When you think about the US Navy, you will probably think about the historical conquest of Burberry pirates or heroes on the high seas. But one of the important things that our navy needs to flourish today is a little more commonplace. If you need a healthy and growing naval shipbuilding industrial base, you will need to change the accounting practices used by the Pentagon and the Bureau of Management and Budget.
Navy Proposed a shipyard accountability and labor support plan Last year, it will help financially troubled shipbuilders become healthier among their existing budget resources. However, the Biden administration shot down the idea because Congress moved too much money within the shipbuilding budget after solidifying its previous plans with annual approval and spending bills.
Despite my experience with the Congressional Budget Office over five years, I have no capacity to challenge the OMB's decision on technical merits. There was no ominous decision. However, the plan that was honestly hatched by the Navy itself seems to have been hatched and hatched to further advance the naval shipbuilding, for example, because it fired down something technically for me to build an attack submarine.
By adopting this idea, the Trump administration can move further taxpayer dollars and get closer to its goal of building more than two attack submarines a year (today's tax rate is close to 1.5). Other parts of the US Navy Shipbuilding Station may also benefit from changes to this rule.
If nothing else, the suggestions are worth looking again.
The US Navy remains the best in the world. Currently, the number of ships exceeds that of China with around 100 ships, but American ships are generally much better. The airlines for that aircraft are much more capable and numerous. Its amphibious ship offers power projection capabilities that China cannot begin to face conflict. Its attack submarine is quiet and has a longer range on average (as all of us are nuclear driven).
Overall, the US Navy Fleet has twice the gross tonnage of China. In other words, despite the fewer ships, it's much larger on average. More importantly, the US Navy records better missile defense and much longer trajectories of seamanship and long-range operations.
However, China also has advantages beyond the number of ships. Its commercial shipbuilding sector is now much stronger than ours. The wars fought in the Western Pacific would give China a great advantage of proximity. That naval work is not complicated by the need to worry about multiple overseas duties and theatres at certain times. And that government will not promote the most important national shipbuilding industry, near the edge of financial bankruptcy.
I don't suggest that the rest of the big shipbuilders in America are nearing collapse, but they have a hard time holding onto the workers and are expanding the workforce much less. Their margin of profit is modest. The American hope of building a larger navy under current conditions has not been realized because the Defense Strategy advocates for four straight presidents (two from each party).
The overall size of the navy should be more concerned than the asymmetrically important attack submarine force. These 50 or so ships in the Navy today provide more or less immunity. We cannot track our submarines in most oceans. They remain very deadly. For example, in the context of the Chinese trying to seize Taiwan with an invading fleet.
Now, when the Navy signs a contract with the shipbuilder, the parties agree to the first year total price of the contract, but will be paid to the shipbuilder over the next three to six years. As the amount has already been agreed, inflation can make shipbuilders vulnerable to shocks, and from there it cannot be easily recovered during the contract period. Furthermore, funds cannot be reprogrammed to rebuild and improve shipbuilding capabilities within the term of such contracts, for example.
The idea for a shipyard accountability and labor support plan is to give the navy and its shipbuilders more flexibility in how they spend their money.
Under the plan, wage costs, known as “service and support,” for a given year, will be paid from funds provided by Congress that year for all ships under construction, as with other Department of Defense procurements. Currently, each ship's funds are a type of government escrow accounts, paid in the course of the construction of certain vessels, increasing their vulnerability to inflation.
Military accounting practices are far less sexy than sea heroes. But they may be really important to America's grand strategy – and to ensure peace through strength over the next few years.
Michael O'Hanlon is the Phil Night Chair of Defense and Strategy at Brookings Institute and is the author of “Military History for Modern Strategists: The Major War in America since 1861.”
