# Senate Appropriations Subcommittee on Defense Holds Hearing on Fiscal Year 2024 Budget Request for Navy and Marine Corps

#### WASHINGTON

[Begins in progress] committee meeting to order. Good morning. I want to welcome our witnesses Secretary Del Tora, Admiral Gilday, General Berger. Thank you for your service to our nation and thank you for leading the Navy and the Marine Corps. I look forward to discussing your fiscal year 2024 budget priorities today.

The FY 2024 budget request for the Navy and the Marine Corps is $255.8 billion, $11billion more than in fiscal year 2023, and about $32 billion more than fiscal year 2022.This increase sounds robust, but it is irrelevant unless we enact a defense appropriations bill for fiscal year 2024. Our key priority this year must be to get the budget done on time.

Continuing resolutions kill military modernization and cause billions in wasteful spending and it is no secret that the Chinese don't operate under continuing resolutions. I am encouraged by the work by Chair Murray and Vice Chair Collins have already put in to restore regular order to the Appropriations Committee.

Their commitment to writing bipartisan appropriations bill that addresses the critical challenges facing our nation have my full-throated support. This budget request represents continuity from last year's budget by furthering implementing the National Defense Strategy and it reinforces what we already know.

Despite Russia's ongoing unjust war in Ukraine, China remains our number one pacing threat. We must continue to modernize our military to stay ahead of that threat. The Navy and Marine Corps play an important role in defending our national and economic security by providing unparalleled maritime capabilities.

Every week, Senator Collins and I hear from commanders in the field about the varying threats facing our nation. So the question I have is are we spending taxpayer dollars on the right things. We look forward to hearing from you on where we've made progress in what challenges remain. And once again, I want to thank each one of you for your service to our country.

Before you make your opening statements, I want to turn it over to Senator Collins for her opening statement.

SUSAN COLLINS:

Thank you very much, Mr. Chairman. It's been a great pleasure to work with you as we proceed as the chair and vice chair of this very important subcommittee. I want to echo the chairman's thank you to each of our witnesses for your service. It is greatly appreciated, and I would ask that you also pass on our gratitude to the sailors and Marines that you represent.

I also want to recognize the department's many civilians and their industry partners who build and maintain the ships, aircraft, and munitions that sustain the Navy and the Marine Corps. They make invaluable contributions, and I'm personally proud that so many Mainers have chosen to serve their country in these capacities such as by working at Bath Ironworks, the Portsmouth Naval Shipyard, and the Naval Computer, and Telecommunications Center in Cutler, Maine.

The administration's 2022 National Defense Strategy accurately describes the accelerating threat of China as the chairman has indicated and its unprecedented military modernization. However, in my judgment, the administration's budget request does not fully reflect the challenges identified in its own national defense strategy.

For example, the president's budget request would result in a fleet of 291 ships at the end of the next five years. That is smaller than today's fleet of 296 ships and significantly smaller than the Navy's own requirement of 373 ships. I'm also concerned with the contrast to the more than 440 ships that China is expected to have by the year 2030. The budget requests also inadequately accounts for the impact of inflation, investment and readiness accounts.

The Navy's proposed budget increase of 4.5 percent, which includes the Marine Corps 2.6percent increase would likely provide less buying power than the fiscal year '23 enacted budget after accounting for inflation. For example, the budget request assumes a fuel price of $140 per barrel. Yet on the very day that the budget was rolled out, fuel was $169 per barrel.

That's 20 percent more than budgeted. Why does this matter? It matters because the Department of Navy consumes roughly 24 million barrels of fuel each year and each $1 per barrel increase carries a $24 million cost. At $29 per barrel below current rates, this budget would equate to a $700 million unfunded cost just for the Department of the Navy.

It's no surprise that Admiral Gilday and General Berger's unfunded priorities, which highlights some of the shortfalls of this budget, totaled $5.7 billion. With that backdrop, Navy leadership deserves credit for redoubling its commitment to ship maintenance. This is evidenced by the $1.8 billion increase for ship repair and the continued full funding for the Shipyard Infrastructure Optimization Plan at the Navy's four public shipyards, including the Portsmouth Navy Shipyard in Kittery, Maine.

These investments are critical to keeping a greater portion of the Navy's fleet available for operations. I also want to commend the Navy for pursuing a record number of multi-year procurement contracts for munitions this year. Ukraine's war has taught us that we must transition from just in time stockpiles of weapons and munitions to just in case stockpiles.

If implemented well, these multiyear contracts will provide industry with the certainty necessary to make that transition a reality and deliver cost savings for the taxpayers at the same time and help with workforce challenges. I look forward to discussing all of these issues with our distinguished witnesses today.

Thank you, Mr. Chairman.

JON TESTER:

Thank you, Senator Collins. You'll each be given five minutes for your presentation. Know that your full written testimony will be a part of the record and we'll start with you, Secretaries Toro.

CARLOS DEL TORO:

Thank you, Mr. Chairman. Chairman Tester, Ranking Member Collins, distinguished members of the committee, it's an honor to appear before you alongside General Berger and Admiral Gilday to discuss the posture of the Department of the Navy. Today, our nation faces challenges in every region and domain we operate in from the seabed to the stars.

We recognize the People's Republic of China as our pacing threat. Executing a strategy aimed at upending international order. To preserve our way of life The National Defense Strategy calls upon the joint force to deter aggression while being prepared to prevail in conflict. A strong Navy and Marine Corps are the foundation upon which the success of the joint force exists.

The president's 2024 budget sends a strong signal to the American people of the value of President Biden and Secretary Austin and myself place in maintaining a robust Navy and Marine Corps team to confront the threats that we face. This year's budget request supports our three enduring priorities: strengthening maritime dominance, building a culture of warfighting excellence, and enhancing our strategic partnerships around the globe.

With your support over the past year, we have made major strides to modernize our fleet and our force. 2022 saw the first deployment of the aircraft carrier USS Gerald R. Ford, providing the Navy with lessons learned that will benefit future Ford-class carriers. With the support of our partners in Congress, we are proud of field capable aircraft carriers as part of our fleet with a lower service life cost than their Nimitz class predecessors.

Construction of high-end surface combatants continues including the first Constellation-class frigate, USS Constellation and the first of our Arleigh Burke-class flight three destroyers, the USS Jack Lucas, which we are scheduled to commission just this fall. We continue progress in our first Columbia-class ballistic missile submarine, the District of Columbia, while pre-construction activities on the second Columbia-class ballistic missile submarine, the USS Wisconsin, have also begun.

On the innovation front Task Force 59 in Bahrain, continues to test a wide range of uncrewed surface vessels. We look forward to bringing the capabilities that these platforms provide us to additional regions that we operate in around the globe. When we consider the composition of our fleet, we seek to strike a balance between readiness, modernization, and capacity with an immediate emphasis on readiness.

This year, our divestment request includes three amphibious ships and at least two cruisers in poor material condition that offer limited warfighting capability. Our decisions to divestor extend the ship's life are based on a hull-by-hull evaluation. For example, we recently announced the modernization of the destroyer, USS Arleigh Burke DDG-51, to keep it sailing through 2031, five years beyond its estimated service life.

We hope to be able to continue that trend with other ships when possible. We owe it to the American people to be responsible stewards of our taxpayer dollars, as you have stated, Mr. Chairman. Investing in platforms with limited capability conflicts with that responsibility. The Navy and Marine Corps are not just about platforms and systems.

However, our sailors and our Marines are our greatest strength. This year's budget request contains multiple investments to support them and their families with services, benefits, housing, and education. In addition to our commitments to our people, we are reinforcing our relationship with our allies and partners around the globe, including our Ukrainian partners as they defend their sovereignty in response to Russia's illegal and unprovoked invasion.

In the Indo-Pacific, we continue to play a leading role in the AUKUS security partnership. Just this month, President Biden announced the optimal pathway for Australia's acquisition of conventionally armed nuclear-powered fast attack submarines. Our Navy will be critical to this initiative success as we support a very important ally.

In addition to our partnerships abroad, we are also committed to strengthening our relationships here at home with industry. We value your support and recommit our leadership toward defueling and remediating the Red Hill bulk fuel storage facility spill as well. We are committed to doing what it takes to address the concerns of our service members, their families, the people of Hawaii, and all of the communities throughout the US. As I've said before, we build trust one day at a time, one action at a time and we are committed to doing the right thing.

Lastly, I am grateful for the trust that you have placed in me to lead this department. I look forward to discussing how best to support our sailors, our Marines and their families in defense of our nation, and I thank you, sir.

JON TESTER:

Thank you, Secretary Del Toro. Next, we have Admiral Gilday.

MICHAEL M. GILDAY:

Chairman Tester, Vice Chair Collins, distinguished members of the committee, good morning and thank you for the opportunity to appear today with Secretary Del Toro and General Berger. For the past 77 years, the United States Navy has been an anchor of world stability, deterring war, upholding international law, and ensuring access to the seas.

Today, our Navy's role has never been more expansive or consequential. This past year, our Navy Marine Corps team executed more than 22,000 steaming hours and nearly 1 million flying hours. We participated in roughly 100 exercises with allies and partners across the globe. And at this moment, we have nearly 100 ships at sea, reassuring America's allies and partners that we stand to watch alongside them and reminding potential adversaries that we seek to preserve peace.

But we are prepared for any fight. The United States has always been a maritime nation. Top reserve our security and prosperity, America needs a combat credible naval force to protect our interests in peace and to prevail in war, not just today, but for the long run. Our fiscal year 2024 budget request remains consistent with the Navy's enduring priorities.

And to your point, Mr. Chairman, about whether or not the taxpayers -- whether or not we are being consistent for the taxpayers in these investments. We are prioritizing readiness first with an emphasis on the sailors who empower everything that we do, ensuring that we are always combat ready. Next, we are modernizing our capabilities, ensuring that our forces today stay combat ready now and into the future in a rapidly changing world.

Third, we are continuing to build our capacity, ensuring that we have relevant lethal platforms to achieve warfighting advantage with a hybrid fleet of manned and unmanned platforms on above and below the sea. Our budget request reflects the Navy's commitment to deliver and deploy and maintain our fleet.

It fully funds the Columbia-class submarine is -- as the Secretary stated, ensuring the on-time delivery of the most survivable leg of our nation's strategic deterrent triad. It keeps our fleet ready to fight tonight, dedicating the resources necessary to train and to educate resilient sailors that can outthink, that can out decide, and that can outfight any potential adversary.

It funds private and public sector ship maintenance to 100 percent, increasing capacity and retaining highly skilled labor to get our ships back to sea faster, with full magazines and spare parts in their storerooms to be prepared for any contingency. It invests in modernizing our fleet, procuring weapons with range and speed along with integrated systems to improve fleet survivability and a resilient cyber, secure network infrastructure.

And it invests in capable capacity. Building towards a larger distributed hybrid fleet fielding a ready fleet today while modernizing for the future. Our competitors are investing heavily in warfighting capabilities of their own and the oceans we are operating in are growing more lethal and more contested every single day.

Failing to modernize to meet those threats would erode America's maritime superiority at a time when command of the seas will determine the balance of power for the rest of this century. This means we can no longer afford to maintain ships designed for a bygone era, especially at the expense of readiness, modernization, and new platforms, and buying new ships most relevant to today's fight.

America cannot afford a hollow force. We have been there before, and we have seen tragic results. It is a mistake we must never repeat. Ships, submarines, and aircraft are no doubt expensive instruments of national power as are the costs of maintaining them. But history shows that without a powerful navy, the price tag could be much higher.

Thank you again for inviting me to testify and I look forward to answering your questions.

JON TESTER:

Thank you, Admiral Gilday. Next up we've got General Berger.

DAVID H. BERGER:

[Off-mic] Thank you. Three years ago, [Off-mic] the change -- rapid change was required to meet our statutory missions and the mandates of the National Defense Strategy. And with the bipartisan help of this committee and the support of my civilian leadership in the Pentagon, the Marine Corps force design is no longer a future aim point, it is today.

It's a reality and in INDOPACOM, for example, Task Force 76.3 creating advanced information webs to support maritime awareness. They took what they learned in experimentation and turned it into kill webs during exercise in the Philippines and in Japan earlier this spring, right in the Chinese backyard. And a EUCOM task force 61.2 found ways to create greater air and maritime domain awareness for the six-fleet focusing on Russian naval and air activities.

In CENTCOM General Carola has Marine Corps MQ-9s, providing persistent ISR that he needs to monitor the key maritime terrain. Next month our new Marine Littoral Regiment, third MLR will demonstrate some of its newest sensing and lethal capabilities in the Philippines during an exercise called Balikatan, right alongside our allies and partners.

And in January of this year, a couple of months ago, Japan agreed to host our second Marine Littoral Regiment, which is 12th MLR, that will be forward in the first island chain where persistent Marine Corps presence matters most. So, in short, your Marines are where it matters most today just as they always have been.

Three years ago, I described how the Marine Corps would not just modernize quickly, but we would self-fund those changes we had to make. We would get leaner, lighter, and more naval. And in three short years, your Marines have done just that. Marines are in the field and those changes are in the field today.

We're not waiting for 2030 or 2027 or 2025. Your Marines are ready to handle any crisis anywhere now. Our major divestments are done. We are at our fighting weight. Now we have to sustain our modernization efforts while focusing, as the secretary mentioned, on the quality of life issues most important to the marines, sailors and the families.

People are the real source of our competitive advantage and I ask for your help now to invest in their quality of life. We must focus now on where Marines and families live, where they eat, where they work. Marines and sailors expect that from us and they deserve it. Restoring and modernizing our infrastructure is directly tied to retention, supporting our families, and generating readiness.

So on behalf of all Marines, I ask for your support now as we bring our facilities up to par with the quality of Marines and sailors operating from those warfighting platforms. And I'd also ask for your support to our Naval Expeditionary Capability. The CNO and I agree on three key principles when it comes to amphibious ships.

First, the absolute minimum of L-class amphibious ships the nation needs is 31. That is the warfighting requirement. Second, block buys save money, and they give industry predictability. And third, divesting without replacing creates unacceptable risk. Amphibious ships are critical to crisis response for this country.

That's how we evacuated citizens, US citizens out of Lebanon. That's how the US made initial entry into Afghanistan after 9/11 from the sea. And when DOD sends its lifesaving support after hurricanes and typhoons and earthquakes around the world and -- and here in the US amphibious ships with embarked Marines were the only practical option.

Today we didn't get to do all that plus directly contribute to campaigning and integrated deterrence. Here's the bottom line from where I see it. The first time we can't respond to anally or partner in time of crisis will probably be the last time they depend on us for help, and we cannot let those partnerships erode.

In my final year as commandant, I'd finish by just saying thank you. Your Marine Corps wouldn't be where it is today without your oversight, your guidance, your unwavering support. And with that, I welcome your questions. Look forward to working closely with this committee in the months to come. Thank you, sir.

JON TESTER:

Thank you, General Berger. It's also fair to say the Marine Corps wouldn't be where it is today without your leadership. So, we thank you for that. I'm going to yield my time to Senator Murray who is the --

PATTY MURRAY:

-- Go ahead if you want to --

JON TESTER:

-- No, no, no. I know where the bread's buttered. I'm going to yield to Senator Murray, the chair of the full committee.

PATTY MURRAY:

Thank you very much, Chairman Tester, Vice Chair Collins, really appreciate it. And we really are fortunate to have two really tremendous leaders steering this subcommittee. So I'm grateful to both of you and I'm very glad to join today's hearing with you as we continue to work towards regular order here in the Senate for the first time in years.

And as Senator Collins and I have made very clear, we have no -- we have a responsibility to work in a timely fashion to write the bipartisan bills that will fund our country, build us as stronger country and make our communities safer, and ensure that we stay ahead of our global competitors. And the conversations that we're having today, including this hearing really help us show how we are going to make those investments decisions here in DC that will help strengthen our country and protect our families, which as we all know is especially important when China and others are making significant investments in their own navy and military right now.

And if we're going to keep pace with those countries, we have to work together to get bipartisan funding bill done. So, I'm really glad to have this opportunity to hear from the witnesses today about the president's budget request for the Navy and Marines, particularly how we can make sure we are supporting our service members and their families.

And we need to remember that includes making sure that our military families, as you just alluded to, get things like child care and mental health care and good housing and schools and a lot more because at the end of the day, our best naval ships can't go very far without the brave men and women who are willing to put themselves on the front lines to keep our country safe.

So, with that, I do have some questions for you today and Admiral Gilday, I'd like to start with you because in February, seismic deficiencies were found at three of the dry docks, as you know at Puget Sound Naval Shipyard in Bremerton, and the Delta Pier at the Trident Refit facility in Bangor, two very critical facilities in my home state of Washington.

And as a result, six -- as a result, submarines were prohibited from using three of those six dry docks at Puget Sound and the only dry dock at Bangor. Puget Sound Naval Shipyard is the primary location for attack submarine and aircraft carriers maintenance, as we know, on the West Coast. So I wanted to ask you today, how exactly is the Navy working with Puget Sound Naval Shipyard and Trident Facility to plan and implement the near term mitigation?

And what resources do you need to have to accomplish that?

MICHAEL M. GILDAY:

Thank you, ma'am. We're making well -- good progress right now on repairs in three of those -- three of those facilities. So, the first one at TRF Bangor will be complete in June. That's the most substantial work that we're doing, essentially repairing both sides of the --the entire dry dock. The -- the two other docks will be finished in April and May. And so they're progressing well and we're focused there on those portions of the dock that are closest to the -- the nuclear power plant in the submarines.

We actually put them up -- put them up on -- put them up in -- in the dry dock. There is a$300 million request in my unfunded list. As you know, that was a late add that that didn't make it into the budget. And so, I request your help there. Longer term, we'll be looking at other upgrades that we need to make in order to ensure the seismic resiliency of that facility.

As you stated, we really count on it in terms of providing submarine maintenance for the fleet.

PATTY MURRAY:

So, the $300 million is for the short term, that's your request?

MICHAEL M. GILDAY:

Yes, it is.

PATTY MURRAY:

And then longer term?

MICHAEL M. GILDAY:

So longer term, too early for me to state what that requirement is. We are right now scoping the long-term repairs in conjunction with the PSYOP work that we're planning up there as well. So we want to make sure that it's seismically resilient.

 

PATTY MURRAY:

Okay, and you will stay in touch with us on when that's done?

MICHAEL M. GILDAY:

Absolutely, ma'am.

PATTY MURRAY:

Okay. Secretary Del Toro, back in 2021, it was announced that Naval Station Everett had been designated as the future homeport for 12 Constellation-class frigates scheduled to be delivered in '26. That's great news. The Navy's long-term commitment to effort in Sonoma County, my state, is really clear. But as we get close to that date, we need to make sure that not only the Navy has the resources they need, but the Everett community also has the support it needs to accommodate the influx of sailors and their families.

Are those still on track to arrive in 2026?

CARLOS DEL TORO:

We're currently looking at the lay down plans, ma'am, for all of our ships given the increasing Indo-Pacific threat that we face. I myself have visited the Puget Sound area and looked at all the different infrastructure issues that are at play there. And we're looking and discussing with the CNO exactly what investments need to be made over the next several years, so that we can move in the right direction including greater support for the hospital in the Puget Sound area as well too.

And if I could just briefly comment and thank you for your leadership as well as the collaboration that we've had with the community of Puget Sound as we actually moved very aggressively to affect the repairs to the dry docks very expeditiously. It's been nothing but great relationship.

PATTY MURRAY:

Thank you very much. And just really quickly, Mr. Chairman, if I can just ask Secretary again about the Navy suicide rate. Nearly 17 deaths per 100,000 sailors. That's just devastating. Does the president's budget request support any additional mental health?

CARLOS DEL TORO:

Very much so, ma'am. And the Department of the Navy's budget, we actually have additional funds upwards of $200 Million that are dedicated to this. And in addition to the actual human element of actually trying to bring everyone together to try to solve this very, very grave problem that we face as a nation and as a Navy as well too.

PATTY MURRAY:

Okay. Thank you very much. Thank you, Mr. Chairman.

JON TESTER:

Senator Collins.

SUSAN COLLINS:

Thank you, Mr. Chairman. Admiral Gilday, the fiscal Year '22, NDAA sought to empower the CNO by requiring the CNO to submit his or her fleet size requirements directly to Congress. In July of 2022, the first such requirement was submitted and called for 373ships compared to 296 in the fleet today. Your navigation plan which was released that same month called for 96 large surface combatants like those built at Bath Ironworks in my home state.

Two questions; first, when do you anticipate that your analysis will be released so that we have the benefit of your guidance in drafting the bill? And second, is it likely that your updated fleet requirement will be greater than the 373 ships in light of China's modernization?

MICHAEL M. GILDAY:

Ma'am, on the first question, I've committed to Congress to deliver that report by the 10thof June this year and I will make that deadline. We are on track with our analysis team to do that. Secondly, with respect to -- to not only the size but the composition of the fleet, I would expect that to change from the last report, particularly in terms of composition.

It's too early to tell the respect to size, but quite honestly, ma'am, I can't see it getting any smaller than 373 manned ships.

SUSAN COLLINS:

Thank you and that's quite a ways from where we are today.

DAVID BERGER:

Yes, it is.

SUSAN COLLINS:

General Berger, as we were sitting here, a headline came across my phone and it says Pentagon comes out against law requiring military wish lists and it came across just as you were explaining why you need more amphibious ships and that that was your number one unfunded priority. Isn't it important for Congress to know what your chief unfunded priorities are?

DAVID BERGER:

From my perspective, it's been useful I think to submit it from each of the services and you to have visibility on what's not in the budget for whatever reason. So from my perspective, it seems useful if it's useful to members and it has been in the past.

SUSAN COLLINS:

It's definitely useful to us and I don't think that Congress is going to take the Pentagon's advice on doing away with the unfunded priorities list. Admiral, let me return to you. Could you explain to the committee why our surface Navy is so important as a deterrent from deterrence perspective?

MICHAEL GILDAY:

So the -- the destroyers, the cruisers that we have at sea today are really the backbone of the fleet along with our aircraft carriers and our amphibious ships. You just can't replace forward presence. It's there to not only ensure that US interests are looked after, but that we're also poised in case any crisis comes up. We reassure allies and partners that we're there, 24/7/365. A full third of the Navy is forward on any given day.

A second third is in maintenance and the remaining third is either just returned for deployment or is ramping up to go. That's where we belong out forward. The secretary of Defense has directed readiness levels to us and those are ships that are -- that are ready to respond within ten days. Those ships are all at sea now.

And so what we're trying to do in order to take advantage of the firepower that we have today is to improve our maintenance cadence as an example to send more ships to sea. The more the better. The bigger fleet, the better.

SUSAN COLLINS:

Thank you, Mr. Chairman.

JON TESTER:

So we'll start with you, Secretary Del Toro. Last -- last year Congress accelerated investment in weapons so that our weapons magazines are loaded up for future contingencies. In this year's budget, the department is proposing to lock in procurement quantities for nine different weapons programs over five years.

This would provide significant predictability and stability to the industrial base. However, I know that in some cases such as the naval strength missile quantities requested this year are lower than appropriated last year. Further, it is not clear what the private sector investment will be in return for this procurement predictability from the government.

So, Secretary, could you explain how multi-year procurements can help stabilize the industrial base? And furthermore, what investments are you expecting in return from this predictability?

CARLOS DEL TORO:

Mr. Chairman -- Mr. Chairman, I believe that multi-year procurements are critical to growing the size of the fleet in terms of buying individual platforms and ships and such as critical as it is also to invest in munitions. And we appreciate the support of the Congress in being allowed to use these multi-year procurements for the purchase of -- of missile systems as well too.

Our budget in this year's fiscal president's budget submission increases the investment inmunitions by 50 percent, investing in Tomahawks SM-6, Mark-48 torpedoes, LRAS Macross the entire threshold of the missiles that are needed actually for the Navy to be able to accomplish its mission. I'm also a big supporter of the naval strike missile just on the LCS class of platforms.

We're looking to put them on all our LCS platforms moving forward. So I wasn't aware of the slight decrease in the numbers of NSMs. I thought that the numbers had actually gone up, but I'll go back and validate that and get back to you if there's been a small decrease in the numbers of NSMs. But I believe we're -- we're purchasing over 99 across the entire fit up.

JON TESTER:

Okay. And what do you expect in return from the industrial base with long-term predictability?

CARLOS DEL TORO:

Well, I expect their commitment to recapitalize in order to be able to provide these missiles at the pace that we're requiring them for both the challenge that we face versus Ukraine as well as the potential need to be able to deter China and the Taiwan scenario as well, too. And these missiles will be required in the numbers necessary to be able to get there.

So industry has to do as parts with a consistent signal being sent by the Department of Defense that we will be purchasing these missiles for a long period of time. They should feel comfortable in their confidence that they can invest in their own capitalization and their workforce to be able to produce these missiles and systems that are needed.

JON TESTER:

Despite repeated investments in the defense industrial base and the shipbuilding industrial base in particular, we don't really see improvements towards ships being delivered on cost and -- and on time. In fact, your annual report to pay for cost overruns on new ships is about2 billion bucks or close to it. It seems like I asked this every year, but what else can we do to support the shipbuilding industry to be able to get ships out on time, in particular, and undercost?

CARLOS DEL TORO:

Well, Mr. Chairman, I think that our investments in the P2P plan that the CNO has been committed to for the past several years actually is starting now to make some advancements in being able to get ships out of shipyards are far faster than than before, whether they're ships being repaired or new construction ships for that matter as well too.

With regards to the increased cost of the ships, much of it has been due to inflation and certainly the negative impacts of the CR and the workforce shortage that we are all existing. But I'd like to -- I'm hopeful that as we actually come out of COVID and and start fixing some of these work shortages that we have will be in a better place.

I want to thank the Congress and you particularly for your investment in over $2.3 dollars in workforce and industrial base investments last year. The number this year is equally significant, $1.7 billion. We will continue to make sure that those dollars get used wisely with a return on investment on behalf of the American taxpayer with the right oversight that's necessary to create these programs that hopefully will provide far greater numbers of workers to the shipyards themselves.

JON TESTER:

The two senators to my right and to my left have made it clear that they intend to follow regular order and get a budget up by the end of September. I think that's good news. The other side of that coin is, is that we do need to do our job, but also the industrial base needs to deliver on time. Is there anything that we can do to help you make sure that they're delivering our assets that we're having them build on time?

CARLOS DEL TORO:

Well, I, as secretary of the Navy, have held them accountable actually for delivering ships on time. I've had numerous meetings with all of the CEOs. I've walked all the shipyards myself to take a look at exactly how engaged they are in the construction of ships and providing the quality of materials that are necessary.

I think from the Congressional perspective, your continued commitment to invest in the industrial base, not just in the submarine community, but as the vice chairwoman mentioned in the surface warfare industrial base as well too is critically important. Those are measures that I think Congress should continue to take in order for us to get to a better place.

JON TESTER:

Senator Moran.

JERRY MORAN:

Chairman, thank you very much. Welcome to our panel. I appreciate your service and your presence here. General Berger, let me begin with you. Both the Marine Corps budget submission and unfunded priority list, invest heavily in CH-53 King Stallions. Explain why this particular aircraft is critical to the force design 2030 and the Marine Corps mission, if you would.

DAVID BERGER:

Last -- late last fall, went down to North Carolina, Senator, to fly on that aircraft. Having grown up in CH-53Ds and Es. This is a state of the art aircraft. It has a glass cockpit. It's a flyby wire digital airframe. It doesn't fly itself literally. But it is just exponentially years ahead of where anything else that we have.

Around the world, it is one of a kind. It has range, altitude capability, refueling, lift. It's marinized to go aboard ship like we do. It is one of a kind. To your question on how does it fit into force design, both the CNO and I believe strongly that we will need to operate in a distributed manner. That means you're going to have to move troops and supplies around the 53-K is critical for that, especially in regions where you have long distances where you got to do that over water.

It's just -- this is the -- this is the machine built for that. And the price which I'm glad to see happened, gone down from 117 to 113 in the most recent lot. That's the -- that's the direction you want to see costs go as they learn how to build an airframe. So the cost is headed in the right direction.

And lastly, I'll just say it's scheduled to deploy later this fall. I'll be pretty excited to see what it does aboard ship when it's actually deployed.

JERRY MORAN:

Thank you. Gentlemen -- or Admiral Gilday. P-8s, advancing technology, submarine capability of our adversaries. The P-8 Poseidon, I assume, continues to be critical to deal with those threats. I notice that -- I visited SOUTH COMM last month or a few weeks before that. And the commanding general in our conversation, but also in a conversation with Senator Shaheen indicated that the drug flow coming across our southern border is at an all time high.

SOUTH COMM's allocated resources to see this situation, her ISR assets, quote, "are at an all-time low." The Navy's procurement has stopped short of meeting the original risk-informed requirements for the 138 aircraft. What risk assessments went into this decision to halt the procurement of this critical capability?

MICHAEL GILDAY:

Sir, right now the -- our estimate is 127 and we're sticking to that. So this is based on evolving war gaming analysis that we're doing on an annual basis. The same thing goes into our ship numbers and our ship mix. As you said, P-8s are vitally important. So I've never had to have to ask a combatant commander twice if they needed another P-8. They are in very, very high demand.

They're not the only asset out there that we -- that we rely on for ISR, but particularly with respect to an ASW mission, which is what they were really designed for. They're less optimum for SOUTH COMM as an example and more against, let's say, a Russian submarine threat coming from the high north and they tend to come out with more frequency these days as well as a growing Chinese threat.

And so our focus has really been on both of those primary global threats as outlined in the National Defense strategy.

JERRY MORAN:

Thank you and let me turn to you Mr. Secretary. Last year's PACT Act was signed into law. It provides benefits to veterans exposed to toxic substances. The law included a provision allowing for individuals impacted by contaminated waters at Camp Lejeune to file for damages in court -- federal court. The PACT Act required claimants to present their claims to the Navy before going to court and this is certainly additional burdens on claimants.

The Department of Justice, the federal court system, if the Navy can't find a way to provide an administrative remedy in these cases, would you explain where the Navy is in its effort to set up an administrative claims process? How many claims have been filed with the Navy since the law became -- took effect on August the 10th, How many claims is the Navy acted on and can you provide a reasonable timeline for the Navy to process and respond to those claims?

CARLOS DEL TORO:

Thank you, Senator. And we're very grateful for the support that was given by the Congress in order to pass the PACT Act in order to take care of our -- of our troops, our sailors, our Marines, and their families as well too.

JERRY MORAN:

Thank you.

CARLOS DEL TORO:

We have stood up an outward facing website at the processing unit. It's my understanding that we have received over 20,000 claims. We are obviously going to have to increase the personnel assigned to the processing unit to be able to address those claims. I'll have to get back to you on an exact number of claims that are -- have already been addressed.

I believe this is just beginning and there's much more work to be done. But we are committed to actually being able to process the claims and responsible manner in order to move -- move down that path.

JERRY MORAN:

Does the president's budget request reflect that additional personnel?

CARLOS DEL TORO:

I have to get back to you. Senator. I don't believe it does right now.

JERRY MORAN:

Okay. Thank you, Mr. Secretary.

JON TESTER:

Senator Schatz.

BRIAN SCHATZ:

Thank you, Mr. Chairman. Thank you all for being here. Secretary Del Toro, just very quickly. Are we on track for defueling Red Hill?

CARLOS DEL TORO:

Senator, we are very much on track for defueling Red Hill. As you know, we have also submitted our closure plan for Red Hill. We've submitted addendum number one and we're working on addendum number two as well too that will be submitted later this year.

BRIAN SCHATZ:

Do you have any reason to believe that defueling will adversely impact the DOD's ability to support military operations in the AOR?

CARLOS DEL TORO:

I do not, Senator. And all my conversations with senior leadership at the Pentagon and looking at the strategic lay down plan for the fuel afterwards. I don't see any challenges whatsoever to executing that plan over the course of time. Absolutely not.

BRIAN SCHATZ:

Thank you. And do I have your commitment to make sure that the Navy works with state and local partners on the health care aspect of this as well as environmental remediation?

CARLOS DEL TORO:

Senator, you've always had my commitment on that subject and you will continue to have my commitment on that subject, working with the office of Secretary of Defense and DHA, in particular, to ensure that the service members and also the people of Hawaii have the services they need from a health care perspective moving forward.

BRIAN SCHATZ:

Thank you very much. Admiral Gilday, given that the INDOPACOM unfunded priorities list includes military construction, joint training with regional partners, and logistics, can we be confident that -- this is a delicate question, so I wish you luck with the answer. Can we be confident that member driven priorities aren't crowding out our more foundational budget priorities?

I'm talking about divestment here and we've had some good conversations and even on the committee, we've been talking about divestment. But everybody talks about divestment every year. And as I look at these priorities, it seems to me that these are the things that should be not on the unfunded priorities list, but on the list that is -- that we're planning to fund.

So can you reassure me that we're not accommodating all of the members and all of their hometown business interests in contradiction of what the Department of Defense needs?

MICHAEL GILDAY:

I think, sir, the -- the friction point with divestment, specifically ship divestments directly butts against those members that are interested in ensuring that repair yards have sufficient throughput going through them. Right? And so if I look out to 2026 with a high degree of confidence, I can tell you that as an example, in Norfolk, throughput through those shipyards will increase by 10 percent.

In San Diego, it'll increase by 9 percent. There's a bit of a dip there in '24, but it does stabilize. If I could just draw a parallel and to our shipbuilding plans. So with our submarines, you can look out for 20 years and you know that we're in a cadence to build one SSBN and two SSNs. Likewise, that gives stability to the force in terms of what you're going to look at in terms of a battle force you're going to field under the sea and what those repair requirements are with a high degree of fidelity.

We're just now getting to that point in the surface build production lines, destroyers, LPDs.  We want to keep -- we want to keep that line -- we want to keep that line going.

BRIAN SCHATZ:

I get all that and --

MICHAEL GILDAY:

-- You get that and so that gives a higher degree of fidelity in terms of what the future looks like for those repair yards.

BRIAN SCHATZ:

Sure, and I'm obviously supportive of keeping the industrial base up and running and also the predictability and probably the price predictability of long-term contracts and long-term investments. But I just worry that we are giving short shrift to the kind of boring stuff, making facilities more resilient, funding our partnerships in the region, sewer, water, housing, all of it.

MICHAEL GILDAY:

I get your point, So if you -- if I were to take our investment strategy with respect to infrastructure in the Indo-Pacific and I have another billion and then another .5 billion on my -- on my unfunded list for infrastructure. Most of that's in the Pacific and it's completely aligned with INDOPACOM's plan for bases in places that we need to expand in the Indo-Pacific or to shore up because we've not done any work there in a while.

We work our budget with respect to that sort of hand-in-glove with the combatant commander.

BRIAN SCHATZ:

Thank you. Just one final question for -- for Secretary Del Toro. Red Hill is not the only aging infrastructure in Hawaii, that's for sure. And like you to speak to the sort of more basic, more mundane needs regarding infrastructure in the state of Hawaii.

CARLOS DEL TORO:

Very much, Senator. We've actually dedicated in this year's budget over $1 billion above last year to investments in the infrastructure. And they're going to have to continue. Historically, we've invested less than 1 percent of the budgets over the last ten, 20 years actually in infrastructure. And it's as critical to combat readiness as the readiness of our ships and our aircraft, etc.

With regards to the infrastructure and on the island of Oahu throughout Hawaii as well too, it is challenged. It's very old. It needs to be replaced. I believe the CNO has actually executed Three recent assessments to take a look at the water, the sewage, and -- and electricity actually on the island in order to support the infrastructure and the ships that are there and the families that are there as well too.

And we have to continue that investment moving forward. We cannot ignore it. I myself have called for a 30-year infrastructure plan for the Department of the Navy. It'll take us, you know, a year to sort of get there and get it in the right direction. But both in the Marine Corps and the Navy, all three of us are actually paying a lot more attention to infrastructure because it's the right thing to do.

BRIAN SCHATZ:

Thank you.

JON TESTER:

Senator Murkowski.

LISA MURKOWSKI:

Thank you, Mr. Chairman. This morning in Alaska, there is a 500 speakers that are lined up to participate at the Arctic Encounter Symposium, the largest arctic gathering here in the country. We're talking a lot about the Arctic nowadays. One of the principal issues of discussion will be the China-Russia intersect and the interest in the Arctic.

I am all eyes on the Arctic all the time and I was a little concerned, Mr. Secretary, as well as, Admiral Gilday, in--in going through at least your written testimony this morning, some --some 50 pages of text between the two of you. There is zero mention to resourcing your department's Arctic strategy or defending America's Arctic.

That worries me. We have seen Arctic strategies released by each one of the services. That's greatly important, but we all know that just having a strategy is nothing if we do not resource it and resources are reflected in the budget. So, Mr. Secretary, can you explain to me why you haven't been conducting more overt operations in the Arctic?

And just more generally, if you would like whether or not you think that this budget properly resources the Navy's Arctic strategy?

CARLOS DEL TORO:

Senator, let me say that I deeply am concerned about what's happening in the Arctic. Obviously the United States is an Arctic nation just like Russia as well too. Unfortunately, they have been investing far greater resources than we have historically in the Arctic, whether it be icebreakers or troops or etc.

We need to do a better job of our investment in the Arctic. I think we've been challenged obviously with the current situation in Ukraine. As well as challenged by the current increasing threat of China as the pacing threat and the scenario with regards to Taiwan, which has demanded additional resources to be able to address those significant challenges.

But nevertheless, the CNO, myself, and the Marine Corps, and General Berger are looking at trying to increase the number of operations that we have actually in the -- in the north and also taking a look at future deep-water ports that perhaps we could reinforce in terms of what appears and etc. I myself am planning to go to Alaska in June to address some of these issues myself.

So I look forward to that continued conversation with you and the rest of Congress as we --with a need to address these significant threats that are evolving.

LISA MURKOWSKI:

Good, well, we'll certainly welcome you in June. Any time you want. General Berger, let me ask you the same, whether or not you feel this budget appropriately resources the -- the --the issues as they relate to our Marine Corps and the footprint in Alaska?

DAVID BERGER:

It gives us the thanks for the question, ma'am. It gives us the resources we need to train there, yes. Both in exercises that are regularly scheduled, like you mentioned, Arctic Edge being one of them, where we go up and frankly can train to a level we can't in inside the rest of the United States, both because of the airspace and the sea space.

And the -- and the -- in the force-on-force opportunities that you have in Alaska that is really difficult to generate down here. And there's also the unit deployments that we do to Alaska. And I took my battalion to Alaska because you can -- you can build readiness there and get your -- it's a regular deployment.

You can do things again that you can't do at home station. It does provide us the resource --the Marine Corps, the resources to do that right now.

LISA MURKOWSKI:

Okay. Well, it is something that again we -- we recognize that this is a matter -- this is an issue when it comes to Arctic and Arctic readiness that we're not there yet. I think we would all recognize across all the services. We are not there yet. You mentioned -- you mentioned icebreakers and I'm sure you know this, Mr. Secretary that we're sitting here still at one and half icebreakers on a good day.

Compare that to Russia's 56. China is moving forward, Even India is talking about building an icebreaker. So we are -- we are well behind in -- in the construction of -- of how we're going to facilitate our icebreaking fleet. I have two questions and I'm probably not going Tobe able to get to them. So I'd ask that you both take these for the record and this is to you, Admiral Gilday, and to you, Mr. Secretary.

And they relate to World War II munitions and explosives of concern, unexploded ordinances that were left near -- near -- on Alaska at the end of the Aleutians. There -- there have been several areas identified where these hazards can be. It's been concluded that risks to public safety are present in many of these areas.

It is -- it's a concern amongst the people in -- in the region, most notably. Now we're told that Navy says it does not plan to conduct another survey until 2027 until more advanced underwater search technology is developed. I want you to be aware of this because I'm going to include language in the -- in the defense appropriations bill to conduct a more thorough survey in 2024. I think the people there deserve it and it's an -- in addition to the unexploded ordinances, I'm also going to inquire about the -- the chemical weapons, the mustard agent, the Lucite that was deposited off of Attu.

And again, the survey of that chemical weapons dump site. So just put that on your horizon, if you can get back to me earlier than that it might obviate the need for -- for language. Thank you, Mr. Chairman.

JON TESTER:

Senator Baldwin.

TAMMY BALDWIN:

Thank you, Mr. Chairman. Secretary Del Toro, building on this committee's prior shipbuilding investments, I'm advocating for additional funding for the frigate industrial base and workforce in fiscal year 2024. The ship will be a central part of the future fleet and as a new class will undoubtedly face workforce, supplier, and shipyard infrastructure challenges.

Last year, Congress provided $50 million for the Frigate Industrial Base and Workforce Development Program. I want to thank you for noting your support of this funding during last year's hearing. First, can you share your thoughts on how the fiscal year '23 funding will be executed to benefit this program?

And then secondly, please follow up with -- because I believe a sustained and robust investment is required to continue supporting the ships production ramp up. How do you see sustained industrial base funding helping the program?

CARLOS DEL TORO:

Thank you, Senator. And first let me thank you for your commitment to ensuring that the Constellation gets built on time and on track. And I'm pleased to report that she is on time and on track right now for -- for delivery. And we want to make sure that we continue that, that -- that record. And the industrial base investments are necessary.

Most of the monies that I believe will be dedicated towards Constellation will go into the force of workforce development programs to try to help the shipyard recruit additional and train additional individuals in Wisconsin to train them to be able to support an increasing need for that workforce in -- in the shipyard itself.

I think that will be the best use of that -- those monies. The shipyard itself has invested a lot in CapEx and has reinvested a lot of its own profits in its own capitalization as well too to try to keep the frigate on track. So I'm hopeful that the monies in '23 are going to be better used in workforce development than actual CapEx-like investments in the shipyard.

TAMMY BALDWIN:

Okay, thank you. General Berger, the Marine Corps listed LPDs, that is the amphibious transport dock ships, as their number one priority on their unfunded priority list. However, the Navy has halted its pursuit of the transport dock line, citing the program's growing costs. Can you explain why supporting the LPD project is important to the Marine Corps and what the second and third order effects would be if the LPD project is not funded?

DAVID BERGER:

Senator, in my opening comments, I tried to highlight the operational and the statutory minimums both mandated by Congress and what I see, what we see as the warfighting requirement. And that's a floor, not a ceiling. And it consists of ten big decks, LHAs, LHDs, and 21 medium or smalls LPDs. So that's the -- that's the bare minimum.

This budget proposes early decommissioning of three of those LSDs with no construction, no acquisition of an LPD. So from my role as defining what the requirements are and the statutory minimums of 31, there's no plan to get there. So from my perspective, I had -- I didn't see any other way than to put it on the -- on the unfunded list in order to reflect that there's no plan to get to the minimum requirements.

If we don't have it, to your question, what's the risk? The risk is our inventory atrophies to a point where we cannot deter, can't campaign, can't respond. And as I tried to highlight when we can't respond when we have to then our allies and partners' trust goes down, and in all likelihood, the way the Chinese navy is growing and they're expanding, they're liable to try to step in and we can't afford that to happen.

I would say the last part of this of course is maintenance, which is the number one priority for the CNO for four straight years and recovering that maintenance and making sure we have the fleet that we need that's ready as he points out is key also.

TAMMY BALDWIN:

You've previously cited that the buy now or block by acquisition strategy will mitigate costs by footing the bill upfront. Can you explain why you think this will be an effective way to mitigate costs such as inflation or if there are other methods to help mitigate those costs?

DAVID BERGER:

The CNO is better qualified to, to explain the variables here. But from my my perspective, a predictable pattern of construction on what they call centers is key, key for parts, key for labor. And for LPDs it's two years. So we have to have a battle rhythm, a cadence that allows them the predictability that they need.

If we don't have that, then they can't hold the workforce, they can't keep the supply chain working, and it starts to -- starts to tumble downhill.

TAMMY BALDWIN:

I note that I've run out of time, but maybe for the record, Admiral Gilday, I'd like to give you the opportunity to respond on the topic of LPD sand feel free to submit that to the committee in writing.

MICHAEL GILDAY:

Thank you, ma'am.

JON TESTER:

Senator Graham.

LINDSEY GRAHAM:

Thank you, Mr. Chairman. What's the inflation rate today, Mr. Secretary, do you know for the nation?

CARLOS DEL TORO:

Senator, I believe it's approximately 4.6 percent or so.

LINDSEY GRAHAM:

For the country?

CARLOS DEL TORO:

Overall.

LINDSEY GRAHAM:

Okay. Is the Navy budget equal to inflation?

CARLOS DEL TORO:

No, sir, it's not.

LINDSEY GRAHAM:

Okay, what's the Navy budgets? How far below inflation is it?

CARLOS DEL TORO:

I believe it's about 2 percent below inflation, sir.

LINDSEY GRAHAM:

Okay. How many ships do we have in the Navy?

CARLOS DEL TORO:

And when I mentioned the 4.6, that's the predictors that were used.

LINDSEY GRAHAM:

All right. What's the actual inflation rate?

CARLOS DEL TORO:

It's somewhere in the 6 percent range, sir.

LINDSEY GRAHAM:

Okay. So the predictor was wrong.

CARLOS DEL TORO:

Predictors are often wrong.

LINDSEY GRAHAM:

Yeah. Okay. Have you accounted for that?

CARLOS DEL TORO:

Have we accounted for?

LINDSEY GRAHAM:

Yeah.

CARLOS DEL TORO:

Well, we're very thankful for the additional $9 billion that the Congress provided the Department of Defense --

LINDSEY GRAHAM:

-- My point is that you're a couple of points below inflation. I think that's my point. So how many ships in the Navy?

CARLOS DEL TORO:

296, sir, as of today.

LINDSEY GRAHAM:

Okay. How many ships in the Chinese Navy?

CARLOS DEL TORO: It's upward of 300.

LINDSEY GRAHAM: Like 340.

CARLOS DEL TORO:

Yes, sir.

LINDSEY GRAHAM: Okay. By 2028, how many ships will we have?

CARLOS DEL TORO: By 2028, we will have approximately 291 ships or so.

LINDSEY GRAHAM:

That's less than 296, right?

CARLOS DEL TORO:

Yes, sir.

LINDSEY GRAHAM:

Okay. How many will the Chinese have?

CARLOS DEL TORO:

I -- I can't predict exactly what the Chinese will have, but estimates are upward of 440 or so.

LINDSEY GRAHAM:

Yeah. Okay.

CARLOS DEL TORO:

I will add that our ships are extremely more modern than they ever have been.

LINDSEY GRAHAM:

-- Well, let's hope so --

CARLOS DEL TORO:

-- as well.

LINDSEY GRAHAM:

-- I believe -- let's hope so --

CARLOS DEL TORO:

-- and lethal.

LINDSEY GRAHAM:

If not, we're a world of hurt. Let me -- let me ask you this. CNO, how many ships do we actually need?

MICHAEL GILDAY:

373 manned and probably 150 unmanned [Inaudible].

LINDSEY GRAHAM:

Okay. So under this budget, the one -- do you support this budget?

MICHAEL GILDAY:

I do.

LINDSEY GRAHAM:

Okay. If we have 296 today and under this budget we're going to be at 291 in FY '28. How do we get to 373?

MICHAEL GILDAY:

Sir, right now we have 56 ships under construction and another 76 that are under contract. We can't buy back time. For 20 years, we were focused on ground wars and understandably so the Navy -- the Navy wasn't the priority. Sir, keeping old ships -- keeping old ships that are not usable or workable is not going to make us a stronger Navy.

LINDSEY GRAHAM:

I'm not arguing with you. I'm just asking, does the budget get you to 373 ships?

MICHAEL GILDAY:

If we follow the shipbuilding plan that -- there's three alternatives in the shipbuilding plan. The third alternative, assuming about a 5 percent increase above inflation above our topline.

LINDSEY GRAHAM:

Okay, you're assuming 5 percent above inflation. The actual budget is 2 percent below inflation. How can you support a plan that requires 5 percent to get you to where you want to go? And the actual plan is 2 percent below inflation? I mean that doesn't make sense to me. Does that make sense to you?

MICHAEL GILDAY:

Well, sir, part of it gets that, what can the shipbuilding industry actually produce and so if --

LINDSEY GRAHAM:

Do we have a shipbuilding industry problem or do we have a budget problem?

CARLOS DEL TORO:

We have a shipbuilding industry problem currently, Senator.

LINDSEY GRAHAM:

Okay. Well, let me just go back to the budget. He just said you need 5 percent above inflation Am I quoting you right?

MICHAEL GILDAY:

[Off-mic]LINDSEY GRAHAM:

To get to that 373 number. You just said that the Navy's budget is 2 percent below inflation. And when you look out over time in year ten, do you know what percentage of GDP we'll be spending on defense?

CARLOS DEL TORO:

I cannot predict that in 10 years, Senator.

LINDSEY GRAHAM:

Well, I can. I can tell you right now it's 2.5 percent. How many times has this nation spent less than 3 percent on GDP for defense in the modern era? I know. I'll just tell you --CARLOS DEL TORO:

-- Four times --

LINDSEY GRAHAM:

-- Four times. 1940, 1999, 2000, 2001. This budget is going to get us to 2.5 and FY '28 it goes to 2.9. So your budget is taking GDP spent on the Navy and the military to historic lows. The budget you're supporting is below inflation and you're telling us to get to where we want to go we've got to be above inflation by 5 percent.

If this is a good budget, I would hate to see a bad budget. Thank you.

JON TESTER:

Senator Shaheen.

JEANNE SHAHEEN:

Thank you, Mr. Chairman. And thank you to each of you for being here today and for your service to the country. I don't know, Mr. Secretary or Admiral Gilday, which of you would like to answer this question, but the Portsmouth Naval Shipyard has done the first shipyard infrastructure optimization program, dry dock --dry dock modernization.

It's a mouthful. Are there lessons learned there that you think should be applied to similar future projects in Hawaii and Washington? And what are they?

CARLOS DEL TORO:

Very much so, Senator. And actually I'm pleased that the progress in Portsmouth actually has remained on track, but it's been at the expense of many years of trying to understand exactly what we needed to do there from an engineering perspective. And those lessons learned are being applied actually in Hawaii.

I just signed the first contract out in Hawaii for $2.8 billion, my staff did. And we've applied those lessons to what we're experiencing in Hawaii, although both shipyards are actually aren't exactly the same nor are the projects themselves exactly the same. But I'll ask the CNO to comment further on.

MICHAEL GILDAY:

I think one of the things -- ma'am, one of the things that we learned because these -- these projects are so complex and we haven't done them in 100 years, is to bring the best in industry together in a group to inform how we move together. We didn't do that as well in Portsmouth, We relied on a single contractor.

We brought together many more experts when we did the estimate for Hawaii and the contract was just signed two weeks ago. I think we're in a better position with a design that will keep us on track. In a bit more challenging area in Hawaii than Portsmouth. But that said, the Portsmouth, we've learned a lot from Portsmouth in terms of how we both design and then move forward in execution.

JEANNE SHAHEEN:

Thank you. Well, thank you both for your support for that project and for coming to see it. I think it's been very impressive. General Berger, the Marine Corps is in its fourth year now of force design 2030. What have you seen in the Nagorno-Karabakh war or the Ukrainian war that has validated your approach to force design 2030? Are there lessons there or are there changes that we need to make in response to what you've seen?

DAVID BERGER:

Boy, that's -- that could be a long explanation. I am patient --

JEANNE SHAHEEN:

-- You have two minutes and 33 seconds.

DAVID BERGER:

I've got it. I'm patient in drawing long term lessons learned while there's a fight going on because you can -- you can make a mistake too early on thinking you've seen something and we should change everything. We need to be a little bit patient. That said though, I think we've seen enough to draw some conclusions as you point out because this is 10, 12 years observing this.

We can draw some conclusions first. The ability of a force to operate more spread out and empower authorized junior leaders to make decisions at speed matters. There's almost ubiquitous sensing nowadays, everywhere. You need to count for that. And some of the counter to that is basics of camouflage and some of it is much more technical.

Logistics, logistics, logistics, logistics. And lastly I would say the ability of a force to adapt is huge. It's hard to quantify, ma'am, but the fight that you're in is never the fight that they taught you in school. And I am very -- we should be very impressed by the ability of Ukraine to adapt over the past year all along the way and the failure of Russian units to do the same.

You have to adapt. The force has to adapt to what the environment they've got. And they've done a marvelous job of that. Outmanned, outnumbered, they have all the odds against them except for NATO and the US. But they have adapted. We need to be able to do the same.

JEANNE SHAHEEN:

Well, one of -- one of the things that I understand you're working to do and how does this complement that, but as it's been described to me, you're hoping to change from the Marine Corps historically young force to a more experienced force. So how does that help us in those kinds of environments?

DAVID BERGER:

It's directly tied to it. If you're going to empower, if you're going to authorize junior tactical leaders to make really critical key tactical and operational decisions, they need the maturity to do that. By maturity, I don't mean an age, I mean enough repetition seen enough, done enough to -- to see a close semblance of what they've trained for before and make a very quick decision.

We have to -- we have to mature the Marine Corps force to reach a better balance of a very, very young force versus a force that has enough experience in there to make those tactical decisions, which is at the root of what force designed for us is doing. Reach that right balance, retain more talent, and balance the experience that we're going to need with the youth that we've always had.

JEANNE SHAHEEN:

Thank you. And, Secretary Del Toro, I'm out of time, but one of -- we had a hearing last week in the Armed Services Committee on recruitment and retention and the challenges that we're facing in our military. One of the issues that I think is very important to helping with recruitment, with retention, in particular, is ensuring that there is child care for families who are serving.

I'm going to submit this for the record, but I'd like to know what we're doing to better expand our ability to provide child care for DOD families. We've done a really interesting Congressional Defense Award in New Hampshire between the shipyard and Pease National Guard who are doing a child care facility jointly.

Are there -- are there creative ideas like that that we're working on? But I will submit for the record.

CARLOS DEL TORO:

Very quickly. We had two in the budget last year. We have three in the budget this year.

JEANNE SHAHEEN:

Great. Thank you.

JON TESTER:

Senator Hoeven.

JOHN HOEVEN:

Thanks, Mr. Chairman. Secretary, in your testimony you highlight the significance that -- of the challenge that China poses to our Navy and our Marine Corps. But last fall, the administration released a draft regulation that would require contractors to report on any greenhouse gas emissions linked to the work that they perform on DOD contracts and then prioritize emissions reductions regardless of the cost or impact on the warfighter.

If this regulation's finaled, it will increase costs or discourage contractors from working with DOD and put green mandates ahead of operational requirements. And I would guess China would be pleased to learn that the US is willing to spend more to make weapons greener instead of getting more weapons or more lethal weapons to combat our adversaries.

Would you -- can you -- can the Navy afford to have contractors increase their prices and so forth and focus on how green their weapons are in the face of the China challenge? And will somehow reducing the emissions of our weapon systems help either the Navy or the Marine Corps to more effectively meet the challenge that China poses as you outline?

CARLOS DEL TORO:

Senator, I'm not exactly sure that the relationship between green gas-gas emissions were tied directly to the weapon systems themselves. There's a lot of other utilities that the United States Navy depends upon in which case green technology does make a lot of sense and we are investing a lot of green technology.

In the Marine Corps alone, we've actually taken Marine Corps Base Albany to zero essential emissions essentially and that pays off tremendous dividends and being able to provide us more resources to actually put into combat readiness and to be able to buy more weapon systems themselves.

JOHN HOEVEN:

Have you seen the proposed regulation that I'm referring to?

CARLOS DEL TORO:

I'll have to look -- no --

JOHN HOEVEN:

--I encourage you to take a look at it because that's not what it does. It requires additional focus on making the systems -- weapons systems and so forth the contractors provide more green and it's hard for me to understand. We're talking about lethal weapons that that would be the focus or how that could not be costly and counterproductive to our warfighters.

So I'd encourage you to take a look at it.

CARLOS DEL TORO:

I promise to look at it and get back to you, Senator.

JOHN HOEVEN:

Thank you. Thank you, Secretary. And then, Commandant, let me ask General Berger, the US pilot training. In your testimony, you mentioned the Air Force probably does not have the capacity to train the number of MQ-9 officers that you need. So what are you doing to get that training, Have you -- and, you know, are there enough trainers?

Have you looked at contract training? Have you looked at alternatives then to address it?

DAVID BERGER:

The way I captured it in the written testimony is as accurate as pictures, me and General Brown and CNO have. We don't see any -- any shrinking of that, you know, reduction to that demand. So the CNO -- we've got a couple options here as you pointed out. One is contract, two is a naval skill school for unmanned pilots ourselves.

In other words, opening up a UAS school ourselves, which we are talking about. We don't know yet what that would cost, where we would put it, the instructor base all that sort of thing. But it's pretty clear that the relying on the Air Force as we have the last couple of years and they've been really -- we wouldn't be where we were without them, is not going to meet the requirement going forward.

So it's probably going to be either a naval UAS school or a contract solution.

JOHN HOEVEN:

I'd like to talk to you about that. We put a lot of time and effort into working with Air Force at the Grand Forks Air Force Base, both to have a technology park, Grand Sky Technology Park, on that base as well as a test site. Great Plains test site, General Atomics is located there, the manufacturer. They are training their foreign military sales pilots.

They have the Brits there right now on the MQ-9. And so I would sure like to talk to you about that. Existing facilities, the ability to fly in the NAS without beyond visual line of sight aircraft. You know, manned aircraft having to chase, all these things that might give you a tremendous head start. I'd like to explore that with you.

DAVID BERGER:

Absolutely, sir.

JOHN HOEVEN:

Thank you, General. Admiral, number one, two and three thing -- things you need to really advance your ability to address the challenge of China in the Pacific?

MICHAEL GILDAY:

One is to keep shipbuilding on track. Clear, stable, demand signal --

JOHN HOEVEN:

-- I think Lindsey might agree with you on that one --

MICHAEL GILDAY:

-- clear, stable, demand signal to industry. We haven't always done so well in the past. We've been sinusoidal. We can't afford to be like that anymore. A continued investment in readiness. So that investment and capacity cannot be at the expense of current day readiness. We have to be ready for today and tomorrow.

And then I think a continued focus on modernization, 70 percent of the fleet today we're going to have ten years from now. So continue -- continuing to upgrade those capabilities as well as well as taking care of the material condition of those ships is really important.

JOHN HOEVEN:

I think you made a really important point earlier. It's not just the numbers of ships, it's having the ships you need to do the job. And I think that was an important point that you did-- did make. I'd like to thank all three of you for your service very much. I appreciate it and for being here today.

MICHAEL GILDAY:

Thank you, sir.

JON TESTER:

Senator Capito.

SHELLEY CAPITO:

Thank you, Mr. Chairman. And I want to thank our Senator Collins as well. Thank you all for being here and thank you for your service. Thank you, Secretary Del Toro, for the visit to my office several weeks ago. Over the past year, you and other defense leaders have spoken about the urgent need to increase production, particularly in munitions to replenish our stockpiles and be ready for the future contingencies.

In particular, solid rock -- solid rocket motors are a critical component in our precision guided munitions and we need to increase our capacity. I'm proud that some of these solid rocket motors for many of our critical munitions are -- are made from a Navy-owned facility in the state of West Virginia. So I would first like to ask you to visit there or I don't know if you've already been there, but I'd love it for you to have an opportunity to tour that facility in the future.

So I extend that to you. But, Mr. Secretary, how important is the production of these solid rocket motors to our national security objectives and readiness? And where are we on the pendulum here? I know we've expended a lot.

CARLOS DEL TORO:

First, Senator, thank you for your invitation. I will most certainly take you up on that. And not just to visit West Virginia because it is a wonderful state. But because of the criticality of these solid rocket motors and we are in a bit of an extremist in terms of being able to produce these at the rates that we actually need in the future.

And so we have to look for additional suppliers that can produce them. We have to make sure that we don't have continued mergers of companies for example, so that we have more competition in the industry as well too because they are critical to most of our missile systems, whether it be SM-6s or some of our larger missiles as well.

SHELLEY CAPITO:

Yeah, well, they're maximizing their space out there, so they're putting a little bit more space or a lot more space in. Let me ask you this, is the impact of this anything to do with the munitions that we've sent to Ukraine? Or is that why are we stockpiling enough there or or is it just hard to keep up with the production?

Which -- which one of those would be true?

CARLOS DEL TORO:

Well, I mean, we have a commitment to provide Ukraine the munitions that it does need --

SHELLEY CAPITO:

-- Correct --

CARLOS DEL TORO:

-- and will continue to need in the future. And so that obviously has expanded a lot of the munitions that we do have. Therefore, we have to make a commitment to increasing munitions across the board. The office of Secretary of Defense, the undersecretary of defense for acquisition and sustainment has been completely devoted to this effort, working with manufacturers across the country around the world indeed.

Secretary of Defense himself has invested a tremendous amount of time to working with other nations to ensure that we bring as many munitions as possible to the support of Ukraine. And that of course has allowed or requires us to continue to refurbish those stockpiles that we have here in the --

SHELLEY CAPITO:

-- Right --

CARLOS DEL TORO:

-- United States in order to get to this better place.

SHELLEY CAPITO:

Right. General Berger, could you speak to this the -- the importance of a stockpile and where you see that right now where we are?

DAVID BERGER:

A couple of thoughts, ma'am. First, based on what we've seen in Ukraine in the last year, the rate of expenditure of munitions, it's probably a lot higher in some scenarios, some situations than than we recognize. It's a good -- in other words, a good reminder to the rest of us. War isn't a 48, 72-hour kind of event all the time and every day, every week the expenditure amounts are very high.

We have a great process in place. I'm very comfortable with it in the Department of Defense for each request from Ukraine, getting analyzed and examined and who can provide what. But it's very clear that our stockpiles for training and for war fighting, we need to reassess the -- the assumptions in those to make sure that we have the depth because our -- our to your to highlight your point.

Our industrial base, using a phrase from the vice chair earlier, can't be just in time if we have to go to a conflict.

SHELLEY CAPITO:

No.

DAVID BERGER:

We've got to have it just in case. We got to have the depth and that industrial base to account for a big surge.

SHELLEY CAPITO:

Right. Yeah, I mean I think that's a source of concern. Admiral, do you have a comment on this?

MICHAEL GILDAY:

I agree with everything the general said. I think the biggest thing we learned was the expenditure rates. It's caused us to go back to take a look in our own war gaming and analysis, what our predicted expenditure rates would be, and the questions of assumptions we made. So that's why for the Navy and Marine Corps, you see for multi-year procurements of weapons in this budget proposal.

SHELLEY CAPITO:

So maybe your initial war gaming estimates might have been low or just used differently?

MICHAEL GILDAY:

Yes.

SHELLEY CAPITO:

Yeah.

MICHAEL GILDAY:

Yes. I think -- I think that we all assumed that our expenditure rates would be lower. Weapons are more technologically advanced. That's not playing out so well in Ukraine.

SHELLEY CAPITO:

Yeah.

MICHAEL GILDAY:

So it's informed our thinking.

SHELLEY CAPITO:

Okay. Thank you. General, let me ask you a question on fentanyl use in the Navy and Marine Corps. It's a national problem. It's reflected in your force. I understand between the -- the years 2017 to 221, 332 of our men and women in uniform succumbed to an overdose. Are you all focusing on this in the Marine Corps?

DAVID BERGER:

Absolutely, yes, I would say anywhere that you travel in the Navy and Marine Corps on any base, any station you're going to find fentanyl is a top of the list discussion when it comes tithe drug issues that are difficult to detect and readily available and affordable, absolutely. And it is -- to your point, it is a killer.

Every commander, every leader, enlisted officer is focused on it. To answer your question, yes, ma'am.

SHELLEY CAPITO:

Well, thank you. Yeah, and, Mr. Chair, I'm sure that would be the same. I'm out of time, but I would say it's such a different substance and so lethal, You know, I think on the prevention and education side, you can't over educate and over overemphasize just because you're taking a little pill, doesn't mean that this little pill is actually what they say it is. Mr. Secretary, I don't -- I'm out of time but.

CARLOS DEL TORO:

Senator, it's a major crisis in our nation and we in the Department of Defense and the Department of the Navy are paying tremendous attention to it to ensure that our troops understand the -- and they should never be using drugs to start with. But for them to understand the -- the real danger and threat that this immediately presents to one's life and that there is no second chance or it could be very little second chance when it comes to the use of fentanyl.

SHELLEY CAPITO:

Thank you. Thank you all for --

MICHAEL GILDAY:

-- If I could just.

SHELLEY CAPITO:

Yes?

MICHAEL GILDAY:

We characterize it as a poison --

SHELLEY CAPITO:

-- Good --

MICHAEL GILDAY:

-- to your point.

SHELLEY CAPITO:

Good it is.

MICHAEL GILDAY:

You don't know what you're putting in your body. It's killing people, 107,000.

SHELLEY CAPITO:

Yeah, well, thank you all very much. It's a tough fight. Thank you.

JON TESTER:

Senator Collins.

SUSAN COLLINS:

Thank you. Thank you, Mr. Chairman. Admiral Gilday, I was pleased that my colleague from New Hampshire brought up the Shipyard and Infrastructure Optimization Program. As she says, that is a mouthful, the SIOP program and that is well resourced in the budget, which I'm pleased to see, not only because the work that we both are interested in at the Portsmouth Naval Shipyard in Kittery, Maine is underway.

One phase has been completed, but there's more to come. But also because I'm concerned about the number of submarines that aren't operational because they need maintenance or refueling. And that's a trend that we need to reverse. I'm told that nearly twice as many submarines as planned were not deployable in recent months because of maintenance or other issues.

Are the investments in this budget sufficient for us to try to reverse that trend?

MICHAEL GILDAY:

I think so ma'am. A lot of this is on us in terms of process. There were three areas that were really focused on. One is eliminating surprises for whether -- for whether it's a private or a public yard in terms of what they -- what they need to do. It's just like doing a house renovation. If surprises drive you -- drive your budget up and they drive you off schedule.

So we've focused on that and I'll talk about numbers in just a minute. The second thing is material. So you've given us a pilot using OPM money. So multi-year money to not only put private yard availabilities on contract across fiscal years, but to also use that money to frontload the material so that the workers aren't waiting to -- waiting for that to arrive.

And it's mitigating the risks that we're seeing with supply chain -- supply chain vulnerabilities. The third piece is the workforce. And I know you're well informed about, you know, developing an experienced workforce and we continue to work with industry on that. Based on those three areas and the work that we've been doing, we've seen delay days out of shipyards come from more than 7,000 down to 3,000. That's not good enough.

I predict that based on the track that we're on will be less than a thousand a year and a half from now. So by the end of FY '24, our goal is actually below 900 and I think we're on track for that. But again, the -- the investments really in the material side in terms of money, there's a half a billion in Virginia-class submarine repair parts in this budget alone to address some of that.

So I think we're on the right track. We're not satisfied yet. But the more operational availability that we return to fleet commanders to your point about the submarines, the better off that will be in terms of having a Navy operating forward.

SUSAN COLLINS:

Thank you. With regard to workforce, let me just mention that the Portsmouth Naval Shipyard has one of the best apprenticeship programs that I've ever seen. Each year they bring in about 100 new people into this apprenticeship program. They train in very realistic conditions and very confined spaces, for example.

And it really is a great program and that's what I think we need to do more of in industry as well, so that we have a pipeline of experienced workers. Mr. Secretary, I just have -- well, I have many final questions I could ask, but I didn't want you to think I was ignoring you, but not asking you a question today.

And I do want to go back to the point that I made about the budget's assumptions on fuel costs in my opening statement, because the budget request assumes a fuel price of only$140 per barrel. And it was ironic that on the day of the presentation of the budget, the fuel costs as measured per -- per barrel was 20 percent higher than budgeted.

So my final questions for this hearing is, will you work with us to make sure that we do have sufficient funding for fuel and explain to the committee what would be the implications if we've under budgeted for fuel in terms of flying hours, steaming days, training exercises, and other readiness activities?

CARLOS DEL TORO:

Yes, ma'am. It is a serious impact because as the CNO said earlier at any given day one-third of our fleet and aircraft are operational and therefore we use fuel quite a bit. And so we're significantly impacted by the cost of that fuel. And so it is important to estimate those costs appropriately. And certainly, again, we thank the Congress for the support that it gave us in'23 by putting $9 Billion towards inflation.

But it certainly makes it more difficult to be able to budget properly if we don't have the budget perfectly aligned to inflation. But that's a real difficult problem to do as well to -- for OMB and others to be able to predict well ahead exactly what inflation might be next year.

However, I think the greatest threat to our budget and the things that we're trying to accomplish today actually is if the Congress were not able to pass an appropriations bill on time this year.

And that will unquestionably threaten all the things that we've talked about at this hearing today.

SUSAN COLLINS:

Well, I certainly agree with you on that and I know that the chairman does too. And that's why the sooner we can get information back from you, including June 10th seems awfully far off for the -- the plan. But the sooner we can get responses, the better off that we can be in getting our work done as well.

I want to sincerely thank all three of you for the time you've spent with me and also for your testimony today. Thank you.

JON TESTER:

Thank you, Senator Collins. I will echo -- echo those remarks. We appreciate your service. We appreciate the folks that you represent and the commitment they have to keeping this country the country it is today. I appreciate your testimony. Senators may submit additional written questions and we would ask that you respond to them if you get them in a reasonable amount of time.

Look, I think predictability in the industrial base is really, really important and I think making sure we're getting the biggest bang for the buck by getting -- have competitive contracts and getting these out on time is also very important. And I look forward to working with all three of you, as does Senator Collins, to make sure that when this budget hits the ground, we all know what's in it. And we all know what to expect the results of it are because I think it's a critically important moment in time.

So thank you all for what you do. This defense subcommittee will reconvene next -- no, it will reconvene on Tuesday, April 18th at 10 am to hear from the Air Force. We stand in recess.

 

List of Panel Members and Witnesses:

SEN. JON TESTER (D-MONT.), CHAIRMAN

SEN. DICK DURBIN (D-ILL.)

SEN. DIANNE FEINSTEIN (D-CALIF.)

SEN. PATTY MURRAY (D-WASH.)

SEN. JACK REED (D-R.I.)

SEN. BRIAN SCHATZ (D-HAWAII)

SEN. TAMMY BALDWIN (D-WIS.)

SEN. JEANNE SHAHEEN (D-N.H.)

SEN. CHRISTOPHER S. MURPHY (D-CONN.)

SEN. PATTY MURRAY (D-WASH.) EX-OFFICIO

SEN. RICHARD SHELBY (R-ALA.), RANKING

SEN. SUSAN COLLINS (R-MAINE), RANKING MEMBER

SEN. MITCH MCCONNELL (R-KY.)

SEN. LISA MURKOWSKI (R-ALASKA)

SEN. LINDSEY GRAHAM (R-S.C.)

SEN. JERRY MORAN (R-KAN.)

SEN. JOHN HOEVEN (R-N.D.)

SEN. JOHN BOOZMAN (R-ARK.)

SEN. SHELLEY MOORE CAPITO (R-W.VA.)

SEN. SUSAN COLLINS (R-MAINE) EX-OFFICIO

US MRINE CORPS MARINE CORPS COMMANDANT DAVID H. BERGER

SECRETARY OF THE NAVY CARLOS DEL TORO

US NAVY NAVAL OPERATIONS CHIEF MICHAEL M. GILDAY

 

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**Testimony by:** Adm. Mike Gilday

**Presented on:** 28 March 2023

**Date Published:** 30 March 2023