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Assessing the Navy’s Composition and Cost in a Time of Uncertainty By John Schaus

Less than a week before the Defense Department budget is rolled out, the U.S. Navy released a white paper, “The Future Navy.” The document presents the Navy’s argument for the 355 ships its 2016 Force Structure Assessment said were required. This force, approximately 80 ships greater than today’s Navy fleet, is largely consistent with three congressionally required independent assessments of Navy force structure that were also released last year. A larger navy seemingly has support from the president as well, who spoke on the campaign trail of his intent to grow the navy to 350 ships.

How much will such a Navy really cost, and will the release of next week’s Defense Department budget give the Navy the resources to build such a fleet? The white paper offers some detail on how buying the ships on more regular schedules would provide a lower cost per ship and provide a larger fleet at the same time. What is missing, however, are details on what the impact of a larger force would be on the overall Navy; for example, how many people would the Navy need, and what changes to operations and sustainment accounts should be expected?

The International Security Program at CSIS has developed a publicly available tool for anyone to model the size and composition of the Navy’s 30-year shipbuilding plan and to see the associated acquisition, ongoing operational, and personnel costs, in constant FY2016 dollars. Try it here.

Q1: How much does the existing 308-ship plan cost, and what might a 355-ship plan cost?

A1: In FY2016, the Defense Department received about $18 billion for shipbuilding, which puts it on track to grow the Navy to 308 ships by FY2021, though the force would fall—and remain—below 308 ships from FY2029 onward. Based on the CSIS tool, the Navy would need approximately $4.1 billion per year more in acquisition funds to build its proposed 355-ship plan as compared with the previous 308-ship plan. The Congressional Budget Office (CBO) published an assessment of the expected cost to build the Navy’s 355-ship fleet, finding that it would likely cost on average $5.4 billion more per year over 30 years than the Navy’s 308-ship plan—CBO includes an adjustment for expected future cost growth in acquiring ships that our tool does not yet include.

Q2: What is the total cost of a 355-ship Navy?

A2: The total cost is hard to pin down precisely. In addition to the number of ships procured, one must also consider the cost of operating and maintaining the ships and the people needed to operate them. Based on the CSIS tool, a 355-ship fleet could cost nearly $7.5 billion per year more to operate than the 308-ship plan.

Q3: Will the budget be clear on whether the Navy is going to grow to 355 ships?

A3: It might be. If the budget includes significant increases to the shipbuilding account, and for long lead time investments, that would be a strong indicator. However, it is possible that the FY2018 budget will not include a detailed future years defense program (FYDP, or the five-year budget plan), and so the long-term plan for the Navy may not be clear until the FY2019 budget is released next year. Early reports suggest the Navy will add only one ship in the coming fiscal year.

Q4: The U.S. Navy is already the world’s largest Navy. Do we really need more ships?

A4: Again, the answer depends. If one believes that the United States may have to defend its interests and security commitments across the globe, having U.S. Navy sailors, and their ships, nearby when needed is an important capability to have available. If one believes that the United States should take on less global responsibility, one would probably determine that the nation is better served by a smaller (and likely lower-cost) Navy. A more important question than the total number of ships is what capabilities the ships need to have. The CSIS tool allows you to look at the total tonnage, number of vertical launch system (VLS) missile cells, and aircraft capacity of the fleet you design—each of which are important factors to consider.

Whatever your view, I encourage you to try out the CSIS Navy fleet calculator tool and submit your proposed Navy to our team. If we get enough responses, we will follow up with analysis of what people submit.

John Schaus is a fellow with the International Security Program at the Center for Strategic and International Studies in Washington, D.C.

Critical Questions is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).

© 2017 by the Center for Strategic and International Studies. All rights reserved.

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