The Impact of Sequestration (Part 1)

Shipmates,

I was privileged to represent you before the House Armed Services Committee (HASC) Talisman Saber 2013this week. I was there to testify about the impact of sequestration continuing into Fiscal Year (FY) 2014 and how our Navy will change if these reductions continue into the next decade.

Over the long term, sequestration-level budget reductions will prevent us from executing our nation’s defense strategy.  In the near term, sequestration in FY 2014 will reduce our readiness and prevent essential investments in the future fleet.

I will recap here what I told the Committee about how sequestration will affect us in FY 2014.  In a second blog I will describe a potential long-range scenario if sequestration level reductions remain in place until 2023.

The impact of sequestration in FY 2014

Sequestration will take about 10% from the Navy’s budget; however, with military personnel accounts exempted, the cut could increase to 14% in all other areas.  We would normally address this kind of reduction by ensuring we have the right mix of force structure, maintenance, training, weapons, and Sailors.  Sequestration, however, isn’t just a budget reduction. It takes about 14% from each and every program or activity.  The impacts from this budget cut will be in two main areas: (1) operations and maintenance and (2) investments.

(1) Operation and maintenance accounts will absorb a larger reduction in FY 2014 than in FY 2013; in addition we must begin to address carried over bills from sequestration in FY 2013 that total approximately $2.3 billion over the next five years. We will prioritize forward presence for Combatant Commanders and preserve about 95% of the deployments originally planned for FY 2014. But this presence will come at the expense of training and maintenance for non-deployed forces.

Because of the mechanics of sequestration, we cannot reprogram (move) funds from other accounts such as procurement into operations and maintenance to make up for the sequestered amount. As a result, within operations and maintenance, we have to “go where the money is” – that means finding savings in training, maintenance, civilian personnel, and shore facilities. In particular, the reductions in fleet training we are compelled to make will result in only one non-deployed CSG and one ARG being trained and ready to respond to a contingency – notionally there would be three of each ready to deploy within a couple weeks.

090219-N-4003L-003We will be compelled to cancel planned FY 2014 fleet maintenance, including 34 of 55 surface ship maintenance periods totaling about $950 million – all in private shipyards – and 191 of about 700 aircraft depot maintenance actions. This missed maintenance will inevitably take time off the expected service life of our ships and aircraft, which in turn will make it harder to sustain even the smaller fleet we will have if sequestration level reductions remain in place for the long term.

We will be compelled to keep in place our freeze on hiring for most civilian positions. And ashore we will continue to conduct only safety-essential renovation and modernization of facilities, further increasing the large backlog in that area.

(2) Investment accounts will be particularly impacted by sequestration in FY 2014. Without Congressional action or mitigating circumstances, the reductions imposed by sequestration and the limitations from not having an FY 2014 spending bill will compel us to:

·         Cancel planned FY 2014 procurement of an SSN, an LCS and an AFSB; also, delay an SSN planned for FY 2015 procurement. Each of these would further worsen the reduction in fleet size that sequestration would compel us to make over the long term.

·         Delay the planned start of construction on the first SSBN(X) from FY 2021 to FY 2022. This would cause us to be unable to meet U.S. Strategic Command presence requirements when the Ohio-class SSBN retires.

·         Cancel procurement of 11 tactical aircraft (4 EA-18G Growler, 1 F-35C Lightning II, 1 E-2D Advanced Hawkeye, 2 P-8A Poseidon, 3 MH-60 Seahawk) and about 400 weapons, exacerbating future sequestration-driven reductions in our capabilities to project power despite Anti-Access/Area Denial (A2/AD) threats.

·         Delay delivery of USS Gerald R. Ford (CVN-78) by two years, extending the period of 10 CVN in service, and lowering surge capacity.

·         Delay the mid-life overhaul of USS George Washington (CVN-73) scheduled for FY 2016.

In order to avoid or remedy some of the FY 2014 impacts described above, we need Congress to approve authorization and appropriations bills or provide us authorities to transfer funds, pursue innovative acquisition approaches, start new projects, increase production quantities, and complete building ships.

I will continue working with Congress and others to mitigate the impacts of sequestration.  I understand the challenges and uncertainty this situation causes and I greatly appreciate the “can do” attitude and creative problem solving you are tackling them with.  We will weather this storm and continue to deliver the forward presence, readiness and warfighting capability the country needs.

 

JONATHAN W. GREENERT
Admiral, U.S. Navy

 

 

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  • tec

    There could be hundred of millions of dollars saved with the simple restructuring of the supply system as well. The price the Navy pays for supplies far exceeds what a typical civilian company would pay for the same goods.

  • Ray Walker

    Years ago our Congress supported President Ronald Reagan’s
    Star Wars Program. Now I believe he is looking down and shaking his head in disgust at the spectacle of military sequester by certain factions within his Grand Old Party.