The U.S. military may run out of personnel funds before the end of the year, be forced to scale back operations and see ongoing modernization efforts harmed if Congress fails to pass a defense spending bill by the end of next week, service leaders warned Tuesday.

The undersecretaries of the Army, Navy and Air Force said they’d have billions of dollars in “misaligned” funds — money that exists but not in the right budget lines to support their current spending needs — if they’re stuck with a full-year continuing resolution that keeps fiscal 2023 spending levels through the rest of 2024.

They agree that they’d have to prioritize current operations first, then people and then acquisition and modernization in a CR.

“You see sailors and Marines across the globe today, performing important missions: the Red Sea is an excellent example of how current operations take precedence,” Navy Under Secretary Erik Raven told reporters at the Pentagon.

Without sufficient funds, he said, “we have to make tough choices. But between the ability to fight tonight and be ready for all the threats, versus preparing for the future and modernizing our forces — it is a tough decision, but we have to lay our chips somewhere, and that’s on the ability to perform our missions today.”

Raven said the Navy’s ability to make that prioritization, though, would require Congress to grant the services some “unprecedented flexibilities” in the form of massive reprogrammings, or moving money from one line item into another.

The Navy, for example, would have $26 billion in the wrong places, and would need Congress to approve $13 billion in formal reprogrammings — more than twice the money Congress approves for the entire Defense Department in a typical year, he said.

But the reprogramming frenzy would be vital to mitigate the risk the services would take in their modernization efforts and industry would face if contracts are delayed or nixed altogether.

The Army is facing a similar misalignment in funds, to the tune of $6 billion.

“These are production rate increases, new starts — both in programs for acquisition as well as military construction projects that we cannot start,” Army Under Secretary Gabe Camarillo said.

The Air Force’s misalignment in funds equates to over $13 billion and “impacts are particularly challenging in the Space Force, who has seen their budgets rising over the last couple of years,” Air Force Under Secretary Jones said.

‘Burning hotter’

Further complicating funding this fiscal year is the fact that Congress has yet to pass a sweeping supplemental request, which the Pentagon hoped would supply weapons to Ukraine and Israel in support of ongoing wars for both countries and would also fund the Southwest border mission. The lack of supplemental funding compounds the impact of a long-term CR, Camarillo said.

The Army is spending $500 million out of its base budget for operations costs in the European theater, another $100 million in the U.S. Central Command area of operations and another $500 million for the operations along the U.S. Southwest border.

“At one point in time, there was a thought that all of this could be funded through a supplemental, and it is now currently, today, in FY24, being funded 100% out of the Army’s base budget,” Camarillo said.

“We are just burning hotter than we normally would across all of our appropriations accounts,” he said. “[U.S. Army Europe and Africa] in Germany has explained that … they will run out of money this summer in the absence of extraordinary relief, aka a reprogramming.”

This will be a problem across the board, he added, to include running out of funds in the Army’s military personnel account.

Industry impacts

The services planned to ramp up munitions spending in FY24, to bolster their own stockpiles as a hedge against a future fight and to replenish allies’ and partners’ stocks.

A year-long CR puts that industry ramp-up in peril.

Camarillo said he was “particularly concerned” the CR would not allow the services to “send that strong signal to give industry the incentive to be able to facilitize, invest in a workforce and be able to do those extra shifts that we know that we need in order to restore our munitions.”

Camarillo said the Army intended to kick off a multiyear procurement effort for the Patriot Advanced Capability-3 Missile Segment Enhancement (PAC-3 MSE) interceptors in FY24. Under a full-year CR, it would be $1.2 billion short to reach the production rates needed to achieve the economic order quantities and savings associated with the multiyear procurement deal.

Lockheed Martin has invested significantly in the PAC-3 MSE line to grow production from 550 missiles per year to 650. The Army requested in its FY24 budget $775 million to ramp up that production. The company intends to grow production beyond 650 in the following year, as demand increases due to the war in Ukraine and conflict in the Middle East.

Camarillo added the Army could not begin to field its Mid Range Capability missile to the first unit, which is important to its Pacific deterrence, due to new programs not being allowed to start under continuing resolutions. Nor could it increase production levels for the Guided Multiple Launch Rocket System, Javelin missile, and 155mm munitions.

“I will just say that we have always said our goal was to get on 155 artillery 100,000 per month rounds by the end of calendar year ‘25. We cannot get there unless we get both the appropriation and we get the supplemental,” Camarillo said.

“It’s very challenging, because we’re asking industry to lean as far forward as they possibly can and to make investments both in additional personnel, unique tooling and machining that’s required to ramp up production capacity,” Camarillo said.

And the Army planned to buy 225 Coyote counter-unmanned aerial system interceptors – a spending need that hits home, he said, due to the recent deaths of three soldiers in Jordan who were killed by a drone strike from Iran-backed militants — but those, too, could not be purchased in a year-long CR.

For the Navy, Raven said the sea service wanted to double its Standard Missile 6 spending — something particularly timely, as Navy ships are expending the older SM-2 missiles almost daily in the Red Sea, shooting down Houthi missiles and drones — but that cannot happen under the full-year CR.

After the Navy just last week awarded a maintenance contract to HII’s Newport News Shipbuilding to overhaul the attack submarine Boise – which has languished at the pier since 2015 and has been unable to undergo repairs at either a public or private repair yard – Raven said a full-year CR would render the Navy unable to actually fund and execute that contract this year due to a $600 million shortfall in the submarine maintenance funds.

It would also see a $800 million shortfall in amphibious ship spending that could put at risk America-class amphibious assault ship construction, a $2 billion shortfall in submarine construction spending that would threaten the Virginia-class attack sub program, and more.

For the Air Force, Kristyn Jones, who is performing the duties of the under secretary of the Air Force, said the service has five contractors onboard for its collaborative combat aircraft effort, but that wouldn’t be able to move forward.

The full-year CR would also hamper production increases on the Joint Strike Missile and the F-35A Joint Strike Fighter, both of which the Air Force says it needs for a high-end fight, as well as spending on the Joint Air-to-Surface Standoff Missile for facilitization to support future production increases.

“We hear over and over: the industry wants that solid demand signal so they know how to invest, they can support the facilitization — and by having this uncertainty, it really has negative impacts across the defense industrial base,” Jones said.

The milestone — something the Defense Department and the other armed services still have not achieved — comes after almost two decades of trying to prepare the Corps’ records and several failed audits along the way.

During this two-year audit, the Marine Corps had independent third-party auditors from Ernst and Young vet the value of all its assets listed on financial statements. The Corps also had to prove that every single item existed and was where the service said it was.

Gregory Koval, the assistant deputy commandant for resources, told reporters the audit team made more than 70 site visits in the U.S. and around the world. In these visits, they checked more than 7,800 real property assets such as land and buildings; 5,900 pieces of military equipment; 1.9 million pieces of non-ammunition supplies, such as spare parts; and 24 million items of ammunition, some of which are stored at Army and Navy facilities.

If a vehicle wasn’t where it was listed as being because it was out conducting operations, or a piece of ammunition wasn’t there because it had already been shot in a recent exercise, the Corps had to show documentation or photos of that, too, in order to explain discrepancies.

Koval said the final financial report states the Marine Corps passed its audit but still has some areas where it can improve.

Lt. Gen. James Adams, the deputy commandant for programs and resources, said one area of focus is automating processes. Today, there are disparate systems where data must be manually moved from one system to another, introducing the opportunity for error. The service is moving toward integrated, automated systems that would avoid human error in sharing information between human resources and financial data systems, for example.

Adams said that passing the audit now will make all future ones more manageable. This last audit asked a third party to validate the existence and the value of every single thing the Marines own, which required significant historical research, he explained.

Subsequent audits, on the other hand, will be able to assume the past information is correct and therefore only cover “from this point forward,” instead asking Marines to prove information related to that fiscal year’s financial transactions.

Adams said the Corps got close to completing past audits in a single fiscal year, but because of the immense historical research, they couldn’t get the audit completed and over the finish line in a single year. For the fiscal year 2023 audit, the service requested an extension, which could prove to be a model for the other services.

“It was a goal of the commandant of the Marine Corps to pass the audit because he wants to show the credibility of the Marine Corps back to the Congress and the taxpayer,” Ed Gardiner, the assistant deputy commandant for programs and resources, told reporters.

In addition to having more time, this audit also used the military’s new general ledger software, Defense Agencies Initiative, in which auditors had confidence, according to Gardiner.

Gardiner explained the services were, by law, supposed to start financial audits in the 1990s, but the Marine Corps didn’t begin producing statements in preparation for an audit until 2006. The first audit in 2010 showed plenty of room for improvement, he said. In late 2013, the Marines announced they had passed a limited-scope audit for fiscal year 2012 — but in March 2015, a number of financial and oversight leaders reported the results were unreliable and the clean pass would be rescinded.

In 2017, the Marine Corps began conducting full financial statement audits.

The 2023 full financial statement audit was conducted to the highest standards, Gardiner said, with the Ernst and Young team not only being audited themselves by a peer-review team but also by the Pentagon’s inspector general team.

“We’ve been all the way to the end of the process, and we have lessons learned that we can share with the rest of the department,” he said, adding the Marine Corps hopes these lessons “can be an accelerant for the rest of the department.”

Pentagon Comptroller Michael McCord made similar remarks in November 2023, when the Pentagon failed its sixth audit since 2018.

Noting the Marines’ extension, McCord said that “we are very focused on it as a test case for the department and the larger services.”

“Whatever results of that may be when we get the auditor’s final opinion, I want to commend the USMC and, in particular, (Marine Corps Commandant Gen.) Eric Smith for their leadership and effort,” McCord added.

Carlos Del Toro said Thursday the Maritime Economic Deterrence Executive Council is needed because other countries have taken steps that threaten the Navy’s technology development and supply chain.

He described “exploiting supply chain vulnerabilities, adversarial capital investments in companies developing technologies that are critical to our fleet and our force” and ongoing “intellectual property theft” as “concerted actions designed to weaken our competitive advantages, not only at sea but on the world’s economic stage.”

The new council is co-chaired by Vice Adm. Francis Morley, the top uniformed advisor to the Navy’s acquisition community, and Chris Diaz, the secretary’s chief of staff, Del Toro said at an Aspen Strategy Group event in New York.

The council includes representation from the research and development community, supply chain and critical infrastructure experts, and intelligence and law enforcement organizations within the Department of the Navy.

Del Toro said this group, using authorities already granted to the department, “will focus on mitigating adversarial foreign investment risks, innovation and technology protection, supply chain integrity initiatives, and the coordination and protection of research efforts across both the government as well as the private sector.”

Morley, speaking at the same event, said the group had an initial meeting to discuss the challenges ahead. He said the meeting made clear each community has been taking its own steps to protect intellectual property, research and supply chains, but that they could accomplish more working in tandem.

Del Toro said the council’s establishment follows other Biden administration efforts to shore up “seams” between the military, the traditional defense industrial base and the innovation sector.

He cited the 2022 CHIPS and Science Act as an early step to ensure American independence in critical technology and manufacturing sectors.

The White House Office of Science and Technology Policy this month released a 2024 list of critical and emerging technologies with national security importance, including artificial intelligence, hypersonics and quantum information.

And, he added, the Department of Defense last month released its first-ever National Defense Industrial Strategy outlining how to modernize the defense sector.

Sen. Mark Kelly, D-Ariz., and Rep. Michael Waltz, R-Fla., headed a Jan. 29 letter signed by 19 lawmakers and sent to the White House, noting China is “expanding its strategic influence over the oceans.”

“It is building a global maritime network, on which the American economy and critical maritime supply chains have become increasingly reliant,” the letter adds. “Meanwhile, the U.S. has failed to give proper attention to the elements of our national sea power.”

The lawmakers note China’s “intimidation” in the South China Sea and the Houthi attacks in the Red Sea are “recent examples of the risks we face in the maritime domain.”

The letter seeks three key changes:

• The establishment of an interagency maritime policy coordinator, who would report to the president and “synchronize national maritime policy and influence industrial base resource decisions across military, civil, and commercial dimensions.”
• A presidential determination that establishes commercial, civil, and military shipbuilding and shipping industries — along with their associated infrastructure and workforces — as “critical infrastructure sectors,” making them eligible for investments under the Defense Production Act Title III authorities.
• The development of a national strategy focused on “de-risking” the U.S. maritime domain from China and other maritime threats.

Kelly in December unveiled plans to support the U.S. maritime industry. The senator said he wanted to see incentives to build more merchant ships that would conduct private business most of the time, but could be called into military service if needed.

Additionally, he called on the Navy to commit to buying more sealift ships to support companies that build big tankers and cargo ships.

Navy Secretary Carlos Del Toro has also pushed for improvements to the commercial shipbuilding and ship repair industries, as a means of bolstering the U.S.’ overall maritime security and naval power.

In November, the secretary convened the first-ever meeting of the Government Shipbuilders Council, where the departments of Defense, Homeland Security, Transportation and Commerce could begin to align their shipbuilding and ship repair plans.

The lawmakers’ plan would elevate the work Del Toro started to the White House level.

Matthew Paxton, president of the Shipbuilders Council of America, told Defense News any future national maritime strategy should include a “holistic view” of how U.S. shipyards and companies can participate in building up a fleet of U.S. naval warships, auxiliary support ships, U.S.-made Jones Act merchant ships that can be called into service and more.

“The national maritime strategy would ideally incorporate feedback from the Government Shipbuilders Council to get a full picture on the needs of all our government customers,” so companies can design dual-use commercial ships that also meet government requirements on fuel efficiency, berthing capacity, tonnage requirements and more, he said.

WASHINGTON, LONDON and PARIS — Several nations have announced their contributions to Operation Prosperity Guardian, a new multinational security initiative in the Middle East to help protect merchant ships in the Red Sea area from drones and missiles.

U.S. Defense Secretary Lloyd Austin formally announced the effort Dec. 18, after previously hinting that collective action is required to protect civilian ships in the region.

To date, Houthi rebels in Yemen have launched at least 100 attacks with one-way drones and ballistic missiles, targeting 10 merchant vessels that represent more than 35 different nations, according to a readout of a virtual meeting between security group participants.

“Operation Prosperity Guardian is bringing together multiple countries to include the United Kingdom, Bahrain, Canada, France, Italy, Netherlands, Norway, Seychelles and Spain to jointly address security challenges in the southern Red Sea and the Gulf of Aden, with the goal of ensuring freedom of navigation for all countries and bolstering regional security and prosperity,” Austin said Dec. 18.

He noted this effort will fall under the purview of the Combined Maritime Forces — a multinational maritime partnership based in Bahrain — and its Task Force 153. The CMF is made up of 39 nations, and its various task forces help secure the Gulf of Oman, the Indian Ocean, the Persian Gulf, the Red Sea and the Gulf of Aden. Some task forces also focus on countering piracy across the region as well as and training and partner-building activities.

About 20,000 commercial vessels transit the Red Sea and Gulf of Aden every year, according to the French Navy. Task Force 153 specifically covers the Red Sea and was established in 2022 to address human trafficking and smuggling of both legal materials like coal and illegal weapons and drugs, Defense News previously reported.

The readout of Austin’s meeting noted that task force “could be leveraged to deter attacks under the CMF,” but the Defense Department declined to provide additional information.

Here are some details about forces participating in Operation Prosperity Guardian.

Britain

Britain has committed a Type 45 destroyer equipped with air defense weapons to the international task force.

The Defence Ministry announced Dec. 19 the destroyer HMS Diamond will lead the Royal Navy’s contribution to Operation Prosperity Guardian.

HMS Diamond has been in the region for a little more than two weeks and moved to the Red Sea on Saturday. It was almost immediately called into action to shoot down a suspected Houthi drone aimed at a commercial ship in the area. This was first time the Royal Navy shot down an aerial target since the Gulf War in 1991.

“This is an international problem that requires an international solution. That is why HMS Diamond has joined Operation Prosperity Guardian,” Defence Secretary Grant Shapps said while announcing the work with the security group.

British forces have been on hand with a small fleet of ships in the region. For example, the military operates a flotilla out of Bahrain that includes the frigate HMS Lancaster, three mine-hunting vessels and a Royal Fleet Auxiliary support ship.

Italy

Italy will do its part to counter “destabilizing terrorist activity” by sending the multimission frigate Virginio Fasan to the Red Sea, the country’s Defence Ministry said in a statement.

Italian Defence Minister Guido Crosetto and Austin discussed maritime security in a video call Tuesday, including options for securing shipping routes to avoid economic repercussions and “dangerous impacts” on commodity prices.

“It’s necessary to increase the presence in the area in order to create the conditions for stabilization, to avoid environmental disasters and also to avoid a resurgence of the inflationary push,” Crosetto said in the statement.

France

The French multimission frigate Languedoc has been patrolling the Gulf of Aden and the southern area of the Red Sea since Dec. 8 to secure freedom of navigation, the French Navy said in a Dec. 15 statement.

The Languedoc shot down two drones coming from the direction of Yemen that appeared hostile on the second day of its patrol duty. The frigate destroyed a drone threatening the Norwegian oil tanker Strinda on Dec. 11, before moving in to protect the stricken tanker and prevent a hijacking, according to the Navy. A fire aboard the Strinda was brought under control without injuries.

Norway

Norway will dispatch as many as 10 staff officers to the Combined Maritime Forces, the Norwegian Defence Ministry said.

Marita Isaksen Wangberg, a ministry spokesperson, told Defense News the country isn’t sending any vessels.

The Netherlands

The Netherlands plans to contribute two staff officers to the operation. The country doesn’t have any vessels in the area at this time, and the contribution of ships is under review, Navy spokesperson Alex Kranenburg told Defense News.

Spain

Spain has not made a decision regarding its participation in Operation Prosperity Guardian, the Defence Ministry’s spokesperson, Nuria Fernández de la Fuente, told Defense News. Any participation by Spain, the representative added, would not be unilateral but within the framework of NATO or the European Union.

Sen. Mark Kelly, D-Ariz., said Tuesday the government must include the Merchant Marine as part of its effort to deter China.

Speaking at an event by the Center for Maritime Strategy and the Naval War College Foundation, he said he has readied but not yet filed legislation that seeks to accomplish three goals.

First, he said, it’s meant make it more cost-competitive to operate a U.S.-flagged merchant ship. American law requires a U.S.-flagged vessel to move goods between two American ports — but for international shipping, it’s much cheaper for private companies to move their goods on foreign ships.

“There are some tools in the toolbox for the Maritime Security Program, to the tax system, that we can consider to make U.S. flags more attractive,” said Kelly, who sits on the Senate Armed Services Committee and is a graduate of the U.S. Merchant Marine Academy.

Second, the senator said his bill seeks to grow American shipbuilding capacity by expanding existing shipyards and supporting the creation of new ones to build commercial ocean-going ships. These ships would conduct private business most of the time, but the military could call them into service if a conflict erupted.

Kelly said the Navy would have to do its part in this effort, committing to buying more sealift ships to support this expanded industrial base.

And third, the senator said, his bill will invest in the maritime workforce by helping the U.S. Merchant Marine Academy and state maritime schools increase their enrollment, prioritizing maritime careers in federal workforce development programs, and boosting tax and licensing incentives for experienced mariners to stay on the job with American shipping companies.

“There’s a lot that needs to be done to revitalize this industry,” Kelly said.

Navy Secretary Carlos Del Toro has increasingly viewed the commercial maritime industry as pivotal to a strong military fleet — both because the Pentagon would lean on these merchant ships for sealift missions in the event of war, but also to bolster the overall shipbuilding and ship repair industry needed for warships.

He recently convened the first-ever meeting of the Government Shipbuilders Council so the departments of Defense, Homeland Security, Transportation and Commerce could begin to align their shipbuilding and ship repair plans.

From 1953 to 2016, the number of shipyards capable of building large, oceangoing military and commercial vessels declined from 30 to six, and their annual output declined from 60 to seven, according to an analysis of U.S. shipbuilding records.

Now, Navy Secretary Carlos Del Toro is raising the alarm, warning that the service won’t be able to fulfill its mission without a strong commercial counterpart.

A thriving maritime industry would mean more trained builders and maintainers the Navy could tap in the event of a crisis; more dry docks and construction facilities the service could leverage; and more investments in innovative tooling, technology and processes to build ships faster and cheaper.

And, chiefly, it would mean a larger fleet of American-built ships the military could call into service if a war broke out.

Del Toro wants to see this commercial maritime might become a reality through an emerging initiative he’s calling “maritime statecraft.”

He introduced the idea in a September speech at Harvard University, saying it “encompasses not only naval diplomacy but a national, whole-of-government effort to build comprehensive U.S. and allied maritime power, both commercial and naval.”

Del Toro told Defense News in a Nov. 13 interview the decline in commercial maritime capability “has exposed ourselves, as a nation, to shipbuilding, sealift and economic trade vulnerabilities.”

According to 2022 CIA estimates, China has 7,362 merchant ships, or commercial vessels engaged in carrying goods. The United States has 178.

If war broke out, the United States could call 60 American merchant ships into service through its Maritime Security Program to supplement about 100 government-owned merchant ships that were mothballed but could return to service. They would help move military vehicles and materiel into a theater.

But China, which the Pentagon considers the greatest threat to U.S. security, has a far greater ability to compel private companies to support the military, and it has a significantly larger fleet of commercial ships to lean on.

Del Toro said the United States can no longer afford this imbalance.

“Maritime statecraft, basically, is a Department of the Navy effort to drive not just our own initiatives but a whole-of-government awareness, advocacy and action to rebuild the comprehensive maritime power of the nation in order to meet the challenges and opportunities we’re going to face as a maritime nation in the 21st century,” the secretary said.

Rebuilding American shipping

After decades of fewer yards building fewer ships, the American maritime industry requires revitalization and modernization, Del Toro explained. To achieve this, he said he’s working with his counterparts across the government to identify what the shipbuilding industry needs and how government can help.

In mid-November, he called a meeting with several other entities at the first-ever Government Shipbuilders Council in Baltimore, Maryland. Participants included the Army, the Office of the Secretary of Defense, the Coast Guard, the Maritime Administration, and the National Oceanic and Atmospheric Administration.

Days before the meeting, Del Toro said he hoped it would be the start of a “conversation about a whole-of-government vision for maritime statecraft.”

For example, he explained, the Maritime Administration successfully partnered with the Philly Shipyard to deliver the first national security multimission vessel on time and on cost in September.

Del Toro said other government agencies could leverage this program.

He also pointed to a tool left unused since the Reagan administration: “construction differential subsidies” to incentivize private companies to buy ships from American builders instead of cheaper foreign yards.

This provision of Title 46 of the U.S. Code, which allows the government to pay up to half the cost difference, hasn’t received funding since the early 1980s. But Del Toro said he and the Transportation Department’s secretary still have the authority to grant these subsidies, as long as he and the homeland security secretary certify there’s a national security need for a vessel.

“Initial funding, for example, for a single vessel — even if phased out over several years, since the accounts can be funded indefinitely — would send a powerful signal to shipbuilders that the program is being revived,” Del Toro said, though he did not address whether or how this might be incorporated into the fiscal 2025 budget.

The need for private capital

Del Toro, himself a businessman, has been encouraging private investors to spend money on small- and medium-sized shipyards and their suppliers.

His pitch: This is a worthwhile investment that would help the U.S. commercial shipbuilding sector assist the Coast Guard and the Navy in more rapidly building better and cheaper vessels.

While nothing concrete has come of these talks, Del Toro said he’s encouraged by the fact investors are “intrigued.”

He’s also looking for foreign investment in U.S. small- and medium-sized shipyards. As examples, he cited Australian company Austal’s purchase of its Austal USA yard in Alabama in 1999 and Italian company Fincantieri’s purchase of its Fincantieri Marinette Marine shipyard in Wisconsin in 2009.

“We’re still fully committed to the Jones Act,” which calls for American-built, -owned and -operated ships to move goods between American ports, he said. “But having said that, there are opportunities, I believe, as we continue to expand the commercial and naval marketplace — especially the commercial marketplace — for them to invest in some of our shipyards.”

Noting Japan and South Korea previously bought shipyards overseas, and then modernized and automated the facilities to a degree that far surpasses the capability of many American yards, Del Toro said “encouraging them to make investments here could be a powerful statement, if the business case allows it.”

Leveraging renewed maritime might

U.S. leaders have accused China of waging a governmentwide effort to threaten its neighbors at sea by using the People’s Liberation Army Navy, the Coast Guard and its maritime militia fleet of fishing vessels to harass foreign sailors operating in their nations’ exclusive economic zones while fishing, exploring the seabed for natural resources, and drilling for oil and gas.

Del Toro said the U.S. needs to be able to push back and help allies and partners deal with geopolitical, economic and climate-related challenges. He pointed to a 2020 incident in which Chinese ships harassed a West Capella drillship hired by Malaysia’s state-owned Petronas energy company to explore undersea oil and gas reserves.

“The U.S. 7th Fleet’s Task Force 76 began a remarkable prototype operation, pioneering a new approach to support our partners’ civilian vessels in standing up to China’s coercive maritime insurgency in the South China Sea,” Del Toro said in his September speech.

After U.S. Navy, U.S. Marine Corps and Royal Australian Navy forces “maintained a persistent presence in determined support of a partner’s sovereign, internationally recognized rights, China backed down,” he added.

To wield this greater naval might, Del Toro said the U.S. Coast Guard needs a bigger budget for more ships and operations, particularly in the Pacific. The Navy’s Military Sealift Command and the Transportation Department’s Maritime Administration will also play an increasingly large role in naval diplomacy and maritime statecraft, he added.

Internally, he said, the Navy is focused on closing gaps in its ability to operate and sustain itself overseas. He noted the service wants to increase its ability for Navy oilers to refill their stores from commercial tankers at sea instead of returning to a fuel depot ashore.

Additionally, he expects the Navy to demonstrate its ability to reload vertical launching system cells at sea next year, with a shore-based demonstration in the spring at Port Hueneme, California, followed by an at-sea demonstration in the summer.

Del Toro called these kinds of naval logistics “foundational” to the fleet’s ability to remain at sea in contested waters and conduct missions under the maritime statecraft banner.

An initiative without funding

Analysts praised Del Toro’s approach, but agreed there’s a lack of specifics.

Jerry Hendrix, a senior fellow at think tank Sagamore Institute, said the secretary set “the right aspirational goal.” However, “none of this is real until it’s in the budget, and I have not seen parallel statements from either [the deputy defense secretary] or [the defense secretary] on the maritime statecraft initiative.”

“Additionally, we haven’t seen anything out of the West Wing. Until a more senior sponsor comes alongside, this is an initiative without funding,” Hendrix added.

Similarly, Brent Sadler, a senior research fellow in naval warfare and advanced technology at the Heritage Foundation think tank, said it’s unclear who within the Navy will own this strategy.

“The secretary asked for academics to research and help refine the ideas; this is needed, but not enough,” he explained.

Sadler added that Del Toro could start taking small actions now to implement maritime statecraft, particularly the naval diplomacy aspect.

He noted that using Navy and Coast Guard ships to protect allies’ and partners’ economic interests would reassure them they’re economically better off siding with the U.S. rather than China. Beijing has leaned heavily on its Belt and Road Initiative to invest in foreign ports and infrastructure as a means of gaining access and influence.

Furthermore, Del Toro could embed staff at the U.S. government’s International Development Finance Corp. to push for naval development projects, Sadler said, and could send Navy construction battalions to key Pacific island nations to improve ports, airfields and warehouses for fuel and ammunition storage.

“These would be seen quickly as bettering the local islanders’ livelihoods through improved tourism [and] trade as well as a foundation for future military operations — win-win,” he said.

Sal Mercogliano, who teaches at Campbell University and the U.S. Merchant Marine Academy, agreed that, given the Chinese government’s use of commercial and military assets for geopolitical purposes, the U.S. should do the same. Specifically, he said, growth in the commercial sector would generate a greater American presence overseas at a time when U.S. forces and other “hard power” fleets are focused on the Pacific theater but limited in how many ships they can keep forward deployed at any given time.

Mercogliano noted the secretary could follow up on his speech by attaching the Navy to the Maritime Administration’s National Security Multi-Mission Vessel program and ordering several more ships, which include large and reconfigurable spaces, to serve as hospital ships or tenders.

The secretary could also build on the success of that vessel’s acquisition model by leveraging it for new classes of sealift ships, the professor added.

And, Mercogliano said he’d like to see a written strategy that looks at both commercial and naval shipbuilding sectors — something lawmakers want, too. A November Congressional Research Service report notes “Congress has requested the executive branch formulate a national strategy toward achieving a competitive maritime industry four times in the last decade, most recently in December 2022 … and has requested three Government Accountability Office reports on the subject.”

Del Toro told Defense News he is already taking action, noting the Government Shipbuilders Council meeting would craft a path forward for government spending in the maritime sector in 2024 and beyond.

He added that he hopes activities already happening in the background will yield results in 2024, including visits to foreign shipyards and to small- and medium-sized yards in need of investment, as well as efforts to encourage large shipbuilders to outsource more work to smaller builders.

“We ask our allies and partners, both internationally and domestically, to think with us strategically and work with us and the Congress to be able to revitalize the commercial shipbuilding industry in this nation so that it can continue to contribute in even greater ways to a greater naval capability across our country,” Del Toro said.

The Senate’s bipartisan stopgap funding bill, released Tuesday, includes a rare exemption that would allow the Navy to start building the second Columbia-class submarine before Congress passes a full Pentagon budget for fiscal 2024. A rival stopgap funding bill introduced by House Republicans also includes the Columbia-class carveout. It’s unclear when Congress will pass the exemption into law, as unrelated issues threaten to spark a government shutdown at the end of the week.

While lawmakers broadly agree on the need to allow the Navy to procure the next Columbia-class submarine as soon as possible, that cannot begin until both chambers agree on a stopgap funding bill.

House Speaker Kevin McCarthy, R-Calif., has added several provisions to the House bill opposed by Democrats at the behest of the far-right Freedom Caucus, including a Republican immigration bill and non-defense spending cuts. And the bipartisan Senate bill includes another $6 billion in economic and military aid for Ukraine, which a growing number of House Republicans oppose.

The impasse means a government shutdown is likely. There’s no telling how long it may last, making it unclear when the Navy can procure the next Columbia-class submarine. And even if Congress does coalesce around a stopgap funding bill, it will still disrupt three other Navy ship programs: the Virginia-class attack submarine, the Constellation-class frigate and a new submarine tender replacement program.

Though the Navy does not want to see any of its acquisition programs disrupted, the Columbia-class ballistic missile submarine program holds particular national security importance.

The Columbia program replaces the aging Ohio-class ballistic missile submarines, which today prowl the world’s oceans with nuclear missiles onboard. Their entire mission is to remain hidden under the seas in case called upon for a nuclear strike. They will begin to reach the end of their lives and decommission in FY27.

The Columbia program is already on a tight schedule that’s growing ever tighter as construction challenges arise. The Navy originally crafted an “accelerated schedule” that would have delivered the first boat in the program six months ahead of its contractually obligated timeline, but Vice Chief of Naval Operations Adm. Lisa Franchetti told the Senate earlier this month that buffer was completely gone now due to a string of manufacturing, workforce and supply chain delays. The boat is still meeting its original contractual schedule, though, she noted.

The first boat, called the District of Columbia, must be delivered to the Navy by the General Dynamics’ Electric Boat yard in Connecticut by the fall of 2027 so it can undergo substantial testing ahead of a 2031 maiden deployment. If it misses that first patrol due to construction delays, the Navy and the country could see a gap in its at-sea nuclear deterrence in 2031.

The program will only grow more challenging from there, as the Navy picks up the pace and will begin to buy the massive submarines at a one-a-year rate, despite industry challenges on the first boat.

The second boat in the program is one of nine ships the Navy intends to buy in FY24, and Franchetti said the service, without the congressional carveout, would not be allowed to buy it and begin construction activities under the continuing resolution — which, depending on the length of the delay, risks a cascade of delays at the shipbuilder and its thousands of suppliers.

Federal spending caps for fiscal 2024 and fiscal 2025 forced the House Armed Services Committee to agree to retire aging ships and aircraft they may have otherwise fought to keep a little while longer, Rep Rob Wittman told Defense News.

But, he warned, “there’s probably going to be some gap” between when old platforms like the Air Force’s A-10s and the Navy’s cruisers retire, and when the services can fully rebuild their inventory.

“I think it really calls to the forefront the issue of using other smaller, less expensive, attritable platforms as the gap-filler,” Wittman, R-Va., said in a June 14 interview in his Capitol Hill office.

“Those things can be very, very capable, and these are platforms that are already out there that could go to production tomorrow. So unmanned surface vessels, unmanned underwater vessels — the Navy really has to push the gas pedal on this and say: ‘OK, how do we get these platforms integrated?’ ” added Wittman, who chairs the committee’s tactical air and land forces panel and also sits on its sea power and projection forces subcommittee.

Though Congress has questioned some of the Navy’s experimentation and acquisition efforts following expensive mistakes with the Littoral Combat Ship program, among others, Wittman said now is an appropriate time to take more risk in pursuing unmanned surface and subsurface vessels at a quicker pace.

The Navy has largely eyed programs of record based on the size of the platform: it’s aiming to award a contract for the Large Unmanned Surface Vessel’s design and construction in FY25, and a Medium USV would likely follow a few years behind. The Orca Extra Large Unmanned Undersea Vehicle program is running several years behind in the construction and testing of five prototype vehicles, but the Navy expects to see a version operating overseas by FY26.

Wittman said the Navy could potentially move faster if it focused on mission rather than size, which is more in line with the experimentation happening in the Middle East under Task Force 59.

“They need to go out there and say, ‘Listen, we believe this platform will do a great job as an addition to a carrier strike group, or as an addition to an [amphibious ready group], or destroyer squadron, or Virginia-class [attack submarine], or Ohio-class [ballistic missile submarine],’ and then buy a relative number that you can test very vigorously” for 12-18 months, and then either modify them or move into serial production, he said.

“The good news is, these things are at a price point where you can afford to take some risks. You can afford to have platforms that you look at and go: ‘Gosh, looked like it was going to work out, but it just didn’t,’ ” he added.

He’d also prefer the Navy have unmanned surface vehicles that can only perform surveillance missions, others solely meant for electronic warfare and more that only shoot weapons, he said, versus spent too much money and too much time trying to pursue a platform that can do it all.

“I just want the Navy to look at those things, and I think they can do that speed of relevance. That’s going to be the gap-filler because our exquisite platforms — aircraft carriers, our surface ships, our submarines — all great platforms, but it takes years and years and years to get them in the inventory. So even with the best of intentions, we’re not going to have that capability” in time for when China might attack Taiwan.

What about the Air Force?

The Tactical Air and Land Forces Subcommittee included language in its section of the FY24 National Defense Authorization Act setting cost limits for collaborative combat aircraft plans, which would see a drone serve as a wingman for crewed jets, such as the future Next Generation Air Dominance fighter.

Wittman said this is a preemptive measure, and not because he has concerns about collaborative combat aircraft. In fact, he explained, he is “very comfortable” with what he’s seen, including several vendors with many options that come in at a good cost point.

He also said he’s optimistic about the way the competition is looking at this early stage, but wants to avoid requirements and therefore cost ballooning.

“We’ve seen that too many times with programs where we’re chasing requirements, we’re chasing technology, and you never catch it. And then all of the sudden we see platforms that started out as [an] X-million-dollar platform [that] are now three or four times the cost,” he noted.

Air Force Secretary Frank Kendall wants the collaborative combat aircraft, or CCA, to be cheap enough that, in some cases, the service can afford to lose some in combat. A drone wingman that could be sacrificed might not need as many protective subsystems, which could help keep down costs, Kendall said at the September 2022 Defense News conference.

The service considers CCAs a way to deliver combat capability at a lower price point and to move away from recent spiraling costs of fighters and bombers.

For his part, Wittman considers these drones important in light of the retirements of legacy Air Force planes and a dip in inventory in the short term. He connected CCA efforts to another program, the F-35 Joint Strike Fighter, for which the NDAA proposes creating a formal “major subprogram” to focus on the continuous development and delivery of new F-35 capabilities, and designating six aircraft as permanent test assets for this work.

Wittman said the focus of these efforts is to address ongoing software issues as well as engine power and cooling challenges today, and prepare to quickly address challenges in the coming decades.

“Along with partners, there’s going to be 3,300 of these aircraft out there. What we don’t want is all of a sudden for somebody to come back in 10 years and go: ‘Oh, sorry, the whole fleet’s antiquated,’ ” he said. “So let’s do some rigorous testing and evaluation, figure out how do we make sure this platform gets maximum utility. And I think there are a lot of ways that they can do that — and especially if you combine this platform with combat collaborative aircraft, and you combine it with E-7s, which has to happen — all of a sudden this aircraft is a pretty significant gap-filler until you get to endgame.”

“But you don’t have its full potential unless you rigorously test what the challenges are with the aircraft. And that’s on every element of the platform, from the avionics to the software to the engine systems to the power and cooling,” he added, noting the designation of the major subprogram would signal the seriousness of this effort to the Pentagon and congressional appropriators.

Even with budget caps in place, Wittman said the Tactical Air and Land Forces Subcommittee is trying to make these adjustments.

“We are making smart investments in the FY24 NDAA by reprioritizing and reallocating funding requested for Air Force and Navy NGAD programs,” he said, noting his subcommittee is making investments in CCA refueling technology maturation and risk reduction within the Air Force’s research and development budget, in the Adaptive Engine Transition Program that would replace the current F-35 engine, and in F-15 procurement and E-7 advance procurement.

The provision in the FY24 National Defense Authorization Act would require both the Navy and Air Force secretaries to submit alongside their annual budget requests “development and technology maturation progress reports” for the Next Generation Air Dominance program and the complementary effort for collaborative combat aircraft.

NGAD is a sixth-generation fighter program that would pair with unmanned aircraft, including the CCA acting as a so-called loyal wingman.

Rep. Rob Wittman, R-Va., who chairs the House Subcommittee on Tactical Air and Land Forces, told Defense News that “the Navy needs to speed that up, so that’s why we want to report on what they’re doing.”

The Air Force is juggling several technology development efforts in parallel, including work on advanced engines and a next-generation tanker to give the NGAD fighter additional range in highly contested environments. Wittman said he wants to ensure one technology doesn’t fall behind, and potentially lead to bad decisions for other components.

If the various technology development efforts are properly aligned, “we can either deliver on time or deliver to the left,” or ahead of schedule, he explained.

One nightmare scenario, he said, is that the aircraft’s development gets ahead of engine development, and the Air Force eventually realizes it made a bad decision that would have been avoided if the engine had matured faster.

“We want to see all those things happen in a sequence where one takes advantage of the other … so we’re making maximum use of resources,” Wittman said of the annual reporting requirement.

Asked about the gap between the Navy’s and the Air Force’s progress on NGAD, Wittman said the Navy must set its requirements beyond simply seeking a carrier-based fighter.

The Air Force about five years ago realized its fifth-generation fighters were at risk from Chinese weapons within the first island chain, Wittman noted. (The first island chain runs parallel to the mainland of the Asian continent, starting in the Kuril Islands, through the Japanese Archipelago; includes Taiwan and the northwestern portion of the Philippines; and finishes in Borneo.)

The Navy, he added, at first believed it could mitigate the threat by keeping its aircraft carriers farther away and sending its fifth-generation F-35Cs in along with tankers to increase their range. But, Wittman continued, the jets and the tankers are still at risk, and so this sixth-generation NGAD program is important to the sea service.

“The Navy is behind, and I don’t want the Air Force to mark time while the Navy’s trying to catch up,” Wittman said.

“But I do think the things that the Air Force is doing will inform the Navy, and the Navy should, with that, be able to make big steps forward that they otherwise couldn’t make if they were doing this on their own. So what our expectation is, is the Navy can do a significant amount of catch-up, based upon what the Air Force is doing.”