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An Analysis of the Navy’s Fiscal Year 2024 Shipbuilding Plan

Each year, as directed by the Congress, the Department of Defense submits a report with the President’s budget describing the Navy’s planned inventory, purchases, deliveries, and retirements of ships in its fleet for the next 30 years. Like the Navy’s shipbuilding plan for fiscal year 2023, its 2024 plan provides three alternative long-range projections of its future fleet rather than one. In this report, the Congressional Budget Office analyzes the alternatives in the 2024 plan and estimates the costs of implementing each of them. Overall, the objectives of the three alternatives in the 2024 plan are similar to those in the 2023 plan, but the costs have increased substantially, largely reflecting higher estimated costs for submarines.

Cost

The three alternatives in the Navy’s 2024 plan would require average annual shipbuilding appropriations that were 31 percent to 40 percent more than the average over the past five years. CBO estimates that total shipbuilding costs would average about $34 billion to $36 billion (in 2023 dollars) over the next 30 years, which is about 16 percent more than the Navy estimates. Compared with its estimates for the 2023 plan, CBO’s estimates increased by between 5 percent and 10 percent in real (inflation-adjusted) terms, depending on the alternative. To support the 2024 plan, the Navy’s total budget would increase from $245 billion today to between $315 billion and $330 billion (in 2023 dollars) in 2053.

Purchasing Plan

The Navy would purchase 290 battle force ships under Alternative 1, 299 under Alternative 2, and 340 under Alternative 3. (Battle force ships include aircraft carriers, submarines, surface combatants, amphibious ships, combat logistics ships, and some support ships.) Overall, Alternative 1 places slightly more emphasis on buying large surface combatants than Alternative 2 does. Under Alternative 2, the Navy would buy more submarines than under the other alternatives, although it would purchase more existing classes of submarines and fewer next-generation submarines. Under Alternative 3, the Navy would buy more ships of all types, except for submarines, than under the other alternatives. (The 2024 plan offers few details about the costs or quantities of unmanned surface or undersea vessels.)

Fleet Size

If the Navy adhered to the schedule for purchases and ship retirements outlined in its 2024 plan, by 2053 the number of battle force ships would increase from 290 today to 319 under Alternative 1, 328 under Alternative 2, and 367 under Alternative 3. In all three cases, the fleet would be smaller over the next 10 years than it is today, before increasing in size.

Fleet Capabilities

Under all three alternatives, the Navy would reduce the fleet’s firepower over the next decade but would eventually expand its missile capability by increasing the number of missile cells (which are vertical tubes or launchers on surface ships and submarines that carry the Navy’s offensive and defensive missiles) and deploying them on more ships than they are deployed on today.

Originally published at https://www.cbo.gov/publication/59508

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