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US Rep. Expects Congress to Add Ships to Defense Budget

January 12, 2007

U.S. Rep. Gene Taylor, D-Miss., said that lawmakers will try to add extra ships to the Navy budget, in addition to whatever the Pentagon requests, The Marketplace reported. Taylor said that President George W. Bush isn't fully focused on military needs as the White House prepares its 2008 budget proposal. As a result, Congress ought to use earmarks or other tools to step in, he said.

Taylor is a member of the House Armed Services Committee and leads its subcomittee in charge of shipbuilding. Democrats have renamed this panel the Seapower and Expeditionary Forces Subcommittee, replacing its Republican-era moniker as the "Projection Forces" panel. Congress will hold hearings to decide what types of ships the Navy needs, Taylor said. Last year, the House of Representatives approved legislation to authorize two extra destroyers in 2007, but the ships were not part of the final budget approved by the Senate and signed into law. Taylor said the House Armed Services Committee chairman, Rep. Ike Skelton, D-Mo., agrees on the need for more ships.

Any shipbuilding decisions will have a big impact on Northrop Grumman Corp. (NOC) and General Dynamics Corp. (GD), the two companies that own the six major U.S. shipyards. Lockheed Martin Corp. (LMT) also will be affected, since it is overseeing construction of one of the Navy's Littoral Combat Ship designs. Taylor said Congress needs to make sure these coastal patrol ships aren't crowding out bigger vessels like cruisers and destroyers in budget plans. The Navy sought to stabilize its shipbuilding program through long-term planning, in an effort to stem the cost increases and schedule delays caused by frequent priority changes.

Congress should take a close look at services provided by companies such as Bechtel Group Inc. and Halliburton Co. (HAL), along with its former subsidiary KBR Inc. (KBR), in Iraq and also on the U.S. Gulf Coast after 2005's Hurricane Katrina. Traditional defense contractors also need more scrutiny, Taylor said.

Taylor said he was pleased with the way the issue resolved itself - with Northrop Grumman getting modernization assistance to help it reset after the hurricane - but that companies can't ask for a blank check. In his remarks to the Surface Navy Association, Taylor said the Navy should reduce its dependence on foreign oil by building more nuclear-powered ships. He said the extra cost of adding nuclear power to the Navy's next-generation cruiser, which is still in early planning stages, would be a worthy investment in the Navy's long-term future. Source: Marketplace

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