On the calendar it’s “Fat Tuesday” and if you don’t already know it, the unofficial theme of Fat Tuesday is “Laissez Les Bon Temps Roulez”.  For those who haven’t kept up with their high school French, that translates to “let the good times roll.” At Taxpayers for Common Sense, we think the good times are being allowed to roll way too long for the defense industry.

For starters, let’s look at shipbuilding where, once again, the good times are rolling and the money is flowing.  Back in December we pored through the FY14 Omnibus spending bill and reported on all the shipbuilding programs that Congress funded, many in excess of what the Pentagon requested.  We had our first hint that this would continue during the advance budget briefing by Secretary Hagel and Chairman of the Joint Chiefs, General Dempsey.

Secretary Hagel announced his decision to truncate the operationally-inefficient Littoral Combat Ship or LCS.  “I am concerned that the Navy is relying too heavily on the LCS to achieve its long-term goals for ship numbers. Therefore, no new contract negotiations beyond 32 ships will go forward.” This represents a cut of 20 ships from the most recent projected inventory of 52 LCS. At TCS we call for ending the program altogether, which would save a little more than $18 billion over the next decade. Now that the budget documents are out, we see the Navy plans to buy three more LCS at a cost of a little less than $1.5 billion. We still think the program should just be cancelled.

Any excitement we might have felt about cuts to the LCS budget were dashed with Secretary Hagel’s  next statement, “Additionally, at my direction, the Navy will submit alternative proposals to procure a capable and lethal small surface combatant, generally consistent with the capabilities of a frigate. I've directed the Navy to consider a completely new design, existing ship designs, and a modified LCS. These proposals are due to me later this year in time to inform next year's budget submission.” So, although shipbuilding accounts may be taking a bit of a “haircut” this year, look for all kinds of ideas for a “lethal frigate” coming from industry to “inform” next year’s budget. We’ll be watching.

Last year, shipbuilding was funded at $15.2 billion: an increase of $1.1 billion over what the Pentagon was asking to spend. This year’s request shipbuilding request is $14.4 billion.

The biggest piece of this year’s pie goes to purchase two new VIRGINIA class submarines for roughly $5.8 billion. More than 1/3 of the Navy’s budget for ships will be “sunk” into one program.

The next largest piece is for two new ARLEIGH BURKE class destroyers for a total of $2.8 billion.  And according to the Secretary’s briefing in late February, the budget request also includes a plan to “lay up” half of the Navy’s cruiser fleet. Under this plan, which has made Congress highly suspicious in the past, eleven cruisers would be modernized and placed in reduced operating status and “eventually” returned to the fleet.  Watch for Congress to try to pin down exactly what “eventually” means. 

So those are the “highlights” of the Navy’s shipbuilding plan before Congress starts amending it. We’ll have our periscope up, watching to see how much Congress adds to help out the shipbuilding industry.