Memorandum Outlines Services' Funding Plans

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Memorandum Outlines Services' Funding Plans

Air Force may trim as much as a third from JSF purchase
By Jason Sherman
Air Force Times, August 23, 2004, Pg. 12

The military services are proposing new six-year spending plans that would pare back planned buys of fighters and gouge shipbuilding accounts, according to industry and government officials. The Office of the Secretary of Defense on Aug. 2 took receipt of the individual services' 2006-2011 program objective memoranda that detail what programs the services intend to fund through the end of the decade - as well as those programs they don't plan to support. The Office of the Secretary of Defense is reviewing the proposals and ultimately will decide what the Pentagon forwards to Congress for consideration. Industry officials familiar with parts of the classified budget documents say the Air Force and the Navy propose significant cuts to the number of warplanes in the Joint Strike Fighter program. The Air Force is planning to trim its total buy by one-third, according to two industry officials familiar with defense spending plans. The Navy proposal includes $6 billion to fund only four ships, one of which is a logistics vessel. The spending proposal calls for funding an LPD-17 amphibious assault ship, a Virginia-class submarine, a DD(X) destroyer and a T-AKE logistics ship. Previous budget plans had called for the Navy in 2006 to also purchase a second T-AKE ship along with a Littoral Combat Ship. Navy officials are preparing a briefing on current shipbuilding plans that the service hopes to provide to President Bush at his ranch in Crawford, Texas, later this month.

Officials familiar with the POM say Navy leaders are seeking broad authority to manage their shipbuilding accounts differently, including paying for ships incrementally. The Navy's proposal, said one official, pulls funds from programs that are facing delays and allocates resources that can't be spent to other programs. Among programs that will see their accounts cut because of delays are the Navy's contribution to Joint Strike Fighter and the Marine One modernization program to recapitalize the presidential fleet of helicopters. The Navy, according to an industry official, will cut the size of its aircraft carrier fleet from 12 to 11 and will delay by one year construction of the CVN-21 aircraft carrier. 'I think the Navy constructed this POM with the intent of signaling that its current funding for shipbuilding is untenable,' said one industry official.
'This is clearly a cry for help from the United States Navy', said Cindy Brown, president of the American Shipbuilding Association. 'It is clear that the Office of the Secretary of Defense [and] the Office of Management and Budget [are] going to have to get the Navy additional money so that it can keep the Navy afloat.' Officials familiar with the Army budget say that service over the next six years will shoulder the burden of force-structure relocations outlined in the Global Posture Review and will require additional funds in order to continue with its modernization plans while carrying out a heavy slate of current operations. Defense spending over the last three years has risen more than 50 percent, from $354 billion to $547 billion, including costs of operations in Iraq and Afghanistan. The increasing costs of those operations are beginning to have an impact on the Pentagon's plans to acquire more weapons and equipment, said one analyst. 'Modernization accounts are one of the only places to get cost savings,' said Jay Korman, a defense analyst with DRI International, a consulting firm in Washington. 'I think industry is kind of nervous right now.'
The Office of the Secretary of Defense is studying proposed six-year spending plans that would trim planned buys of fighter aircraft and gouge shipbuilding accounts. The Air Force and Navy back plans for significant cuts in the number of warplanes in the Joint Strike Fighter program, with the Air Force planning to reduce its total buy by one-third. The Navy proposal calls for $6 billion to fund only four ships, one of which is a logistics vessel.

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