This morning I testified before the Senate Armed Services Committee (SASC) on our budget plan for 2014 and the continuing effects of sequestration. The following is my opening statement:
Chairman Levin, Senator Inhofe, and distinguished members of the committee thank you for the opportunity to testify on the short and long term effects of sequestration, and our perspective on the Strategic Choices And Management Review. This morning I will address two main points: Our budget situation and plan for FY14, and near & long-term impacts of sequestration.
Mr. Chairman, presence- that remains the mandate of our Navy. We have to operate forward where it matters, and be ready when it matters. And we have to be able to respond to contingencies. Recent events this year alone have clearly demonstrated our ability to do that – Navy assets were on station within a few days, wherever needed, and offered options to the president when the situation in North Korea, Egypt and Syria dictated. This ability to be present reassures our allies, and ensures that U.S. interests around the world are properly served.
OUR BUDGET STRATEGY FOR FY 14
In fiscal year 2014, sequestration will further reduce our readiness and surely reduce our ship and aircraft investment. The Budget Control Act revised discretionary caps will preclude our ability to execute the 2012 defense strategic guidance in both the near term and the long term. Restrictions associated with a continuing resolution preclude transferring funds across programs, increasing needed program quantities and starting important new programs.
The impacts of sequestration will be realized in 2 main categories: readiness and investment.
There are several operational impacts, but the most concerning to me is that the reductions in operations and maintenance will result in only 1 non-deployed carrier strike group and 1 amphibious ready group trained and ready for contingency response. Our covenant with the combatant commanders is to have at least 2 CSG and 2 ARG deployed, and another three of each in or around the continental United States, ready to respond to a crisis on short notice. So, for example, right now we have one CSG deployed in both the Arabian Gulf and Western Pacific, and our one response CSG, Nimitz, is in the Eastern Mediterranean. Consequently, because of fiscal limitations we do not currently have another CSG trained and ready to respond on short notice in case of a contingency. We’re tapped out.
We will be forced to cancel aircraft and ship maintenance. This will inevitably lead to reduced life of our ships and aircraft.
Ashore, we will conduct only safety-essential renovation of facilities, further increasing the large backlog in that area. We will be compelled to keep a hiring freeze in place for most Civilian positions that will further degrade the distribution of skill, experience and balance in our Civilian force, which is so critical.
We will not be able to use prior-year funds to mitigate sequestration cuts in our investment accounts, as we did in FY 2013.
Without congressional action, we will be required to cancel planned procurement of a Virginia-class submarine, a littoral combat ship, and an afloat forward staging base (ship). And, we will be forced to delay the delivery of the next aircraft carrier, the Ford, and delay the mid-life overhaul of the aircraft carrier George Washington.
Also, we will cancel procurement of at least 11 tactical aircraft.
Mr. Chairman, the key to a balanced portfolio is a spending bill, and secondarily the option to propose (to congress) the transfer of money between accounts. This would at least enable us to pursue innovative acquisition approaches, start new projects, increase production quantities, and complete ships we have under construction.
Just to meet minimal readiness needs, we need to transfer/reprogram about $1 billion into the Operations and Maintenance account and $1 billion into our procurement accounts, mostly for shipbuilding. We need to do this by January.
LONG-TERM IMPACTS OF SEQUESTRATION
After the SCMR was completed, our focus has been on crafting a balanced portfolio of programs within the fiscal guidance provided.
Further details of this are outlined in detail in my written statement which I request be entered for the record.
In summary, we will maintain a credible and modern sea-based strategic deterrent, maximize forward presence to the extent we can using ready deployed forces, and continue investing in asymmetric capabilities while, with the committee’s help, we’ll do our best to sustain a relevant industrial base.
However, there are several missions and needed capabilities, specified in the defense strategic guidance, that we cannot perform or keep on pace. These are detailed in my written statement.
Applying one fiscal and programmatic scenario, we would result in a fleet of about 255 ships in 2020, that’s about 30 less than today, about 40 less than planned in our PB-14 submission and 51 less than our force structure assessment – 306 ships.
Mr. Chairman, I understand the pressing need for our nation to get its fiscal house in order. I am “on board” in that endeavor, but it is imperative we do so in a thoughtful manner to ensure we sustain appropriate warfighting capability, appropriate forward presence, and be ready – the attributes we depend on from our Navy.
I look forward to working with the Congress to find solutions that will ensure our Navy retains the ability to organize, train, and equip these great Sailors, Civilians and their families in defense of our nation. Thank you.
JONATHAN W. GREENERT
ADMIRAL, U.S. NAVY