The Budget Year Ahead: Hill to Cast Piercing Light on Navy Cost-Cutting

With lawmakers concerned that the Pentagon’s ambitious long-term plans may not match fiscal reality, Capitol Hill is expected to zero in on the military’s ability to keep costs at bay on many of its priciest technology transformation programs.

Naval programs, long subject to intense congressional oversight, will not be spared, with defense authorizers and appropriators expected to scrutinize whether the Navy can develop and produce its multibillion-dollar platforms within cost goals.

Across the board, lawmakers are becoming increasingly concerned that federal budget constraints will impede the Defense Department from meeting its lofty vision of creating a high-tech force capable of fighting a broad swath of threats, ranging from large state enemies to terrorists, insurgents and other unpredictable adversaries.

Just days after President Bush sent his sprawling $439.3 billion defense budget to Congress, several Senate defense authorizers were questioning Pentagon leaders on whether there will be enough money in this era of federal belt-tightening to meet all of the technological goals spelled out in the department’s recently released Quadrennial Defense Review (QDR).

“We’re forcing the department, both in the budget and in the QDR, to make resource-constrained, budget-constrained decisions,” Sen. Joseph Lieberman, D-Conn., said during a Senate Armed Services Committee hearing Feb. 7. The Pentagon, he added, is putting Congress in the “untenable position,” forcing lawmakers to either increase defense spending dramatically or cut some programs.

“We’re in a transition period now where all three services are bringing online platforms that are going to sustain them for another generation,” Missouri Republican Sen. Jim Talent, chairman of the Senate Armed Services Seapower Subcommittee, said in an interview. “This reduction comes at a very bad time.”

Budget pressures are strained even further by burgeoning military personnel costs, due in large part to skyrocketing Tricare healthcare costs and increased bonuses for active and reserve military, said one senior Navy official. That leaves acquisition dollars — considered the low-hanging fruit in the Pentagon budget — the most likely target for cuts.

“No one wants to get up and say we don’t want to give benefits,” the official said. “You end up closing any discretionary areas of funding.”

The official added he “absolutely” expects pressure to be greater during budget hearings this year than last, when defense authorizers capped the cost of the fifth DD(X) at $2.3 billion. The House had recommended a more stringent $1.7 billion cap, but succumbed to Senate pressure to set a more attainable limit.

“That’s what everyone’s preparing for — ways to make the prices more reasonable and to clamp down on the pricing, rather than building more advanced quality,” the official said.

For the Navy, budget constraints mean that cost controls will go “hand in hand” with growing its fleet from 285 to 313 ships during the next five years, Talent said.

In this year’s round of budget talks, Talent predicted that questions on acquisition reform in Congress, the Navy and the shipbuilding industry will be central to the debate, as opposed to the more traditional and parochial concerns surrounding the make up of the fleet.

“If we don’t reverse this trend [of escalating costs], we’ll be down to 200 ships,” he said.

Republican Sen. Susan Collins, whose home state of Maine has a strong Navy and shipbuilding presence, agreed somewhat with Talent’s assessment, but added that committing to a long-term shipbuilding plan is the key to reining in those per-ship costs.

Shipbuilders have long bemoaned volatile and ever-changing budgets, saying it frustrates their planning processes and prevents them from keeping overhead and other costs at reasonable levels.

“It’s the unpredictability of funding that makes it difficult to plan in an efficient way,” Collins said.

Former defense officials and budget analysts also weighed in on the issue, stating that costs — perhaps even more than strategic needs — will decide whether the Navy gets its 313 ships.

“Controlling shipbuilding costs is going to be a crucial element of reaching the [chief of naval operations’] total force goals,” said former Pentagon comptroller Dov Zakheim. “And I think that the Congress does share, and will share, the concern about the size of the fleet.”

Of all the services, the Navy has the “cruelest problem,” said Gordon Adams, former Office of Management and Budget associate director of national security programs.

When you start getting into $3 billion for the next-generation DD(X) destroyer or approximately $8 billion plus design costs for the next-generation aircraft carrier “those two programs alone are larger than the [shipbuilding and conversion] budget for the Navy” in any single year, Adams said.

Marines Draw Lines of Command for Special Ops

As the size and structure of the Marine Corps’ component of the Special Operations Command comes into focus, uncertainties remain about how command and control over the units will be exercised. Several commanders will have authority to draw on the resources of the new Marine unit.

“When that Marine Special Operations Company (MSOC) deploys with a Marine Expeditionary Unit (MEU), the intent is operational control will be with the Theater Special Operations Commander, and tactical control will be with the MEU,” said Brig. Gen. Dennis J. Hejlik, commander of Marine Corps Special Operations Command, at a Pentagon press round table. 

Scalable in size and firepower, an MEU is the Marines’ principal warfighting organization.

“What that means is the [theater commander] has the ability to task different parts of them. If the MSOC is not being used by the [theater commander], the MEU commander can use them as necessary to increase the capabilities of the MEU. We’re still working out those issues,” Hejlik said.

Also to be worked out is the relationship between the Special Operations Company and the Expeditionary Strike Group commander.

“The intent is not just to rip the guts out of the MEU,” Hejlik said. “We like to say that they’re not separate, but separable.”

What is certain about Marine Special Operations Command is that it will grow to 2,600 Marines during the next five years — all taken from the service’s end strength. The command was set to stand up Feb. 24 at Camp Lejeune, N.C.

Eventually, there will be two Marine Special Operations Battalions, at Lejeune and Camp Pendleton, Calif. Those battalions will comprise nine MSOCs, made up of about 97 to 118 Marines each. Four will be at Lejeune and five at Pendleton, one of which will support III Marine Expeditionary Force and Pacific Command in Okinawa. These companies will have no dedicated aviation components, Hejlik said.

He said the Foreign Military Training Unit, a component of the Marine Special Operations Command that will provide training and advisors to foreign militaries, already had three 12-man teams ready to go with the goal of having 24 ready by 2008. Hejlik said the first team probably would deploy in the third quarter of 2006.

The core of the MSOCs will be the force reconnaissance Marine, but through a Marine Special Operations Support Group, also based in Lejeune, specialists in areas such as signal intelligence, human intelligence and explosive ordnance disposal could be added to the MSOCs as the missions require.

While Marines would train up to meet several of the nine Special Operations core tasks, they will not train to the level of Special Operations Command’s small mission units.

Ideally, Hejlik said, Marines would spend three to five years at Special Operation Command and then rotate back to the “mainstream” Corps, though they would have the option of staying in longer on a case-by-case basis.

According to Hejlik, the first MSOC will come on line in May, train with the 26th MEU and deploy in late 2006.

“I firmly believe that this is the right thing to do for the country at this time,” he said. “This irregular warfare is here to stay.”

Coast Guard Seeks $934 Million for Deepwater

Coast Guard Commandant Adm. Thomas H. Collins in early February sent Congress a review of the Revised Deepwater Implementation Plan in conjunction with the president’s 2007 budget request.

The report contains a comparison between Coast Guard legacy assets and Deepwater assets, a comprehensive explanation of costs associated with Deepwater, and human resources needs.

The Integrated Deepwater System is a Coast Guard effort to improve post-9/11 readiness by delivering platforms, such as surface and aviation assets and communications and logistics systems. The 25-year, $24 billion acquisition program began in 1998.

The Coast Guard’s proposed changes for 2007 include increased funding for Deepwater assets — particularly its Maritime Patrol Aircraft, Eagle Eye vertical-takeoff-and-landing unmanned aerial vehicle and conversion of the HH-65 to a multimission cutter helicopter — communications upgrades to the HC-130H transport aircraft, expedited introduction of the more-capable HC-130J to the fleet by one year, and increases to aviation use of force, program management and logistics funding.

The report also lays out decreased costs for some line items “to align with the Congressional appropriation for fiscal year 2006.” This included sustainment of, and upgrades to, the HH-60 helicopter, relating the reduction to the increase in funding for the HH-65 that is seen as a “higher operational priority.”

The total dollar increase for proposed changes to the program for 2007 is approximately $200 million above its budget estimate provided last summer. The Coast Guard’s budget for 2007 includes $934 million for the Integrated Deepwater System.

Intelligence Chief Awaits Report on Deep Red

Deep Red, the Navy’s new internal think tank for tactical intelligence, will deliver a strategic report in March to Rear Adm. Robert B. Murrett, director of Naval Intelligence, to lay out its missions and goals.

Requested by the chief of naval operations (CNO), the report is a key step toward establishing the purpose and structure of one of the Navy’s newest offices, and is being written with the advantage of more than a year of experience working with the Office of Naval Intelligence (ONI) and the “OpNav” staff that supports the CNO.

A counterpoint to the Navy’s better-known Deep Blue office that engages in broader issues, Deep Red was conceived in early 2004 by then-CNO Adm. Vern Clark who wanted more intelligence analyses about potential adversaries. David Cattler, program manager for Deep Red, told Seapower the office was developed in response to Clark’s call for more information on questions such as: “Who are my adversaries? What are they influenced by? And how might they come at me?”

In November 2004, Deep Red initially comprised a two-person office. But 10 billets, two military officers and eight civilian posts, were added the following month. The office staff is divided between Crystal City, Va., and the Pentagon.

Cattler touts the small bureaucratic nature of the organization and says collaboration on project-specific assignments with ONI will increase in the future. He described Deep Red’s role in the intelligence enterprise as providing “devil’s advocacy for baseline intelligence decisions.”

Shipbuilding Ally Lott To Make Another Run

Mississippi Republican Sen. Trent Lott’s decision last month to make another run for Congress is good news for shipbuilders, who have long relied on the former majority leader’s heft in Congress to push their programs through.

Maine colleague Susan Collins likewise said his decision is a “very positive development” for the supporters of Navy programs.

“He’s a great ally to have,” Collins said, adding that she worked with Lott last year to successfully push through language in the defense authorization bill that blocks the single-shipyard approach for the DD(X) destroyer program. The Navy plans to build DD(X) in Mississippi and Maine.

Lott, the former Senate majority leader who also has served on the Armed Services Committee, will run for his fourth term this year. He handily won his last election, garnering 66 percent of the vote.

Reporting by Seapower Correspondent Megan Scully. Associate Editor Matt Hilburn and Assistant Editor David W. Munns contributed to this report.