Navy Shipbuilding Initiative Projects $1 Trillion Cost Over Next 30 Years

Key Takeaways

The U.S. Navy plans to expand its fleet to 381 ships, requiring $40.1 billion annually in shipbuilding through 2054.
The Congressional Budget Office estimates total costs will exceed $1 trillion, with a need for 46% higher annual funding than recent years.
Shipbuilding productivity must drastically improve to fulfill the ambitious expansion plan amid ongoing production challenges.

Proposed Fleet Expansion Costs

The U.S. Navy’s ambition to expand its fleet of battle force ships entails significant financial commitments, requiring approximately $40.1 billion in annual shipbuilding expenditures through 2054. This proposal, linked to rising global threats, aims to increase the current fleet size from 295 to 381 ships over the next 30 years. However, projections indicate a decline to 283 ships by 2027 due to 13 planned retirements outpacing new commissions.

The analysis provided by the Congressional Budget Office (CBO) highlights that the Navy’s shipbuilding plan necessitates congressional funding at levels 46% higher than the average received over the last five years. The Navy’s budget would need to expand from the current $255 billion to about $340 billion by 2054, with $40 billion allocated for shipbuilding and an additional $45 billion for the operational and maintenance costs associated with the existing fleet.

The CBO’s cost estimates exceed those of the Navy’s own projections by 8% to 16%, primarily due to the realization that construction timelines have stretched and designs have become increasingly complex. The analysis also points out that some of the Navy’s cost predictions appear overly optimistic.

There has been a noticeable increase in funding for shipbuilding in the past ten years, with appropriations averaging $2.5 billion more annually than presidential requests since 2015. This rise is largely influenced by concerns regarding the Navy’s capability to fulfill its mission with a fleet that many lawmakers deem too small.

Challenges in Shipbuilding

To effectively realize the proposed fleet expansion, U.S. shipyards need to significantly enhance their productivity, a task complicated by current challenges in the shipbuilding industry. According to Eric Labs, a senior analyst at the CBO, the state of Navy shipbuilding is “terrible,” the worst it has seen in 25 years. He expressed concern about the industry’s capacity to improve quickly, citing the slow trajectory to this concerning status.

The shipbuilding sector has faced persistent issues, such as cost overruns and labor shortages, which have delayed the completion of several naval vessels. A prominent example includes the Nimitz-class aircraft carrier George Washington, which began its midlife refueling in August 2017. Although such refueling typically spans four years, the project extended to nearly six years, concluding in May 2023.

While the construction pace of aircraft carriers is expected to remain stable under the Navy’s latest fleet strategy, the CBO predicts production rates for submarines, surface combatants, and amphibious warfare ships will increase, averaging 50% more tonnage from 2030 to 2054 compared to current levels.

In summary, the U.S. Navy faces both substantial financial requirements and significant operational challenges as it seeks to enhance its maritime capabilities amidst growing international threats.

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