According to the Congressional Budget Office’s (CBO) annual analysis, the Navy’s 2025 plan to recapitalize its fleet will cost approximately $40.1 billion annually. Across the scope of the 30-year plan, the Navy would grow from its current battle force of 296 crewed ships to 381 crewed ships, plus 134 uncrewed surface and subsurface vehicles, by 2045. The analysis projects that the net addition of 85 vessels to the fleet will cost the Navy $1 trillion.
The anticipated annual cost of meeting the Navy’s preferred plan is more than double what Congress has allocated for shipbuilding over the past five years, even though Congress has consistently appropriated more for that purpose than the President has requested for the past decade. Per the report, “The cost of the Navy’s 2025 shipbuilding plan is high not only compared with recent funding but also by historical standards. Over the past decade, funding for ship construction reached its highest level since the Reagan Administration’s defense buildup in the 1980s.”
During the Cold War, from 1955 to 1989, when competition between the U.S. and the Soviet Union was at its height, shipbuilding appropriations averaged $32.8 billion (adjusted for inflation to 2024 dollars) per year. By contrast, an average of $27.5 billion has been provided annually for shipbuilding over the last 5 years. This, nevertheless, has marked a significant increase since the Soviet Union fell.
What Is Driving the Need to Increase Fleet Size
Ongoing competition with China, localized in the Western Pacific, is behind the renewed focus on increasing Navy fleet capacity. Over the past several decades, China has invested in its shipbuilding industry and currently possesses the world’s largest naval fleet by hulls. In addition, China is also delivering new warships faster than the U.S., prompting concern in both Congress and the Pentagon.
Navy leaders have made maintaining the existing fleet a priority by 2027, foreseeing the need for the current force to prepare for conflict. They plan for a modest growth in the shipbuilding budget of only 3 to 5 percent.
Contraction Before Expansion
While the ultimate plan is for the fleet to grow, CBO analysis notes that the fleet will be at its smallest in 2027 before expanding in the 2030s. Over the next three years, the Navy plans to retire 13 more ships than would be commissioned over that period, causing the fleet to reach a low of 283 ships. The 2025 plan would also decrease the number of ships that can fire missiles and torpedoes over the next five to ten years before growing those capabilities again in the 2030s. However, the report notes that the Navy would need to build up its inventory of munitions to take full advantage of the planned capabilities.
The report also highlights the need for the nation’s industrial base to grow to meet the project demands for new Navy vessels: “Since 2014, [the amount of tonnage] has grown by 80 percent, from 68,000 tons to 123,000 tons.… Under the Navy’s 2025 plan, the amount of naval tonnage under construction over the next three decades would increase further. Not all shipyards would be affected in the same way because the Navy’s demand for different types of ships would vary over the next three decades. Carrier construction would be fairly consistent and steady through the Navy’s planning horizon. But construction at shipyards that build the remaining categories of combat ships—submarines, surface combatants, and amphibious warfare ships—would increase significantly: The average amount of tonnage under construction from 2030 to 2054 would be 50 percent greater than the amount being built today.”
This may prove to be a heavy lift for an industry that is already straining to meet current demands. For example, although the Navy has been buying two nuclear submarines annually, the two nuclear shipyards have only been producing 1.2 subs per year. Those facilities are pushing to expand submarine construction capabilities for the Virginia-class attack and Columbia-class nuclear ballistic missile submarines; the service estimates that 100,000 new workers across the submarine industrial base will be needed over the next decade.
Providing Quality Manufacturing Support for Naval Modernization and Expansion
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