DoD FY '13 Budget Proposal: $13B/Year in Shipbuilding

Tuesday, February 14, 2012
President Barack Obama sent Congress a proposed defense budget of $613.9 billion for fiscal 2013, Feb. 13. 
The request for the Department of Defense (DoD) includes $525.4 billion in discretionary budget authority to fund base defense programs and $88.5 billion to support Overseas Contingency Operations (OCO), primarily in Afghanistan.
Of the discretionary budget, $155.9 billion represents the Department of the Navy's budget request. This is a decrease of $1.4 billion from last year's baseline appropriation. 
Rear Adm. Joseph Mulloy, deputy assistant secretary of the Navy for budget, briefed media at the Feb. 13 DoD budget press conference about the Navy portion of the budget.
Mulloy said that during budget deliberations, a premium was placed on the Navy's presence in the Asia-Pacific region and the Middle East and took into account innovative methods to generate more forward presence with a smaller and leaner force while retaining the ability to surge as needed. Following the Defense Strategic Guidance, Mulloy said Navy's budget was built by applying the tenets of warfighting first, operate forward, and be ready. As a result, he believes the force will be leaner, agile, flexible, ready and technologically advanced while retaining core Navy-Marine Corps warfighting capabilities to operate forward, preserve the peace, respond to crises, and protect U.S. and allied interests.
The $525.4 billion for the base DoD budget includes cuts and other initiatives that will reduce planned spending by $259 billion over the next five years and $487 billion over ten years, levels that are consistent with the Budget Control Act. The budget adjusts programs that develop and procure military equipment; begins to re-size ground forces; slows the growth of compensation and benefit programs; continues to make better use of defense resources by reducing lower-priority programs, and restructures the defense organization to achieve more efficient approaches to doing business.
Defense officials say the DoD budget request focuses on funding priorities for a 21st century defense that protects the country and sustains U.S. global leadership. It reflects the need for DoD and the military to adapt in order to proactively address the changing nature of the security environment and to reflect new fiscal realities.
 
Highlights of the Navy budget proposal include:
-- Investment of approximately $13 billion per year in shipbuilding, resulting in 41 new-construction ships across the Future Years Defense Plan (FYDP). Although a decrease from the President's FY12 Budget, the investment strives to maintain a healthy industrial base to ensure future innovation and technological advantage.
-- Overall battle force ships will be 284 in FY13. Shipbuilding budget changes will result in a Navy fleet size of more than 280 ships by the end of the five-year plan
-- The ordering date of the future John F. Kennedy (CVN 79) has not changed; signing of the detailed design and construction contract in FY13 will remain on schedule. The construction schedule will be moved back two years in order to decrease pressure on the shipbuilding budget without impacting force structure. CVN 79 is the numerical replacement for USS Nimitz (CVN 68) and will be delivered no later than 2022 in order to maintain the 11-carrier force structure. 
-- The department remains committed to a 55-ship LCS class. However, due to fiscal constraints, procurement has been slowed across the FYDP, reducing LCS by two ships, one of each variant.
-- The first year of full funding for LHA 8 will be moved from FY16 to FY17. The impact is minimal since LHA 8 also has advance procurement funding in FY15 and FY16. Construction and delivery timelines are not affected. LHA 8 is anticipated to be operational approximately one year after delivery in the FY25 timeframe.
-- Retirement of seven guided missile cruisers: USS Cowpens (CG 63), USS Anzio (CG 68), USS Vicksburg (CG 69), USS Port Royal (CG 73), in FY13; and USS Gettysburg (CG 64), USS Chosin (CG 65) and USS Hue City (CG 66) in FY14. Two Amphibious Dock Landing Ships will also be retired during the FYDP: USS Whidbey Island (LSD 41) and USS Tortuga (LSD 46). All nine ships will be retired before the end of their service lives which is consistent with working more efficiently and cost-effectively in this resource-constrained environment.
-- Support for development efforts for the Ohio class replacement program continue, but at reduced levels. Virginia class procurement was reduced in the FYDP from 10 SSNs to nine (delayed procurement of 1 SSN from FY14 to FY18). To mitigate the large undersea strike capacity lost when SSGN retires in 2026-2028, the Navy is investing in research and development for the Virginia Payload Module. 
-- The Department continues to procure aircraft at sufficient levels to meet fielding and combat requirements with manageable risk (765 aircraft across the FYDP). However, many programs have been delayed or reduced. Joint Strike Fighters (F-35 B/C) are reduced by nearly 50 percent across the FYDP (21 F-35B and 48 F-35C models reduced). Additional reductions include P-8A, MV-22B, MH-60R, and KC-130J.
-- While funding for unmanned aerial vehicles has been reduced, it remains robust despite a delay in the Unmanned Carrier Launched Airborne Surveillance and Strike program and termination of the Medium Range Maritime Unmanned Aerial System.
-- The proposed budget protects development of new sea-based intelligence, surveillance, and reconnaissance (ISR) systems and other maritime capabilities (Fire Scout, Small Tactical Unmanned Air System, and Broad Area Maritime Surveillance).
-- The budget proposal reflects the department's commitment to taking care of its Sailors, Marines, Civilians and their families and continues the investments needed to ensure they remain the world's premier maritime force. A 1.7 percent military basic pay increase that reflects the economic conditions of the country is proposed in FY13 and FY14. Pay growth is slowed in FY15 and beyond over the FYDP to achieve more control over personnel costs while also keeping pay competitive. 
The separate OCO budget totals $88.5 billion, $26.6 billion below the fiscal 2012 enacted budget of $115.1 billion. The proposed budget reflects the withdrawal of combat troops from Iraq in December 2011, as well as savings due to operational progress in Afghanistan and the transition to Afghan responsibility for security.
 
To view the proposed FY 2013 DoN budget documents, visit http://www.finance.hq.navy.mil/fmb/13pres/books.htm
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