Sequestration---The Fear of the Unknown

Congress Adds To DOD Budget

Congress adds to DOD budget; In February the Department of Defense (DOD) submitted to congress their FY 2013 budget. The budget was to include a plan to reduce the budget by $487 Billion in the next 10 years. In addition to the planned cuts, DOD asked for two BRAC’s. This week two major House committees; House Armed Services (HASC), and House Appropriations are recommending increases in the 2013 DOD budget. (HASC $3.7 Billion, Appropriations $3.1 Billion). Both of these committee recommendations need House approval, which is presently ongoing, and then they will be sent to the Senate.

How the region will be affected by House actions. Going from a five to six year building start plan. Big unknowns on increase in cost, it is possible the increased cost could make future CVN’s unaffordable. (Past studies expressed big concern on the extension of building CVN’s). The House plan called for funding for modernization of 6 cruisers, and not decommissions those as planned by DOD. This would cancel the Norfolk decom plan for USS Anzio. (This may be hard for the Navy, the plan called for the ship to be decom in March 2013, I am sure manning and maintenance for decom are all ready in place). The House is proposing to add a second Virginia class submarine, which would add work to NNSY. They changed the DOD Tricare proposal; the change would benefit the retired and active duty. Other changes to the budget would add funds for procurement and maintenance.

The DOD BRAC recommendation was never popular with congress, but the services felt it was essential to close facilities to go along with force reduction. (Air Force 300 aircraft, 100,000 Marine and Army troops).

The House vote should occur this week; it will be interesting to see how much support the Senate gives the original budget or will make their own increases.

Big Picture, DOD Strategy--Time Out

Big Picture, DOD Strategy; Some of the affects of the DOD “New Strategy” and how the $480 million in cuts in the budget will impact the region has been identified. The reductions will cause a negative economic impact on the region, but there is a bigger concern; how will the cuts affect the military’s ability to accomplish their mission. I am in no position to make this judgment but, I have read the concerns of many in leadership positions. Rep Todd Akin, the chairman of the subcommittee of Sea power (Armed Forces said, “It makes little sense to be shrinking our Navy just months after the announcement of a strategy that would shift emphasis to Asia, the Pacific, and the Mideast---areas where a strong naval presence is an imperative”. As the Navy takes on more and more global responsibility the Chief of Naval Operations in Navy Times (Apr 16) said “The fleets pace of operations are surging and unsustainable as high demands for ships and submarines continue”. The Navy has recently announced the possibility of longer deployments (up to 8 months for some ships) and a change from one CVN in the 5th fleet to two for up to 9 months of the year. There are a lot of unknowns, Russian build up in the Mediterranean and the continued unrest in Syria and instability in Libya and Egypt. All potential response requirements from a U.S. Naval power.

As the Navy takes on more responsibility, the present number of ships will remain at the present level of 285 until at least 2018. Rep Randy Forbes (VA 4) chairman of the subcommittee on Readiness (Armed Forces) expressed concern about the Navy announcement of decommissioning ships prior the planned service life---of the 16 ships in the decom plan, 7 cruisers(CG) and two amphibious ships, six of the CG’s have 13-15 years of service life and both amphibs have 13-18 years remaining. The Commander of Naval Sea Systems Command said last year “the cheapest way to afford our Navy with the force structure that we need is to maintain the ships we already have---“.

Congress is presently considering the DOD budget and in committee hearings yesterday, they were considering changes in the DOD number of SSBN’s and a change in the SSN procurement. They are also considering saying ‘NO’ to the DOD plans to increase TRICARE fees for military retirees and their families. They are also recommending increasing CVN funding from 5 to 6 years. (This is not good for the region) These are a few of the committee recommendations to Navy budget that will eventually go to the full house for approval. Any changes to the budget are a concern to the Secretary of Defense, he said in a Pentagon briefing this week, “congressional tinkering with the 2013 Defense budget could have unintended consequences and result in a hollow force. Maybe it is time for ‘TIME OUT’, evaluate requirements for all services then establish budget.

All could change for the worse if sequestration occurs (another $600 billion from DOD). In a Forbes statement, it would be significant and have an immediate impact. About $15 billion from the Navy each year and the Navy would go down to 230 ships. National impact yes, regional a big unknown/concern.

Two Carriers to San Diego? Impact on HR?

On Monday the big news in San Diego was “Two more aircraft carriers to San Diego”. All the San Diego (SD) TV stations covered the story and discussed the Cities increased role as the U.S. military shifted its focus towards Asia and the Pacific. In the report to the city, Rear Admiral Dixon Smith, Commander Southwest Region, was not specific on the dates said (SD FOX 5), “We know we we’ll see growth, I just can’t give details in numbers yet--- I can’t say when”. This goes along with a statement the Chief of Naval Operations had made in January, there will be another CVN coming to San Diego. (San Diego, has the capability to homeport 3 CVN’s; all nuclear maintenance and support facilities are in place). In response to the San Diego news the Pilot reported “Navy to homeport two more carriers in San Diego”.

Virginia leader’s response, said they were assured by Navy Leaders that Hampton Roads will remain the homeport for five carriers through 2017. It was also stated regarding the DOD New strategy and shift of forces to the west. (Proposed 60% forces on the west coast and 40% on the east coast;)” the changes are in flux as the Pentagon works through changes in defense strategy.”

There will be 5 carriers homported in Hampton Roads; however after Enterprise is decommissioned in the fall there will be only 4 operational CVN’s in the region. They will be homeported at Naval station Norfolk requiring all the operational support and support of the crew and families. (First reduction to 4 operational CV’s since the 50’s, there will be a negative economic impact on the region) The fifth CVN will be USS Lincoln to be followed by USS Washington that will be in a 3 year availability at Newport News Shipyard (NNS)-refueling. This is a temporary move and there has been a CVN at NNS since the late 90’s when the Nimitz started the CVN re-fueling cycle. With two squadrons and a airwing staff moving west (leaving 4 airwings at Oceana), it is obvious the Navy intends to have only 4 operational CVN’s on the east coast.

The ‘flux’ part of the strategy is well underway; the 3 local DD’s have been identified to go to Spain, squadrons and airwing staff identified to move to Lemoore, all 7 ships to be identified (including Enterprise) to be decommissioned, Mayport preparing to receive the 3 ship ARG and PC’s . There will be other impacts when the entire ‘flux is’ identified.

Do not have the answer to the San Diego carrier homeport issue, my guess after USS Ford is commissioned, there will be another CVN homeported there.

Future of Military in HR; The Reality of the New DOD Strategy

Future of Military in Hampton Roads? I have heard the Chief of Naval Operations (CNO) Admiral Greenert will be visiting Hampton Roads this week. If possible would like to have someone ask him about Hampton Roads role in the Defense Department (DOD) ‘New Strategy’, shift in forces to Asia and Pacific. In a CNO visit to San Diego in January the San Diego Union-Tribune reported the CNO said “the shift in focus bodes well for San Diego the principle home of the Pacific Fleet---but, we have got to balance toward Asia Pacific. So I would expect the region to be relatively satisfied”.(The Strategy calls for 60% of the force to be on the west coast and 40% on the east) He also confirmed that a third aircraft carrier would probably be assigned to San Diego Bay by 2016. (This is about the time USS Ford will be commissioned and the Navy gets back to 11 CVN’s; don’t expect the east coast to go below 4 CVN’s). Last week CNO was in Jacksonville and among other issues he discussed accelerating the transferring of a three ship amphibious readiness group (ARG) from Norfolk to Mayport in 2014 rather than 2015. The Secretary of Navy in an earlier Mayport visit talked about how this move would benefit the community and the local ship repair industry. (A Norfolk loss) It will be interesting to hear how CNO addresses the New Strategy to Hampton Roads leaders. I don’t think we will hear a similar San Diego statement “the shift in focus to Asia and Pacific and the shift in focus bodes well for San Diego.” Facts; As the Navy shifts its focus/forces west it must consider “Balance” Navy says strategic dispersal. The Navy has Major operational facilities in Jacksonville (NAS Jacksonville, Mayport), Kings Bay GA (submarine base), Norfolk (Naval Station, Little Creek/Fort Story, Oceana/Dam Neck and New London (Submarine base). The ‘Reality’ of the New Strategy and the shift West, all East coast facilities will be impacted in some way by the new direction. The FY 13 budget impact on the Hampton Roads region: ARG (3 ships) and PC’s to Mayport, Decommission CG (Anzio) and LPD (Whidbey Island). Already announced, 3 DDG’s to Spain and 2 F-18 squadrons to Lemoore. Previously announced is the decommissioning of the USS Enterprise which will occur this year (A Major impact it is said like loosing 2 Ford plants, millions out of the economy, affect many business, schools etc) and 4 FFG,s. All of the above will have a MAJOR impact to the economy. I have recently read a brief to region leaders (Military Strategy for the 21st Century) that states “Hampton Roads will have modest reductions in the number of ships and personnel in the near term”. ---The reduction of a CVN, going from 5 to 4 alone will have a major impact, Military Affects all. Need to ask CNO if there are any other planned gains or losses for the region. (FL congressman has said there are 3 DD’s going to Mayport). The region needs to evaluate the impact of the potential losses of the industry that is 45% of the region’s gross output. When the Navy evaluates an area to move forces they do an Environmental Assessment. In that process they evaluate Socioeconomics for the region, impact on schools, housing, jobs, industry to support ships and the overall economic impact to the region. With a CNO update, the region should evaluate the Socioeconomics for the region, considering the known losses. In the 2011 State of The Region HR described the impact of military reductions. Impacted would be the shipbuilding and repair industry as well as many people and firms connected to the housing industry. It will also impact a wide range of merchants and employees who sell everything from automobiles to pizza. Local government will experience declining revenues and this will impact the schools, law enforcement and a host of other services and activities. Military Affects all: Future of Military in Hampton Roads, the reality of the New Strategy.

Mayport,BRAC & TRICARE; Update

Mayport, BRAC & TRICARE Update; Yesterday the Chief Of Naval Operations while talking to a group in Jacksonville,  stated the Navy was investigating ways to speed up the move of 3 Norfolk ships to Naval Station Mayport. Present Navy plans call for the homeporting of an ARG, 3 amphibious ships, at Mayport in 2015. CNO hopes to have the ships arrive in 2014, which will include 2000 sailors and their families. The Secretary of the Navy has previously stated the move will bring $75 million a year to the Mayport  ship repair industry. (The CNO also reconfirmed his support to homeport a CVN at Mayport) MAYPORT GAIN, NORFOLK LOSS.

There has been a lot of debate between Congress and DOD over the DOD request for 2 BRAC’s, 2013 and 2015. There has been strong opposition to BRAC in the House Armed Services Committee. (Navy Times 21 March)  Senator Claire McCaskill chairwoman of the Senate Armed Services Committee, which also has jurisdiction over military installations, said she is willing to allow the closing of U.S. military bases overseas. But Not Domestic bases. Unless the Pentagon can change her mind, her announcement seals the fate of the DOD BRAC  proposal. DOD representatives have said, they will move ahead on existing authorities “Installations below 300 civilian personnel” which can be reduced outside the BRAC process. It is doubtful that there will be a BRAC in 2013.

The TRICARE debate rages on in Congress. Navy Times (9 April) reported that Pentagon officials told lawmakers that if they refuse to support DOD proposals to cap basic pay raises, reduce retirement benefits and raise out-of-pocket health care rates, the Pentagon will be forced to cut about 60,000 troops. They said “If Congress does not provide us with needed support; we will face a major problem that would jeopardize our defense strategy”.  Vice Admiral Ryan the president of MOAA (Military Officers Association of America) wrote,’ Breach of Faith’, an article that said the Pentagon should get its own house in order before breaking the promises to America’s troops. He said “some feel military benefits should be ‘civilianized’ to be in line with nonmilitary positions. I’d like to know what civilian occupations could be comparable to those requiring every-increasing months away from home in situations ranging from health-threatening to life threatening.” DOD health reductions are a very important concern to a large portion of the local population; it would be a BREACH of Faith if the current DOD proposals are approved.

Congressman Randy Forbes has announced that he and other lawmakers will travel to Military across the country to discuss “Defend our Defenders”. The tour will travel to Military bases across the country to both inform the public and hear about the effects of a penalty scheduled to occur if Congress fails to agree on $1.2 Trillion in deficit reduction. The Congressman presently plans to have a meeting “Defend the Defenders” locally on 14 May.

Two Carrier Slowdown Questions?

Two Carrier Slowdown Questions? Last week the Pilot reported “Navy asks to Slow building two Carriers”.  This was one of the ‘slow actions’ requested in the Navy FY 13 budget. A reduction of 16 ships in the FYDP, (41 down from 57); CVN 79 (JFK) full funding commence in FY 13 but spread over six years vice four; Delay shipbuilding construction of LHA-8 by one year; Delay shipbuilding construction of SSBN(X) by two years; Delay procurement of a Virginia class submarine from FY 14 to FY18; Reduce LCS quantity by one in FY16 and one in FY17; Moved one DDG from FY 14 to FY16.  Aircraft would be down 77 in the FYDP (765 down from 842) Navy/Marine JSF aircraft are reduced by 69 over the FYDP.

Congress is presently reviewing the entire DOD FY13 budget and the Carrier delay is an issue that could affect the region. I am sure the Navy will be asked to answer many questions that have been asked in the past when a carrier construction delay has been proposed.  The Newport News Daily Press, March 23, reported a Navy spokeswoman said “both carriers delayed would remain within required cost caps of $8.1 billion in 2006 dollars”.

Other side of the delay story; In the same article, The effect of a longer construction period on Newport News shipyard is unclear. A NNS spokeswomen said “This is a long and complex process and the budget isn’t complete. We’ve communicated to Navy and Congress the most efficient way to build carriers is on five-year (cycle).” In a Congressional Research Service (CRS) report of February 2012, a press report stated in  August 2011 a NNS spokesman said “Delaying the purchase of an aircraft carrier could have sweeping consequences at the Newport News shipyard.---pushing back the construction contracts of future carriers would raise the overall costs associated with building the giant ships and affect the yard’s construction and engineering workforce.---delaying the purchase of a carrier would force Newport News shipyard to alter its long-term financial plans and cause a ripple effect throughout its far-reaching base of suppliers, which manufacture steel, valves, pipes, nuts, bolts and thousands of other components that go into building the 1,092- foot vessels. The CRS report stated, deferring the procurement could possibly, increase the total procurement cost of CVN-79 (CVN-80) potentially by hundreds of million dollars. (CVN-79’s procurement cost could increase due to (1) additional inflation being incorporated into the ship’s cost, (2) reduced spreading of fixed overhead costs at NNS due to reduced volume of work at the shipyard, and (3) reduced production learning curve benefits (i.e. loss of learning) at NNS in moving from CVN 78 to CVN 79 and CVN 80 due to increased time interval between ships. ----Costs increase could also occur due to the impact of the deferral on subcontractors and suppliers) The president and CEO of Huntington  Ingalls Industries (owners of the yard) Mike Petters, said “such a delay would have a wide-ranging impact on the Navy, the 20,000 worker Newport News shipyard and its stable of suppliers. Extending the carrier-build cycle to six or seven years not only increases the overall cost of the ship but would also have a severe and far-reaching impact nationwide---the yard buys up to $3 billion of materials from suppliers across the country”.

Congress will be asking some very serious/vital questions concerning the delay of all programs including the three major programs, SSBN(X), CVN and JSF. Eventually the bills need to be paid for these programs; congress will need to evaluate all programs in the DOD $480 billion recommended cuts.

Oh by the way---Has anyone asked the Navy how the tunnel tolls will impact their sailors/families who need to use the tunnel to go to the shipyard and the Naval Hospital?

Enterprise Final Deployment--Impact on Region

 Enterprise final Deployment, Impact on the region: The USS Enterprise departed this weekend on its final deployment, completing 50 years of impressive service, the Nation got their money’s worth out of “E”. When the ship returns and is decommissioned in December, Norfolk then will only homeport 4 CVN’s. Need to go back to the 50’s to have so few CV’s homported at the Naval Station. Economically the loss of a CVN will be a big impact on the region. There have been many estimates on the affect of the loss of a CVN. During discussions of moving a CVN to Mayport various estimates were given; (Reported in Congressional Record service report on Mayport move 2008) The Virginia Pilot reported “The regional Chamber stated a CVN creates 11,000 jobs and $650 Million in annual economic activity” the Navy 2008 study for the CVN move stated the estimated loss for the region (HR) “Crew and families, 2,800 jobs, $220 Million direct pay--$208 Million disposal income and $10 Million in local tax. Whatever the number, the loss of Enterprise and the reduction to 4 CVN’s will have a negative economic impact on the region “Military Affects All”. In addition to the carrier, 4 Norfolk FFG’s will be decommissioned in the next 4 years. The recent 2013 budget added a CG (Anzio) and a LPD (Whidbey Island) to the local decom list. The Navy recently announced 3 Local DDG’s will be leaving to be homeported in Spain. These additional losses will add millions more in the loss column.

Additional losses; The 2013 budget directed the Navy to move an ARG (3 amphibious ships) and Patrol Craft from Norfolk to Mayport. In a recent guest editorial in the Florida Time Union, the Secretary of Navy, Mabus, in a praise article for the Jax area, talked about the transfer of the ARG, he said, “In addition to the sailors and their families who come to Mayport the ship repair industry will receive a big boost, three ships that comprise the ARG have in the past averaged about $75 million annually in maintenance and repair work”. (A $75 million loss to the HR ship repair industry) The Secretary also reconfirmed the Navy commitment to homeport a CVN at Mayport.

The DOD new strategy of priority for Asia Pacific and 60% of the force on West coast and 40% on east coast will have 2 F-18 squadrons and an Air Wing Staff moving to Lemoore CA by 2014. This will bring the known total of losses to about 8,000 active duty (Does not include families and support/industry) 10 ships and Millions of dollars in revenue to the region.

When Defense is such an important part of the local economy, (45% of regions gross output is from defense spending) it is important  to look at the entire issue of military impact on the region.  The local elected officials need to be aware of the present DOD actions and be prepared for requested BRAC’s. Don’t anticipate any major base recommendations of base closure but need to be aware of the tenant activities that could be possibly be relocated to other DOD facilities.

MY CONCERN; Reported in the Pilot 13 February  “Members of the Hampton Roads’  congressional delegation generally were pleased with parts of the Obama administration defense proposal that focus on continual funding for shipbuilding and ship repair and keeping intact the Norfolk-based fleet of five aircraft carriers.” Reported on WVEC 14 February, “Despite many changes,’ elected official’ is upbeat—that in the face of half a trillion dollars in defense cuts, Hampton Roads will only lose 3,000 military personnel.

MILITARY AFFECTS ALL

Budget Update/Carrier to Mayport

Budget update/Carrier to Mayport; There were hearings in Congress last week discussing the DOD FY 2013 budget. The Secretary of Defense, Panetta , the Chairman of the Joint Staff, General Dempsey and all the Service Chiefs have appeared before House and Senate committees and sub-committees (House and Senate, Armed Services, Appropriations, Budget) answering questions concerning the budget.

After listening to many of the hearings, Secretary Panetta was adamant that DOD had submitted a budget that could support the new Strategy and the $480 billion cut over the next 10 years, and that was all DOD could cut. He went on to say, more defense cuts would hurt U.S. security---No budget can be balanced on the back of defense spending alone---to be serious All spending needs to be on the table. He said in the 2013 budget all states would be affected, and to achieve reductions two BRAC’s were requested. He realized that there would be attempts to change the requested budget, but if programs were reinstated others would have to take larger cuts. The Secretary was asked if DOD had planned on additional cuts that would take effect in January 2013 through sequestration. Panetta said they had not considered any further cuts, to do so he would need to cancel the New strategy and would need the “meat axe” approach to any cuts beyond those in the current budget. He said any further cuts would be ‘devastating’. General Dempsey said if any further cuts were mandated, the U.S. would no longer be a Global Power.

The chairman of the Senate Budget committee, Kent Conrad (D N.D.)  told the Secretary, the Defense department will have to reduce their budget further, more than the $487 billion proposed in the 2013 budget. The Secretary again expressed concern about the country’s security if more cuts in defense were taken. I did not watch all the hearings, but what I did see, most of the questions from members addressed specific projects in their districts/states.. There was concern expressed by many of the requested two BRAC’s. Military healthcare, TRI-CARE was discussed and the Senator from New Hampshire, Ayotte, was concerned the Tri-Care changes would have on the military and she felt if cuts were needed ALL government employees, including congress should take cuts.

Senator Nelson (D FL) asked about the lack of funding for the CVN move to Mayport in the 2013 budget, the Sectary of Defense assured him it was still in the DOD plan to move a CVN to Mayport. The Pilot reported last week the Secretary of the Navy in a visit to Jacksonville last week, “Even though we had to defer moving a carrier to Mayport, because of purely budgetary considerations, we remain absolutely committed to strategic dispersal of our forces on the East Coast—this is a deferral and not the end”. The CVN to Mayport is alive.

Bill Bartel reported in the Pilot today, “Changes are coming to Hampton Roads”. We know we are losing 10 ships and over 7,000 jobs. We understand the shift to Asia/Pacific, but it is apparent there is also a shift to Mayport. (ARG, PC’s and DDG’s  and maybe a CVN to Mayport)

Impact of Budget on Retirees!

Impact of Budget on Retirees; Besides the loss of Ships/Jobs to the region the Defense Budget has proposed significant changes/higher fees for every part of the military population. The changes will affect retirees of all ages, Guard/Reserve members and active duty families. The DOD increases have received many negative comments concerning the increases and it will be up to congress to protect the military benefits.

The changes called for a significant higher Tricare  fees for military retirees, including Tricare for life, higher Tricare Prime & Standard fees and Pharmacy co pays would more the double.  (Navy Times 23 Feb, an example;---annual enrollment fees for retirees in Tricare Prime to rise next year by 30 percent to 78 percent, from the current $460 or $520 for families to between $600 and $820 and could rise to as much as $2,048 within five years depending on retirement  income) DOD has figured they could shift about $13 billion in health costs from DOD to retirees over the next 5 years.

The higher DOD health care costs will have an impact on all military; especially hard hit will be the older retired community on a fixed income.

Oh By The Way; More possible ships leaving the region and going to Mayport according to Rep Crenshaw FL;  besides those ships already mentioned going to Mayport (3 Amphib’s , 3 PC’s and the new LCS) In a Florida Times Union article,  the Navy plans to send three destroyers (DDG’s) to the Florida base. No word where they will be coming from. In an article on 23 Feb in Naval News Service, Admiral Greenert CNO, in Naples said, ‘The Navy would like to double the number of patrol boats in Bahrain, increasing the fleet of five patrol boats there now by moving some that are currently stationed in Virginia. Loss of DDG’s and PC’s will add to the loss of 7743 jobs to the region.