Statement of Eric J. Labs on the Navy¿s plans for its shipbuilding programs and corresponding budget. Contents: (1) Changes in Ship Requirements Under the 2011 Plan; (2) Ship Purchases and Inventories Under the 2011 Plan: Combat Ships; Logistics and Support Ships; (3) Ship Costs Under the 2011 Plan: The Navy¿s Estimates; CBO¿s Estimates; Changes from the 2009 Plan; (4) Outlook for Individual Ship Programs; Aircraft Carriers; Submarines; Large Surface Combatants; Littoral Combat Ships; Amphibious Ships. Charts and tables. This is a print on demand edition of an important, hard-to-find publication.

Discusses the U.S. Navy¿s proposed FY 2010 budget requests funding for eight new Navy ships. This total includes two relatively expensive, high-capability combatant ships (a Virginia-class attack submarine and a DDG-51 class Aegis destroyer) and six relatively inexpensive ships (three Littoral Combat Ships [LCSs], two TAKE-1 auxiliary dry cargo ships, and one Joint High Speed Vessel [JHSV]). Concerns about the Navy¿s prospective ability to afford its long-range shipbuilding plan, combined with year-to-year changes in Navy shipbuilding plans and significant cost growth and other problems in building certain new Navy ships, have led to concerns about the status of Navy shipbuilding and the potential future size and capabilities of the fleet. Illus.

The Dept. of Defense (DoD) generally issues annual reports that describe its plan for building new ships over the next 30 years. DoD submitted its 2014 shipbuilding plan to the Congress in May 2013, covering FY 2014 to 2043. This plan reflects the Navy's most recent goals for battle force ships -- goals that were developed in 2012 and outlined in a report to the Congress in Jan. 2013; that analysis is hereafter referred to as the 2012 force structure assessment. The goals developed in 2012 were slightly different from the ones that were outlined in the 2005 force structure assessment and were reflected in the Navy's shipbuilding plans up through last year. This report examined the 2014 plan in detail and estimated the costs of the proposed ship purchases using its own estimating methods and assumptions. It also analyzed how those ship purchases would affect the Navy's inventories of various types of ships over the next three decades. Tables and figures. This is a print on demand report.

As directed by the Congress, every year the Navy submits a report with the President's budget that describes the planned inventory, purchases, deliveries, and retirements of the ships in its fleet for the next 30 years. In this report, the Congressional Budget Office analyzes the Navy's fiscal year 2019 shipbuilding plan and estimates the costs of implementing it. 1. Inventory. The Navy currently has 285 battle force ships, but it aims to build and maintain a 355-ship force. 2. Purchasing Plan. The Navy plans to purchase 301 new ships between 2019 and 2048: 245 combat ships and 56 support ships. If the Navy adheres to the schedule for retiring ships outlined in the 2019 plan, it would not meet its goal of 355 ships at any time over the next 30 years. 3. Fleet Size. After releasing its shipbuilding plan, the Navy announced that it would extend the service life of its destroyers from 35 or 40 years to 45 years and that it would extend the service life of up to 7 attack submarines from 33 to 43 years. With those service life extensions, the fleet would reach 355 ships in 2034 but would fall short of the Navy's specific goals for some types of ships. 4. Fleet Cost. Buying the new ships would cost an average of $26.7 billion per year in 2018 dollars, CBO estimates. If all costs associated with the Navy's shipbuilding budget are included, such as the cost of refueling nuclear-powered aircraft carriers or outfitting new ships with various small pieces of equipment after they are built, CBO estimates that the total shipbuilding budget would average $28.9 billion per year, one-third more than the Navy's estimate. 5. Comparison With Previous Budgets. That total is 80 percent more than the average shipbuilding budget the Navy has received over the past 30 years and about 50 percent more than the average budget of the past 6 years, a period of increasing shipbuilding appropriations.

The current and planned size and composition of the Navy, the rate of Navy ship procurement, and the prospective affordability of the Navy's shipbuilding plans have been oversight matters for the congressional defense committees for many years. On December 15, 2016, the Navy released a new force-structure goal that calls for achieving and maintaining a fleet of 355 ships of certain types and numbers. Key points about this new 355-ship force-level goal include the following: -- The 355-ship force-level goal is the result of a new Force Structure Assessment (FSA) conducted by the Navy. An FSA is an analysis in which the Navy solicits inputs from U.S. regional combatant commanders (CCDRs) regarding the types and amounts of Navy capabilities that CCDRs deem necessary for implementing the Navy's portion of the national military strategy, and then translates those CCDR inputs into required numbers of ships, using current and projected Navy ship types. The analysis takes into account Navy capabilities for both warfighting and day-to-day forward-deployed presence. The Navy conducts an FSA every few years, as circumstances require, to determine its force-structure goal. -- The new 355-ship force-level goal replaces a 308-ship force-level goal that the Navy released in March 2015. The actual size of the Navy in recent years has generally been between 270 and 290 ships. -- The figure of 355 ships appears close to an objective of building toward a fleet of 350 ships that was announced by the Trump campaign organization during the 2016 presidential election campaign. The 355-ship goal, however, reflects the national security strategy and national military strategy that were in place in 2016 (i.e., the Obama Administration's national security strategy and national military strategy). A January 27, 2017, national security presidential memorandum on rebuilding the U.S. armed forces signed by President Trump states: "Upon transmission of a new National Security Strategy to Congress, the Secretary [of Defense] shall produce a National Defense Strategy (NDS). The goal of the NDS shall be to give the President and the Secretary maximum strategic flexibility and to determine the force structure necessary to meet requirements." -- Although the 355-ship plan includes 47 more ships than the previous 308-ship plan, CRS notionally estimates that achieving and maintaining the 355-ship fleet could require adding 57 to 67 ships, including 19 attack submarines and 23 large surface combatants, to the Navy's FY2017 30-year shipbuilding plan, unless the Navy extends the service lives of existing ships beyond currently planned figures and/or reactivates recently retired ships. -- CRS estimates that procuring the 57 to 67 ships that might need to be added the 30-year shipbuilding plan to achieve and maintain a 355-ship fleet - a total that equates an average of about 1.9 to 2.2 additional ships per year over the 30-year period - could cost an average of roughly $4.6 billion to $5.1 billion per year in additional shipbuilding funds over the 30-year period, using today's shipbuilding costs. These additional shipbuilding funds are only a fraction of the total additional cost that would be needed to achieve and maintain a 355-ship fleet instead of 308-ship fleet. -- If defense spending in coming years is not increased above the caps established in the Budget Control Act of 2011, or BCA (S. 365/P.L. 112-25 of August 2, 2011), as amended, achieving and maintaining a 355-ship fleet could require reducing funding levels for other DOD programs. -- Navy officials have stated that, in general, the shipbuilding industrial base has the capacity to take on the additional shipbuilding work needed to achieve and maintain a 355-ship fleet, and that building toward the 355-ship goal sooner rather than later would be facilitated by ramping up production of existing ship designs rather than developing and then starting production of new designs.

The Navy is required by law to submit a report to the Congress each year that projects the service's shipbuilding requirements, procurement plans, inventories, and costs over the coming 30 years. Since 2006, the Congressional Budget Office (CBO) has been performing an independent analysis of the Navy's latest shipbuilding plan at the request of the Subcommittee on Seapower and Expeditionary Forces of the House Armed Services Committee. This CBO report, the latest in that series, summarizes the ship requirements and purchases described in the Navy's 2011 plan and assesses their implications for the Navy's funding needs and ship inventories through 2040. The new plan appears to increase the required size of the fleet compared with earlier plans, while reducing the number of ships to be purchased, and thus the costs for ship construction, over the next three decades. Despite those reductions, the total costs of carrying out the 2011 plan would be much higher than the funding levels that the Navy has received in recent years.

This is an independent analysis of the Navy's latest shipbuilding plan. This study summarizes the ship inventory goals and purchases described in the Navy's FY 2012 plan and assesses their implications for the Navy's funding needs and ship inventories through 2041. The Navy currently envisions buying a total of 275 ships during the next 30 years at an average annual cost of nearly $16 billion (in 2011 dollars) for new construction alone or a little more than $17 billion for total shipbuilding. By comparison, this report estimates that the cost of the Navy¿s plan will average $18 billion per year for new construction or $20 billion per year for total shipbuilding. Charts and tables. This is a print on demand report.