WASHINGTON – A prediction last year that China could attempt to invade Taiwan in the next six years has put increased pressure on talks between lawmakers and U.S. Navy leadership over how to prioritize fiscal 2022 spending needs.

In addition, the apparent preference of House Armed Services Committee Chairman Rep. Adam Smith, D-Wash., to not increase Defense Department top-line spending and instead find cuts within the department to offset any additional needs is now creating another layer of complexity.

The budget tension was on full display during a June 15 HASC hearing with Chief of Naval Operations Adm. Mike Gilday, Commandant of the Marine Corps Gen. David Berger and Acting Secretary of the Navy Thomas Harker.

“Admiral, you painted a pretty ugly picture for the future of the Navy. Given that fact, do you feel like this budget is adequate to help you take on those challenges?” HASC Ranking Member Rep. Mike Rogers, R-Ala., told Gilday in kicking off his round of questions.

HASC Vice Chair Rep. Elaine Luria, D-Va., said more bluntly, “I understand you were given a shitty top-line by the administration, and specifically the Pentagon; you didn’t have a lot of good choices, but you did have choices.” She then went on to question the Navy’s plan of prioritizing current operations and readiness over growing the fleet.

At heart is the Navy’s calculus that its current operational tempo – dictated ultimately by the secretary of defense in consultation with joint force leaders, and not shaped by the Navy itself – has strained the service but is unlikely to change any time soon. So the Navy in its FY22 request asked for a 2.2 percent increase in operations and maintenance funding, even as it asked for an 8.7 percent decrease in procurement.

To explain why the Navy had to fund operations at the expense of modernization, Gilday said it’s cost the Navy about $250 million to extend four carrier deployments in the Middle East to provide the joint force a permanent carrier presence there since May 2019 — primarily meant to deter Iran from aggressive behaviors — meaning that money couldn’t be spent for shipbuilding or researching future platforms and weapons.

“Those 15 requests for forces that extended four carriers in Central Command for almost a year came at a cost of over a quarter of a billion dollars that we can’t invest in modernization,” Gilday said. “If there’s a reason to keep the carrier there then keep it there, but if there’s not, use another element of the joint force to do the job” and relieve the Navy of that cost.

Gilday told Rogers early in the hearing that the Navy was doing the best it could to keep up current readiness and build out a future fleet while meeting the operational requirements from the Pentagon. He said current Navy top-lines allow for just a 300-ship fleet, putting the 355-ship figure borne out by several studies out of reach.

“What we’re trying to do with our investment strategy is to balance those investments across the readiness of the fleet today; the modernization with new technologies, and that’s reflected as an example with a 12-percent increase in [research and development], with emphasis on hypersonics on the offensive and laser technology on the defensive to protect the fleet; the third piece is capacity,” Gilday answered early in the hearing.

“From what I’m reading, the Navy is shrinking under this budget,” Rogers interrupted.

“Sir, for the 22 budget itself, the Navy’s numbers are declining. That’s correct,” Gilday said, adding that “the last several studies that have been done, going back five years, call for a larger, more capable fleet.”

“And this budget doesn’t get you there,” Rogers said.

“No sir, it does not.”

“Let me ask this: Adm. [Phil] Davidson, the recent [U.S. Indo-Pacific Command] commander, indicated that he expects a conflict with China in the next six years. In your best professional military judgment, do you agree with Admiral Davidson’s assessment?” Rogers continued.

“Sir, I think the keyword that he used there was ‘could.’ And I think that that potential always exists, and I think we have to be ready any given day for anything,” Gilday said.

“Well, you know, if you agree it could happen, I just don’t know why we would agree with anything that would reduce the force structure and induce a near-term risk with China,” Rogers concluded.

Luria expressed similar concerns.

“I feel this budget is focused on a future hope for technology that we will have in order to counter a threat that might happen way out in the future. And I think that many of us in this room here and during this hearing have reflected on the fact that we need that capability today. … I think that we’re creating a gap, and I am really concerned that the Chinese will actually find a way to exploit that gap.”

The Independence-variant littoral combat ship USS Gabrielle Giffords (LCS 10), right, conducts routine operations in the vicinity of the Chinese vessel Hai Yang Di Zhi 4 Hao, July 1, 2020, in the South China Sea. MC2 Brenton Poyser/US Navy.

Still, there are no easy answers. Committee members made clear they wanted the Navy to spend money to keep its current ships in the fleet and properly maintained and modernized; they also want the Navy to invest in buying new ships for the future, to create a larger and more lethal fleet.

To create that future fleet, the Navy had planned to sacrifice fleet size today by divesting older cruisers, Littoral Combat Ships and amphibious dock landing ships that, in the Navy’s estimation, do not have enough combat utility left in them to be worth the increasing cost of maintaining and operating them. If the committee doesn’t let the Navy divest these ships and spend the money on future investments, it’s unclear where that money will come from.

Top-line increase seems unlikely

Smith is ushering HASC through its first National Defense Authorization Act cycle in a decade that didn’t have sequestration looming overhead. In the past, the House and Senate budget committees had to agree to defense and non-defense spending top-lines that had to be carefully adhered to, lest the total budget creep too high and trigger automatic across-the-board cuts.

This year, with sequestration over, there’s intra-party and inter-party fighting over what the right level of defense spending looks like for the Biden administration’s first budget. House Democrats introduced a resolution that calls for about $1.5 trillion in spending in FY22 but does not define the proper amount of military spending due to an ongoing split within the party, Defense News reported.

Smith has sought forestall an “epic fight” over the defense spending top-line, saying it’s better to focus on how to spend the money effectively.

Citing past spending decisions that he called wastes – the Zumwalt-class destroyer program, the Littoral Combat Ship program, the F-35 Joint Strike Fighter program, and a mixed oxide fuel fabrication facility in South Carolina that spent $7 billion before ultimately being canceled – Smith said during the hearing that “there is concern, and part of the reason I know that President [Joe] Biden gave such a tight number is we’re tired of wasting money.”

Smith said of the Marines’ decision to self-fund their Force Design 2030 efforts via divest-to-invest, “that’s not some sort of profound personal sacrifice; that’s smart. Because no matter what you’re doing, there’s no doubt that there’s money in there that’s being wasted, that isn’t being used properly. So yes, we could just give you another $30 billion, another $40 [billion], another $50 [billion], another $100[billion]; the question is, what are you doing right now that you don’t need to be doing?”

Gilday pointed to Aegis Ashore missile defense sites that will run in Romania and Poland and possibly Guam: “we’ve got sailors protecting dirt, that’s not what we do,” he said, adding that a different military service should take over that mission despite it being based on the Navy’s Aegis Combat System that’s fielded on cruisers and destroyers.

Additionally, Gilday said, “we’re trying to decommission those 15 ships akin to what Gen. Berger is doing; we are trying to fund modernization from the inside.”

“The cruisers right now [in their modernization program] are running 175- to 200-percent above estimated cost. Hundreds of days delayed. These ships were intended to have a 30-year service life; we’re out to 35. They’re not easy decisions to make, and I accept the counter argument that we should keep these ships based on Adm. Davidson’s comments, but at some point we need to” be allowed to get rid of them and reinvest the savings, the Navy’s top officer told Smith.

Divest-to-invest strategies for Navy and Marines

The Marine Corps’ divest-to-invest plans have been better received than the Navy’s for the past year or two – though the commandant made clear the service has reached the end of the divestment phase, and anything else Congress wants the service to do must come with additional money.

“We have wrung just about everything we can out of the Marine Corps internally. We’re at the limits of the risk that you addressed. We’ve reduced end strength, we’ve divested of legacy systems, we’ve taken every measure we can, to include a 15-percent cut in our headquarters; we’ve wrung it dry,” Berger said. “We’re driven by a pacing threat … that we don’t control the pace at which they go. And neither me nor the CNO want to transfer risk onto the backs of a combatant commander. …. We have to be ready every day, every week, and the best insurance policy we have is a naval expeditionary force that’s forward. We’re at the limits of what I can do internally right now.”

Rep. Rob Wittman, R-Va., asked if additional money was needed.

“My only other option is to reduce the end strength of your Marine Corps even further, and I think that’s unacceptable risk,” Berger said.

Earlier in the hearing, he told Rogers that he could accomplish Force Design 2030 within the budget set forth by the Pentagon, but items on the Marine Corps’ unfunded priorities list would help transform the Marines to a more agile and lethal force faster – addressing concerns that China may not wait until 2030 to attack Taiwan.

“In a pacing environment like we’re in right now, it’s tough to forecast whether or not China will move faster or on the same glideslope they’re on. We’re self-funding our modernization, as I explained. The items on the unfunded priority list would reduce the risk; it would allow us to move faster,” Berger said. “If we’re going to stay in front of China with a margin of advantage, then I think everything we can do in the Department of Defense to buy down that risk is in our favor.”

Despite a recent fire onboard, guided-missile cruiser USS Antietam (CG 54) steams ahead during Tuesday's air power demonstration, taking part in a five-inch gun shoot. (U.S. Navy photo by Mass Communication Specialist Seaman Apprentice Oswald Felix Jr.)

For the Navy’s part, though, a divest-to-invest strategy that involves cutting ships has never been well received in recent years, with the China/Taiwan concern furthering the challenge of getting this plan past Congress.

“It’s not prudent to decommission 15 ships in the next year when China could invade Taiwan in the very near term,” Luria told Gilday.

Earlier in the hearing, Gilday had said that, based on past and current investments, “what do we plan to deliver in 2025 and 2026? If I take a look at the undersea, we’ll have delivered all of our Block III Virginias [attack submarines], we’ll have delivered all of our Block IV Virginias, we’ll be on the cusp of delivering Block Vs, and we’ll have a longer-range more lethal undersea weapon. On the surface, we’ll be delivering the Constellation-class frigate, we’ll be building DDG(X), we’ll be putting more Flight III DDGs in the water. By 2025, our plan is to have hypersonics in the Zumwalt-class destroyers. We are making continued investments in weapons with range and speed – think tactical Tomahawk. If I look at aviation … we’ll have [a blend of fourth-generation F/A-18E-F Super Hornets and fifth-generation F-35C Joint Strike Fighters] in half of our air wings, six of our air wings, more than half of our air wings, by 2025, with longer-range weapons with speed.”

But those advances would come as the overall fleet size shrank, between the near-term decommissionings and the fact that the Navy isn’t building ships at a high-enough rate to replenish them.

Luria noted that a previous divest-to-invest effort pitched in 2004 was meant to free up money to support programs at the heart of the Navy’s Sea Power 21 plans: Zumwalt destroyers, of which there are only three today due to acquisition and cost challenges; LCS, which are still only being deployed in small numbers today; and a ForceNet network that never came to fruition. She said she worried today’s plans to ditch cruisers to invest in future unmanned surface vessels and a new network under Project Overmatch would meet a similar fate.

“We’re looking at this Battle Force 2045, a plan that’s far off, a 355-ship goal that we’re never going to get to if we decommission more ships every year than we actually build. And it causes a great concern because I think there’s an urgency – what are we going to do in 2025 to counter this threat?” Luria asked. “We’re continuing to shrink, and we’re continuing to divest-to-invest with strategies and capabilities that are just a hope for the future.”

Joe Gould contributed to this report.

Megan Eckstein is the naval warfare reporter at Defense News. She has covered military news since 2009, with a focus on U.S. Navy and Marine Corps operations, acquisition programs and budgets. She has reported from four geographic fleets and is happiest when she’s filing stories from a ship. Megan is a University of Maryland alumna.

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