355 Ships? Acting Navy Secretary Readies To Defend Tight Budget

WASHINGTON: Acting Navy Secretary Thomas Modly expects the long-awaited plan for 355-ship fleet to land on his desk this week. But comments he and the Navy’s top admiral have made in recent days make it clear the service is struggling to find a affordable pathway to make it happen without hurting the existing fleet. 

“I’m very focused on making sure we grow the size of our Navy, but I don’t want to grow a hollow Navy,” Modly told me by phone while visiting a Navy installation in Hawaii. Concerned about buying more ships without also adding money to maintenance and repair accounts, he said it’s not “responsible to sacrifice the size of the fleet for the safety of the fleet.”

Modly’s careful phrasing underscores the serious bind Navy planners are in. Even though President Trump made 355 a central theme in his run for the White House, the Navy knows it won’t get much help from the White House to get there.

In a leaked memo from the Office of Management and Budget in December, the scale of the Navy’s coming reckoning was laid bare. The service argued it was prepared to buy a dozen fewer ships and possibly decommission 12 more over the next four years to keep the fleet ready today, and consolidate funds for a massive modernization program that will dominate budgets in just a few years,.

There’s little chance Congress would sign off on such a move, and deep cutbacks would fly in the face of President Trump’s boasts of rebuilding the military during his three years in office. But under a two-year budget deal reached between Congress and the White House this summer, the 2021 defense budget would be $740 billion, only slightly up from 2019’s $738 billion, meaning there’s no extra money for starting the work of adding dozens of new ships. 

It’s unclear, in these days of moving money from the DoD budget to the border wall, impeachment, and the coming presidential election, if the White House is still paying attention. Bryan McGrath, head of The Ferrybridge Group consultancy and a former destroyer captain, said that while “the president has called for 355 ships, he has not made it a priority in his administration, and the Navy has historically only grown through presidential leadership.” At the Pentagon, “it doesn’t not appear that this Defense Secretary is as interested in getting a larger Navy as quickly as either the president or Modly” have advocated, throwing the whole project into some flux.

Given the flat trajectory of the Pentagon’s budget, the Navy is up against what might be the trickiest spending plan of any of the services. Even as it continues to struggle to get ships repaired and refitted on time, leaders are looking for funding to enter into a long-planned — but suddenly fragile — expansion of shipbuilding: a new class of aircraft carriers, a new class of frigates, and a deep overhaul of its nuclear-powered Virginia-class submarines. And there’s the biggest ticket item looming on the horizon is the $128 billion project to build Columbia-class nuclear-powered submarines, which soon will eat up some 30 percent of the yearly shipbuilding budget. 

“We need more money,” Chief of Naval Operations Adm. Michael Gilday said bluntly last week, admitting that current budgets are not “necessarily aligned with where we need to go.” The admiral’s remarks set off a bit of a Washington DC foodfight, with the Army secretary and Air Force officials shooting back that they weren’t receiving their fair slice of the pie, either.

Modly said he isn’t interested in creating tension between the services over money, but described a “confluence of circumstances that are working against us,” to get the budget the Navy says it needs. He also recognized “there are other priorities within the department” like nuclear modernization, space, and lingering readiness issues that are fighting for funds within a limited budget.

The acting secretary, who took over in November after Esper fired then-SecNav Richard Spencer in a whirlwind of accusations and counter-accusations over the handling of the case of a former Navy SEAL accused of war crimes, has made clear he isn’t interested in merely being a placeholder. He has issued sharply-worded weekly “Vector” memos tackling issues like the troublesome Ford-class carrier — one of the issues that helped push Spencer out the door — Navy education, and the quest for a 355-ship fleet.

One congressional staffer referred to the Modly memos as “please don’t fire me” memos meant for a White House that recently threw one Navy Secretary overboard. But others see a US Naval Academy grad eager to push the service forward after what some saw as some drift under Spencer.

“This is him taking charge and exerting his own strategic initiatives on the Navy,” said Bryan Clark, a senior fellow at the Center for Strategic and Budgetary Assessments and former special assistant to the Chief of Naval Operations.

Modly is “different from Spencer,” he added. “It didn’t seem like Spencer was as involved in the future of the Navy, and was focused on more managerial concerns like education, where Modly wants to look further down the road. What’s most needed right now is for the secretary to get involved in the future of the fleet, because there’s a lot of concern from other countries and the Pentagon about the future of the Navy.”

He’ll also likely testify before Congress to defend the Navy’s budget next month, as the White House has yet to officially nominate current Ambassador to Norway Kenneth Braithwaite to replace Spencer. Trump said he would tap Braithwaite for the job in late November, but has not sent the nomination to Capitol Hill.

Braithwaite’s potential nomination ran into some potential trouble this week after CBS News reported he failed to disclose a prior relationship with Cambridge Analytica in 2016 and 2017. The company was shuttered last year following revelations of its misuse of data gleaned from millions of Facebook users in order to pepper voters with disinformation in support of Trump’s 2016 presidential campaign. Ambassador Braithwaite said he never reached an agreement to work with the company despite entering into a mutual non-disclosure agreement, and therefore was not required to disclose the relationship to Congress.  

It’s unclear when or if his nomination will make its way to Capitol Hill.

Since the 2021 budget is ready to go to the printers, Modly said the 2022 budget may be the one that sees serious growth in the Navy budget. “We were on a certain trajectory to grow based on the [fiscal year] ‘20 budget, and that trajectory still towards growth,” he insisted. “It’s just maybe in this one year that growth trajectory is arrested a little bit. But [fiscal year] ‘22 is where we really got to make the case for how we’re going to grow and what we’re going to grow to.”

This all comes back to the force structure report that Gilday and Marine Commandant David Berger will drop on Modly’s desk this week. He would not commit to making the report public right away, and cautioned there’s a good chance he or Esper will ask service leaders to go back and do more work.

“We’re not slowing down on the path for a larger Navy,” Modly said. “We’re making trades — clearly we’re making trades to invest in modernization that’s critical for us.”