While the 2026 budget allotted $27.2 billion for the Navy to build 17 ships, Phelan said President Donald Trump’s proposed fiscal 2027 defense budget of $1.5 trillion could bump that number up to at least 34, with a large contingent of auxiliary and support ships.

“It is an area that we are in grave need of upgrading and I think the president has correctly addressed that in the budget,” Phelan said.

The Navy secretary said that the effort would help rebuild the maritime industrial base by focusing on the construction of ships that are easier to build than combat ships, which require complicated radar systems and nuclear propulsion systems.

The 2026 budget allocated money for vessels that include two Virginia-class fast-attack submarines, one Columbia-class ballistic missile submarine, three medium landing ships and one T-AGOS ocean surveillance ship, according to the House Appropriations Committee.

The news came as Phelan answered audience questions after delivering opening remarks that criticized the Biden administration for underfunding the shipbuilding industry and praised the arrival of the Golden Fleet.

“Between FY20 and FY24, the prior administration consistently underfunded Navy shipbuilding, requesting a cumulative $127 billion while Congress recognized the shortfall and enacted nearly $142 billion — a $15 billion gap that would have represented ships not built and capabilities not delivered,” Phelan said.

The Golden Fleet, which Trump announced in December 2025, will include two so-called Trump-class battleships. The president has claimed the vessels will be the biggest and fastest battleships in the world, 100 times more powerful than any ship ever built.

The Golden Fleet is about moving faster, building smarter and delivering capabilities now, Phelan said, adding that the initiative also aims to harness unmanned and artificial intelligence systems.

The April 7 memo aligns with the March 28 Secretary of Defense memo that called for an analysis of the department in hopes of reducing duplicative jobs, automating others and weeding out bureaucracy.

“To successfully deter America’s adversaries and posture our Forces to prevail in combat, we must focus our efforts and our resources on our top priorities,” the April 7 memo states. “Optimizing the organizational structure and civilian workforce of the Department is foundational to that effort.”

Secretaries of the military departments, chairman of the Joint Chiefs of Staff, directors of the defense agencies and field activities and Hegseth’s principal staff assistants were instructed to provide a “future-state” organizational chart to the Under Secretary of Defense for Personnel and Readiness Jules W. Hurst III, pinpointing areas for consolidation.

The under secretary has until Friday to submit those proposals to Hegseth’s office.

The April 7 memo offers a simple litmus test for judging a position’s necessity.

“If this position didn’t exist today, and we were at war tomorrow, would we create it?” the memo states. “If the answer is no, it should be consolidated, restructured, or eliminated.”

The letter lists several points of emphasis, including what’s listed as “mission-first alignment” — where every civilian role that doesn’t “directly enable lethality” should be “reclassified, outsourced, or removed” — and “flattened hierarchies,” where supervision is reduced in favor of providing more decision making power to positions at every level.

The memo also calls for the reduction of jobs with duplicate responsibilities, the elimination of reviews for a speedier “process,” reallocation of money that isn’t directly tied to “warfighter outcomes,” termination of civilian roles not tethered to operational priorities and leveraging of automation and artificial intelligence.

“By cutting unnecessary layers, eliminating redundancy, and aligning every role to mission readiness, we ensure our ability to respond to any threat with speed, precision, and overwhelming force,” the memo states.

Since President Trump took office, the Defense Department civilian workforce has seen several changes that broke with the status quo.

In February, DOD civilian employees were ordered by the department to reply to an email from Elon Musk — tasked with leading the Department of Government Efficiency — that asked for a five-point summation of their weekly accomplishments.

Civilian employees were also barred from using their government-issued travel charge cards, after being given a $1 spending limit.

The new spending rules, spelled out in a March 5 memorandum signed by Under Secretary of Defense for Personnel and Readiness Darin Selnick, came a week after President Donald Trump issued a Feb. 26 executive order outlining government cost-saving initiatives, including some that targeted federal workers’ spending habits.

“DOD civilian employees must cancel all future non-exempted official travel reservations, and those currently on non-exempted travel must return to their respective permanent duty stations as soon as feasible,” the DOD memo read.

The spending limit for the government-issued travel cards of federal civilian employees was officially reduced to $1.00, per the instructions.

The memo exempts DOD civilian employee travel that directly supports military operations or a permanent change in station.

Trump’s executive order — entitled “Implementing the President’s ‘Department of Government Efficiency’ Cost Efficiency Initiative” — called for a “transformation in federal spending” by cutting costs and harnessing the power of the increasingly controversial DOGE agency to do the heavy lifting.

Two tenets of the executive order, “non-essential travel justification” and “credit card freeze,” provided more detailed instructions.

Agencies will be tasked with installing a technological system in which approvals for federally funded travel for “conferences and other non-essential purposes” are logged. Employees will not be allowed to travel unless the head of that agency submits a written justification through the system.

Federal employees’ credit cards will also be frozen for 30 days, save for credit cards tied to disaster relief or natural disaster response benefit assistance.

Elon Musk, the Trump-appointed special government employee who leads DOGE and is the CEO of automotive company Tesla, has faced criticism for the substantial firings his agency has made in the name of cost savings. Cuts have impacted a long list of federal agencies, including the U.S. Agency for International Development, the Department of Energy, the National Parks Service and the Department of Veterans Affairs, which is planning to cut 80,000 employees.

DOGE has also received backlash for emails it sent out requiring federal employees, including DOD civilians, to reply with a detailed list of their professional accomplishments for the week in an attempt to assess productivity.