you with a lot of big things and it is disconcerting for you 

to tell me 8 million bucks extra on fuel just to wave a green flag 

in these days when we are short resources across the entire system; you just sat here and spent an hour almost, or plus, telling 

us that the Navy is short of resources, whether it is maintenance 

or shipbuilding or whatever it might be, and yet we are squandering precious dollars on initiatives that ought to be done somewhere else in the Federal Government and are not a core competency of our Department of Defense. 

So, Mr. O’Rourke, I appreciate your study at CRS. 

Mr. O’ROURKE. I can tell you that one objective of that study will 

be to try to sort out the rationalizations that have been offered, the 

justifications that have been offered for the various DOD energy 

initiatives so that you can try to plot the initiative against the particular justification that has been offered. Because it is a potentially pretty complex matrix where some initiatives have been justified and some—— 

Mr. CONAWAY. Will that include cost differentials as well? Will 

the study include cost differentials as well? 

Mr. O’ROURKE. We are going to try and present as much data as 

we can find. 

Dr. CROPSEY. I think that is one of the problems. That is the 

problem that I have seen. I have seen the statements by the Secretary of the Navy that there are these alternatives out there, and 

algae and so on and so forth, and I have asked and asked people 

who should know: Do these alternatives exist and what do they 

cost? There is no—I haven’t seen a convincing answer from the 

Navy. The answers that I have seen from people who are supposed 

to know about this is yes, you can do it, but it costs X times as 

much. I am looking forward to this study also. 

Mr. CONAWAY. Thank you, Mr. Chairman. Thank you, folks. 

Mr. WITTMAN. Thank you Mr. Conaway. 

I want to wrap up with just a general scope question in looking 

at the whole decisionmaking process. As I stated earlier, what concerns me is looking at the process historically, whether it is the 

Quadrennial Defense Review, which I know each of you have been 

involved in and have been very analytical in your approach to that, 

or the 30-year shipbuilding plan, it seems as though as we go 
18 

through the years, there is more and more separation from a planning process and then the ultimate decisionmaking process, and 

that we get much more myopic in scope in how decisions are being 

made. And I realize some of that is out of necessity with the immediate urgency of budget decisions. But I also realize, too, that if we 

get so myopic in addressing the urgency of the immediate, we lose 

focus on the long term. And as you all have pointed out, there is 

expense related to that, there is strategic weakness associated with 

that. 

And I want to get each of your perspective about how do we then, 

in this environment, how do we restructure the planning process 

so that those long-term impacts are more apparent and are more 

in the forefront when decisions are being made? And I say that because the QDR seems to become a document that really isn’t as 

useful as it needs to be, as well as the 30-year shipbuilding plan. 

How do we address the planning process? Or is there a way to 

address the planning process so that it is more reflective not only 

of the short term, but of the long term, to make sure that the decisions that we are making are truly in our best long-term interest. 

I would argue that if we are not doing that, that we really, as you 

all have pointed out, placed this country in a strategic quandary, 

in many instances a strategic position of longer-term weakness of 

which we may not be able to pull ourselves out of. Mr. O’Rourke 

I will begin with you. 

Mr. O’ROURKE. I will give a two-part answer. The first part is 

that the fact that we do have a requirement for an annual 30-year 

plan does provide a tool that allows long-term visibility, especially 

into the question of whether we are pushing off large investments 

into the future and building up what might be an insurmountable 

investment burden in the future. There are other branches of military planning that do not have the benefit of that. 

So in one sense, shipbuilding has a tool available to it to support 

congressional oversight that other parts of defense procurement do 

not. There is also a 30-year aviation plan but it is structured a little bit differently. But many parts of DOD procurement don’t have 

that at all. 

So on the one hand, we do have a tool. One way to improve the 

usability of the tool is to ensure, for example, that it is submitted 

in a timely manner. As you know, the law requires the 30-year 

shipbuilding plan to be submitted as part of the defense budget 

materials each year, meaning along with the submission of the 

budget itself, which occurred on February 13th of this year. The 30- 

year plan this year was submitted on March 28th, which was the 

eve of the Seapower Subcommittee’s oversight hearing on shipbuilding that was held on March 29th. So there was almost no opportunity for that subcommittee, or for the committee as a whole, 

to review the details of the 30-year shipbuilding plan prior to the 

hearing that was being held as the principal mechanism for investigating the details of that plan and asking and hearing answers 

to oversight questions. 

So one way in which the process can be improved would be to 

encourage DOD as much as possible to submit that plan in a timely manner in accordance with 10 U.S.C. 231. And in a parallel way, 

you can ask the same thing or perhaps encourage, again, the execu-
19 

tive branch to submit the annual report on security and military 

developments relating to China in a timely way. That is supposed 

to be submitted I think at the beginning of March, and for the past 

2 years in a row it has been submitted in August, after the markups have occurred and the spring oversight and budget review 

hearings have occurred. 

The purpose of that report, like the 30-year plan, is to support 

congressional oversight and review of that year’s budget proposal. 

Now if you submit that in August, you have missed all of those activities and you are 6 months out of cycle. And right now we do 

not have the annual report on security developments relating to 

China. So that report is also overdue, and I have no idea when it 

is going to be submitted. 

Mr. WITTMAN. Ms. Eaglen. 

Ms. EAGLEN. It is a great question, and I know it is a concern 

of yours and mine. And I agree with Ron about the tools. Last year 

I advocated for continuing to ask for the 30-year shipbuilding and 

aviation plans because precisely you can walk back into the problems and you can identify the challenges. 

There are two things I would add to Ron’s answer. The first is 

that implicit behind this 30-year plan as well as the new defense 

strategy—hard to call it that, it was only eight pages—but implicit 

behind that, and we heard the chiefs testify in the posture hearings, the force will absorb more risks. That means a whole lot of 

things. As I already referenced, that means the war plans are 

changing, the response time, the mobilization rate, the readiness of 

units stateside versus those deploying, increased casualties, all of 

these things are part of increased risk. It has so many facets and 

so many angles. It is on an individual level and it is on a unit level 

and it is on a system level. It is across the force. 

Congress does not have a clear understanding of what this 

means, but it is the Department’s favorite solution to meeting 

budget cuts. So I would argue that this committee should take the 

lead in pushing for some version, some type of unclassified risk assessment. I know that the chairman does his. It is classified and 

it is not helpful to anybody in this town to understanding what you 

are signing up for when you agree to the President’s budget in 

most of its form. 

Then something else, I think, sort of the long term, to understand better in the long term. I am not one for adding more plans 

without taking a few away that are unnecessary. So I will put that 

out up front. But alongside the shipbuilding and aviation plans, 

there should be some type of discussion or annex with a long-term 

technology road map, R&D [research and development] and S&T 

[science and technology] focused, where we can understand linking 

things like the air and sea battle concepts to these kinds of number 

plans but also to future investments. 

When is the Navy going to bring back that NextGen surface combatant? It dropped out a few years ago, never to be heard from 

again, but we know they need one. They need to be talking about 

it. We know there needs to be a follow-on, some type of fighter 

after the Joint Strike Fighter, whether it is manned or unmanned. 

We know that we need a new rotary-wing aircraft, not upgrades to 

the current system, satellite—next generation PGMs [precision- 
20 

guided munitions] and other weapons systems. All of these things 

need to be put together holistically alongside these numbers plans 

so you understand broadly the investment portfolio and priorities 

of the Department. 

Mr. WITTMAN. Dr. Cropsey, if we can do that, we have got about 

a minute 47 left in the vote. So I am going to have to scoot on out 

of here. But I wanted to make sure I give you an opportunity. 

Dr. CROPSEY. Thank you, sir. The 30-year shipbuilding plan is 

not a strategy. It is a way of implementing a larger strategy. I 

think your question goes to a very broad issue, and that is, what 

is the national strategy? And the way that that has been addressed 

in the past is that Congress says we want a document, and the document that you get says the administration—not this, not the preceding, all of them, going back let’s say to the Eisenhower administration—say we want this, this, this, this, and this. And then how 

are we going to get there? Well, that part is in some other document which we have never read. 

The recently left Under Secretary of Defense for Policy, Miche`le 

Flournoy, wrote a good paper several years ago about President Eisenhower’s Solarium project. You are familiar with that. The Solarium project is I think an excellent model of how you go about 

crafting a national strategy that has an effect on the budget, on our 

plans, on the Defense Department. I think it is a commendable 

one. I think it should be imitated. If the President himself or herself takes direct interest in that strategy and direct interest in implementing it, then I think you start to have an effect. 

And I think that the way that Congress has influence over that 

is by asking officials who you speak with: What is the strategy and 

how are you going to accomplish it? Not by saying, we need a document. 

Mr. WITTMAN. I think that is a good point to make sure there 

is closure there, not just the strategy itself, but how do you hope 

to accomplish that and maybe have a little longer-term perspective 

in how that comes to be. 

Witnesses, thank you so much. Mr. O’Rourke, Ms. Eaglen, Dr. 

Cropsey, thank you all so much for spending time with us today 

to give us your insight. As you can imagine, very challenging issues 

before us to try to make sure planning reflects some semblance of 

reality in a very challenging budget time. So for us to help navigate 

that and get your perspective is very, very helpful. So, again, thank 

you so much for spending your time with us today. I look forward 

to continued conversations. 

Also if you have thoughts or ideas after this hearing, please feel 

free to share those with us. We will make sure that as we pursue 

this hearing process, we want to make sure we give the widest perspective possible on that. So again, we want to encourage your 

comments, too, as this process moves along as we finish these hearings. 

Thank you all again. The Subcommittee on Oversight and Investigations is now adjourned. 

[Whereupon, at 4:05 p.m., the subcommittee was adjourned.] 
A P P E N D I X 

APRIL 18, 2012 

PREPARED STATEMENTS SUBMITTED FOR THE RECORD 

APRIL 18, 2012 

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Æ