After‐​Action Report on Cato’s Panel on the Future of the Navy Surface Fleet

Yesterday’s event on the U.S. Navy was a big success and generated a vigorous discussion. Ben Freeman from POGO spelled out his concerns about the littoral combat ship, specifically the Freedom (LCS-1) (documented here and here) and CBO’s Eric Labs raised a few additional ones pertaining to the program as whole. Under Secretary of the Navy Robert Work delivered an impassioned defense of the LCS within the context of the entire fleet design, drawing on examples from history to demonstrate how the Navy learns and adapts. Consistent with past practice, Work is confident that the fleet will put the LCS through the paces—two completely different ships—and figure out how to use them.

It was refreshing to engage in a serious discussion among people who are committed to a Navy that is second-to-none, and who care enough to raise questions designed to make it stronger. I focused my remarks on the LCS’s operating characteristics, but especially on the decision to buy two different LCS types. The original plan was for the Navy to select just one. The advantage of having two ships, Work stressed, was that the Navy would learn about each vessel’s unique capabilities. The disadvantage, as I see it, is the loss of economies of scale, including in parts, logistics and training.

I do think it is important to move past the specific technical problems identified in both LCS-1 and LCS-2. These are the first ships in the class, and such ships always have their share of problems (I was assigned to a first-in-class ship, USS Ticonderoga, from March 1990 to May 1993, and we were working through some problems nine years after the ship was launched). The blogger Galrahn (aka Raymond Pritchett) at Information Dissemination last week tweeted that the information in the POGO and Aviation Week reports was all old news, but that hadn’t stopped members of Congress from calling for another investigation. Under Secretary Work stressed that he believes the problems have been addressed, or will be, and he is committed to making this program successful.

But this discussion about fixing problems and learning as we go along reminds me of a conversation that I had a few months ago with a person who believes we should increase military spending. This individual is advising Gov. Romney, who has pledged to boost Pentagon spending quite substantially—perhaps as much as an extra $2.5 trillion over the next ten years, by my estimates—if he is elected president.

While talking, I raised the subject of the LCS, not the first time that the subject has come up between us. He was nonplussed and claimed that the problems with the ship could easily be fixed. More specifically, he said “It is nothing that money can’t fix.” That is pretty much a direct quote.

Nothing that money can’t fix.

There are two problems with that statement. First, Mitt Romney might not become the 45thpresident of the United States in January 2013—the polls say that it is basically a 50-50 proposition that he won’t—and I think it highly unlikely that the Navy’s shipbuilding budget will grow substantially if he isn’t elected.

Second, I seriously doubt that the Navy’s shipbuilding budget will grow very much even if Mitt Romney is elected president, and it certainly won’t grow enough to obviate any discussion of trade offs between different ships. Even if the Navy is handed billions or tens of billions of dollars more for shipbuilding, it is still the case that every ship that we build, or every new one proposed, is competing against one another. There are always opportunity costs, even when the topline budget grows. Navy warships compete against aircraft carriers. Navy surface ships compete with submarines. And the Navy competes with the Air Force. And the Air Force and Navy compete with the Army, etc.

For now, the Navy has chosen the LCS over possible alternatives. But there are alternatives. Eric Labs authored a good study a few years ago looking at the Coast Guard’s national security cutters (.pdf), but stated yesterday that the NSCs would be more costly than the LCSs. In the paper, “Budgetary Savings from Military Restraint,” Ben Friedman and I suggested retaining the Perry-class frigates for a few more years while we develop a different ship, perhaps a new class of frigates or corvettes that could do many of the same missions that the LCS is expected to perform, and, we believe, at less cost. At yesterday’s forum, Under Secretary Work stated that we could not purchase a new frigate for less than $750 million. While I respect the Under’s expertise, I plan to spend some time over the coming months scrutinizing that claim.