Posted on: Wednesday, September 8, 2004

Navy proposes cutting back on ships

By Renae Merle
Washington Post

WASHINGTON — Squeezed by budget constraints, the Navy is proposing significant cuts in its shipbuilding program that could batter the already struggling industry.

The proposal comes as top Pentagon officials consider shifting the military's focus from preparing for large-scale warfare to training more specialized forces for guerrilla warfare, long-term peacekeeping and counter-terrorism efforts. The changes could eventually mean a reallocation of resources from traditional weapons such as ships, tanks and planes in favor of more troops, elite Special Operations forces and intelligence gathering.

The Navy's proposal would provide money to build only four ships in 2006, compared with nine planned for 2005, according to a Defense official who spoke only on condition of anonymity because the budget proposal hasn't been made public. The plan would also delay production of a new generation of destroyers.

Defense Secretary Donald Rumsfeld has not signed off on the proposal, which would also need congressional approval, but the plan has provoked debate on how many ships the Navy needs and whether it can still afford to support six shipyards.

Industry officials predict that the proposal, if enacted, would cripple shipbuilders already suffering from low production rates. It is also likely to face a battle in Congress.

The "Navy's proposal is irresponsible (and) would create unnecessary instability in the nation's fleet strength and uncertainty for our vital shipbuilding industry," Sen. Olympia Snowe, R-Maine, said in a written statement. "As our nation continues to fight the global war on terror, now is clearly not the time to be under-funding our critical military infrastructure by diminishing the Navy's fleet size."

Bath Iron Works, owned by Falls Church, Va.-based General Dynamics Corp., is one of the largest employers in Maine.

The Navy will also likely face resistance from Sen. John Warner, R-Va., chairman of the Senate Armed Services Committee. Northrop Grumman Corp.'s Newport News Shipbuilding is the largest manufacturing employer in Virginia, with 19,000 workers. The Navy declined to comment on its budget proposals.

The budget crunch goes across the military. Personnel costs for all of the services, including the Navy, have increased 30 percent since 1999, said Robert Work, senior analyst at the Center for Strategic and Budgetary Assessments.

"All of the services are under very intense pressure on their procurement budget," he said. The wars in Iraq and on terrorism have also taxed resources, he said. The proposal calls for delaying construction of a new class of destroyer until 2007 from a target of 2005, according to defense and industry officials. It also would delay a planned acceleration in the production of submarines and push back delivery of a new aircraft carrier.

Defense officials blame the increasing cost of building ships, including rising steel prices, and Congress's reluctance to allow the Navy to try new funding methods. For example, the Navy is required to allocate the total cost of a new ship upfront instead of breaking up the payments over time, a policy it has fought for years.

The proposal is also the result of competing priorities within the service, which has diverted money to cover the expense of rising healthcare costs and of maintaining and operating its ships and aircraft, industry and defense officials said.