FY 2023 shipbuilding plans-reality mismatch, analysis from CBO

Eric Labs at the Congressional Budget Office provided an interesting presentation at the 2023 Surface Navy Association’s national symposium. He finds that in every year from FY 2013 to FY 2023, Congress increased the Navy’s shipbuilding budget request. Overall, the funding increased from roughly $15 billion in FY 2013 to $32 billion in FY 2023 (that 113% increase is more like 88% if you remove inflation as of July 2022).

Shipbuilding requests and appropriations, FY 2013 to FY 2023

Most recently, in FY 2023, Congress added 20% to the request! That includes one additional DDG-51 and two additional logistics and support ships.

One of the most interesting charts is the plans/reality mismatch coming from the Navy’s 30-year shipbuilding plans over the past decade. The actual fleet inventory is lower that virtually all the projections, and over the past two years has taken a nose dive from roughly 300 back to 280. The presentation shows that this inventory decrease was due to rapid decommissioning, primarily of Reagan-era ships.

It’s not clear to me, however, whether this “actual” line in 2023 includes the Navy’s requested retirement of ships or what Congress actually allowed. I believe 24 were planned for retirement and this graph shows fewer than that, so it is likely the actuals. 5 out of 9 LCSs were saved from retirement, the youngest one being just three years in service.

Navy’s projections of its fleet under the past 11 shipbuilding plans, compared with actual inventories.

In the 2022 shipbuilding plan, the Navy provided three projections which some people have called the “choose your adventure” plan. Only the high-end estimate gets the Navy over the 355-ship goal which was put into legislation in FY 2018 NDAA. The high end would cost $25 billion a year, roughly two billion more than the lower-end plans that get the fleet to roughly 320 ships. Most of that added investment would be in large surface combatants.

The CBO, however, estimates the actual cost to be closer to $33 billion a year and the low end closer to $30 billion. That’s a significant delta.

One of the big consternations has been that right in the “danger” window of 2023 to 2030, the Navy’s plans are to actually decrease the number of missile cells aboard ships by 13 percent.