FY20 Budget Overview Part 2: Navy Programs
(Source: Forecast International; issued May 13, 2019)
The Pentagon has laid out a $205.6 billion budget for the Navy in FY20, an increase of around 5.1 percent compared to the FY19 enacted level of $195.6 billion. Mirroring a broader trend in the defense budget, the Navy’s request is subject to a slight drop in procurement that is offset by a boost in research and development spending over the next few years. This shift is being driven by concerns that the U.S. is lagging behind its competitors in military weapons development, resulting in a renewed focus on increasing investment in more advanced systems.

The Navy budget request includes $61.1 billion for procurement, which is down slightly from the FY19 enacted level of $61.4 billion, but $2.6 billion higher than the FY19 request. Congress added $3 billion for Navy procurement during the FY19 budget process, primarily for ships and aircraft. The Navy expects its procurement budget to increase to $61.8 billion in FY21, $62.7 billion in FY22, $66.9 billion in FY23, and $66.8 billion in FY24. These outyear figures are lower than originally planned, with budget documents showing $1.4 billion less for procurement in FY21 compared to FY19 projections, $3.3 billion less in FY22, and $1.5 billion less in FY23. These reductions are the result of a modified shipbuilding schedule, as well as over $1 billion in cuts to the service’s aircraft account in both FY21 and FY23.

The Navy’s $20.4 billion research and development budget, meanwhile, is $1.8 billion higher than the FY19 enacted level, and nearly $3 billion more than originally planned for FY20. In addition, outyear research funding has been bolstered by $11.8 billion between FY21 and FY23 compared to the FY19 spending plan. Despite the increase, the research budget still declines over the course of the Future Years Defense Program, but at a far slower rate than before.

The FY20 procurement budget contains $18.6 billion for aircraft ($974 million below FY19 enacted level), $23.8 billion for ships ($366 million below enacted), $4.3 billion for missiles and weapons ($607 million above enacted), $1.2 billion for ammunition (equal to FY19 enacted), $10 billion for Other Procurement ($732 million above enacted), and $3.1 billion for Marine Corps equipment ($333 million above enacted).

Shipbuilding

A number of alterations have been made to the Navy’s shipbuilding plans in FY20 and beyond. The service has proposed canceling the midlife refueling of the aircraft carrier USS Truman, which was scheduled to occur in 2024. Navy leadership argues that this move would save $3.4 billion over the course of the FYDP, another $2 billion beyond the FYDP, plus around $1 billion per year in operating costs for every year the carrier is out of service.

The Navy argues that taking Truman out of the water would free up funding for weapons needed in potential conflicts with advanced adversaries like China, such as missiles and unmanned surface vessels and unmanned underwater vessels. Some have also expressed concerns about the survivability of aircraft carriers and big-deck amphibious warships against the arsenal of anti-ship missiles at China’s disposal. Some lawmakers have questioned the plan to shrink the carrier fleet from 11 ships to 10, arguing that the Navy is already unable to meet the demand for forward-deployed carriers.

The budget also delays the LPD Flight II program, removing two ships from the 2020-2024 plan. The Navy was originally planning to procure one LPD Flight II in FY20, followed by one per year starting in FY22 (no ship would be funded in FY21). The revised plan pushes the FY20 ship out to FY21, with another ship following in FY23. There is no ship planned in FY24, and serial production would not begin until FY25. The Navy has also delayed procurement of one expeditionary sea base. The ESB was moved from FY20 to FY23.

These deferrals allow the Navy to invest additional funding in submarine and destroyer programs in FY20. The budget adds a third Virginia class submarine and a third DDG 51 class destroyer in FY20. Two of the three attack subs funded in FY20 will be built with the Virginia Payload Module, which increases the sub’s missile-carrying capacity. The Virginia class procurement rate returns to two per year through the remainder of the FYDP. While the Navy receives an additional destroyer in FY20, DDG procurement drops from three ships in each of FY21 and FY22 to two.

The shipbuilding plan maintains the 2024 procurement target for LHA 9, despite the wishes of the Marine Corps to accelerate construction of the big-deck amphibious ship. The request includes $1.7 billion in advance procurement for the Columbia class ballistic missile sub, and procurement of the first sub is still planned for FY21.

The Navy is also rolling back a planned cruiser life extension program, and will decommission its six oldest cruisers at the end of their service lives starting in 2021. The service says this decision will save $254 million in FY20 and $2.5 billion over the FYDP. The Navy says the cruisers are difficult to maintain, and argues that canceling the life extension prioritizes readiness over force structure. The Navy has tried to cancel the cruiser modernization program in the past, but was blocked by Congress. Lawmakers will examine the decision once again during the FY20 budget markup process. There may be less pressure on Congress to reverse the decision this time around, as the Navy’s Future Large Surface Combatant is around the corner. The Navy has delayed initial procurement of the future surface combatant from 2023 to 2025, but the service may try to move the timeline back to the left in future budget submissions.

The budget procures CVN 81, the fourth Ford class aircraft carrier. The Navy originally planned to procure the ship in FY23, but a recent block buy contract award covering CVN 80 and CVN 81 allowed the date to be moved up three years. The contract represented the first block buy for aircraft carriers since the 1980s. Aircraft carrier costs are spread out over multiple years, and the FY20 request includes $2.3 billion in new funding. Procurement of CVN 82 is still currently scheduled for FY28.

The lead FFG(X) frigate is funded in FY20 as planned, and the outyear shipbuilding plan shows two ships being procured in FY21 instead of one. Procurement continues at a rate of two per year through the remainder of the FYDP, with a total of 20 ships being procured through FY30.

The request cuts the eight LCAC 100 Ship-to-Shore Connectors originally planned for FY20, and reduces procurement rates through the remainder of the FYDP. There is a backlog of vessels that have received funding through the Congressional appropriations process but have not been put on contract. The revised spending plan tries to balance the construction schedule, but removing all eight craft from FY20 could be disruptive to the supplier base. Congress may restore some of the vessels in their markups.

The shipbuilding budget also includes a pair of TAO 205 class fleet oilers, one more than planned; two towing, salvage, and rescue ships; and four LCU 1700 landing craft.

Aircraft

Navy aircraft procurement funding is around $915 million lower than originally planned for FY20, excluding $119 million in war funding. The planned F-35B request was reduced from 20 aircraft to 10 in FY20, and the new spending plan cuts another five aircraft in FY21, three in FY22, and one in FY23. The Navy receives funding for 20 F-35Cs, which is four more than planned. The Navy is seeking 24 F/A-18E/F Super Hornets as expected, but the outyear request is reduced by nine aircraft in FY22 and five in FY23.

The request includes six P-8A Poseidon maritime patrol aircraft, and the Navy has increased its P-8A requirement from 117 aircraft to 138 in order to equip the Reserve Component. The budget also includes six CH-53K helicopters, three less than planned. The budget includes two MQ-4C Tritons, one less than planned. Not every aircraft program was subject to cuts. There are three KC-130Js, one more than originally projected for FY20, and 32 training helicopters, which is five more than expected. The service also requested funding for 22 F-5N aircraft for training, as well as three MQ-9A Reapers for the Marine Corps. Another three MQ-9As are projected in FY21.

Remaining on track with previous spending plans is a request for four E-2D Advanced Hawkeyes, 10 CMV-22 carrier onboard delivery aircraft, and six VH-92 executive helicopters.

Missiles

A number of missile programs have been bolstered in the FY20 request. The Navy has tried to halt Tomahawk production over the past few years as it shifts to a missile recertification program for the existing inventory, but Congress has added funds to keep the production line running. The FY20 request now includes 90 Block V Tomahawks in each of FY20 and FY21, and starts the recertification phase of the program with the induction of existing Block IV missiles for modification into the Block V configuration. The budget also includes 20 Maritime Strike Tomahawk upgrade kits in FY20, with a total of 375 MST kits funded through the FYDP.

The budget includes 292 Sidewinder missiles, 94 above previous plans; 382 Joint Air-to-Ground Missiles, an increase of 307 over the planned amount; 29 HELLFIRE missiles, none of which were included in the previous year’s budget projection; 48 Long-Range Anti-Ship Missiles (LRASM), an increase of 23 over FY19 plans; 18 Naval Strike Missiles, six more than planned (the NSM was selected as the Littoral Combat Ship over-the-horizon missile); and 3,388 Joint Direct Attack Munitions (JDAM), 544 more than expected.

Matching the previous year’s projections, the FY20 request includes 125 SM-6 missiles, 750 Small Diameter Bombs, 60 Evolved SeaSparrow missiles, and 58 Mk 48 torpedoes. It also includes $1.2 billion for Trident II modifications. The Navy cut its request for Advanced Medium-Range Air-to-Air Missiles (AMRAAMs) and RIM-116 Rolling Airframe Missiles. The service wants 169 AMRAAMs and 120 RIM-116s, reflecting reductions of 53 units and 30 units, respectively, compared to previous plans.

Marine Corps

Although funding for Marine Corps equipment is up as a whole, the Marines did see some cuts to big-ticket items. Prior to the budget release, the service announced it was terminating its Amphibious Assault Vehicle (AAV) survivability upgrade in order to free up funding for the Amphibious Combat Vehicle. As such, AAV upgrade funding was cut by $147.2 million in FY20. The request includes $317.9 million for 56 ACV Increment 1.1 vehicles, with another 92 funded in FY21. The Marines reduced Joint Light Tactical Vehicle procurement by 596 vehicles in FY20, with the request seeking funding for 1,398 JLTVs. A total of 5,354 vehicles are funded through the FYDP.

Research & Development

The Navy adds $372.5 million to its research and development account for a pair of large unmanned surface vessels, and the acquisition is slated to receive $2.7 billion over the next five years. Additional funding is provided for continued development of medium unmanned surface vessels and other mine countermeasures equipment. The Navy also requested $182 million for the Orca Extra Large Unmanned Undersea Vehicle (XLUUV), with $807.4 million programmed between FY20 and FY24.

The service wants $718.1 million for continued development under its precision strike weapons development program, which funds several subprojects. The largest of these is the hypersonic conventional prompt strike weapon, which is funded at $593.1 million in FY20 and $5.2 billion over the FYDP. The service also wants $19.7 million for work on the Next Generation Land Attack Weapon in FY20, as well as $105.3 million for air-launched decoy development.

The RDT&E budget also includes $671.3 million for the MQ-25 unmanned tanker, $517 million for the CH-53K, and $419.1 million for the Columbia class submarine (not including nearly $200 million in reactor work funded separately). The Navy wants $806.6 million to continue developing upgrades for the F-35B/C, with $2.1 billion allocated through the FYDP. The service is also seeking $524.3 million for Next Generation Jammer development, but NGJ procurement funding dropped from a planned $232.2 million in FY20 to only $6.2 million. Procurement funding for the jammer program is expected to ramp up over the coming years, with a total of $1.5 billion planned through FY24.

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