**REMARKS AS PREPARED FOR DELIVERY**
U.S. Senator Susan Collins
Member, Senate Armed Services Committee
Member, Senate Defense Appropriations Subcommittee
Ranking Member, Senate Homeland Security Committee
Remarks to the Surface Navy Association Annual Symposium
January 11, 2012
Last year, for the 50th year in a row, Congress passed a National Defense Authorization Act (NDAA). For the surface warfare community, the NDAA and appropriations bills were extremely good news.
Shipbuilding programs were funded to 99 percent of the President's budget request, and we continued to reverse the trend of the 2000s when shipbuilding averaged a meager 6 new starts per year. These funding levels demonstrate Congress's strong commitment to the industrial base and a combat capable surface navy. Based upon the Navy's five-year projections from last year, we should average 11 new ship construction starts for the next four years.
Unfortunately, the overwhelmingly bipartisan passage of this year's defense authorization bill came against the backdrop of a toxic partisan environment that has continued to get worse.
This is not just my opinion: a RAND corporation study demonstrates that the amount of overlap between the most conservative Democrat and the most liberal Republican in the House has been decreasing since the 1960s. In the 110th Congress, the overlap in the House effectively disappeared, making it extremely difficult for centrist legislating to be successful.
The ramifications of this culture were epitomized in the "Supercommittee's" failure to propose reforms that would place our fiscal trajectory on a sustainable course despite the urgent need to do so.
I almost voted against the bill that established the Supercommittee because of the disproportionate cuts to defense that would occur under sequestration if the Supercommittee failed. Ultimately, I voted in favor of the measure because my leadership assured me that sequestration would never happen. So much for that prediction.
As a person committed to seeking pragmatic solutions through compromise, it seemed to me that if ever there were a moment when Members of Congress would put aside their partisan politics for the greater good of the Nation, this would have been the time.
Unfortunately, we now face automatic spending cuts that are slated to begin next year that would undoubtedly result in serious consequences for our national security. Sequestration remains the giant sword of Damocles hanging over our collective head.
So let me make three observations about the consequences of the budget situation we are in and what it means for defense.
First, defense has already taken a huge reduction in future spending.
Compared to the Fiscal Year 2011 President's budget request, future defense spending has already been reduced by $850 billion. Few state delegations were exempt from the reductions initiated by Secretary Gates that he made in 2009 and that were expanded upon during his efficiency reviews, and Maine was no exception.
So when Senator McCain, Senator Levin, Senator Kyl, and several of my other colleagues and I say that we do not think defense should be cut, we are really saying that DOD should not face any additional cuts.
Second, the biggest driver of our long-term debt and deficits is not defense spending, it is the spending on entitlement and health care programs which continues to balloon on autopilot.
Fifty years ago, mandatory programs accounted for $2.50 out of every $10 spent by the federal government. Today, these programs account for almost $6 out of every $10 dollars spent by the government. In those same 50 years, the share for defense spending has gone from $5 out of every $10 to about $2 out of every $10 spent this year by the federal government.
In other words, as a percentage of the budget, defense has fallen by a factor of two and a half while entitlements have more than doubled in size.
The third observation I would make is that our national debt is a security concern in its own right. Let me explain why. Last year, the federal government spent $266 billion in interest payments. This means we are spending more on interest on the national debt each month than we spend in a single year on Naval shipbuilding. The implications of such spending habits are evident, and this is the budget crisis we face as a country.
This fiscal crisis makes it all the more imperative that the Pentagon aggressively eliminate excessive bureaucracy that does not contribute to deterring our adversaries or producing combat capability.
There are three ways the Department can demonstrate its commitment to help solve this national problem. First, the Department must make their financial statements audit-ready. DoD is now the only Department in the Federal government that does not have auditable financial statements. That has to change.
If the Pentagon cannot account for its spending, neither the Congress nor the taxpayers will be convinced its funding is being spent wisely.
Second, the DOD must continue to seek to prevent and reverse rank and grade inflation. The Department has made some progress in this area, and the Senate Armed Service Personnel Committee has held hearings about this topic as well.
Third, the relative increase in the size and scope of the Office of the Secretary of Defense and headquarters staffs continues to exceed the relative increase in combat capable forces since 2001, even after the efficiency initiatives process.
As our nation faces these challenges, you can imagine that I paid particular attention to the statements from the Administration during the Strategic Review release last week. I welcomed certain parts of the review, specifically the renewed focus on Asia-Pacific and the Middle East.
But it is difficult to completely assess the President's new defense strategy without knowing what he intends to propose for specific programmatic cuts and for the end strength and allocation of our forces. I will be looking to see how the new strategy is translated into resource decisions when the Administration's budget request is rolled out next month.
The new strategy, when combined with comments made during the course of the last year, does, I think, offer three distinct commitments made by senior administration officials that affect surface warfare. They are:
· A commitment to shipbuilding and the shipbuilding industrial base;
· A commitment to maintaining a high-end combat capability; and
- A commitment to focus on the Asia-Pacific region as the area of highest strategic priority.
In articulating these three commitments, the administration has rightly identified three of the top priorities for our national security in the 21st Century.
As I continue to scrutinize the Strategic Review and when I examine the President's budget request when it is released in February, I will be looking for evidence that the Administration is honoring its promises with the resources necessary to fulfill these commitments.
The last two commitments are among the greatest justifications for maintaining a strong and capable surface fleet, but this fleet can only materialize and be sustained by making good on the first commitment to shipbuilding and the fragile industrial base that supports it.
Our fleet begins in our nation's public and private shipyards. I have always been a leading advocate for our shipyards, not only because of the great contribution Bath Iron Works makes to my home state of Maine, but also because a strong industrial shipbuilding base is a vital national asset. When Secretary Panetta visited Electric Boat in Groton late last year, he described that it was the nation's shipyards and factories that enabled the U.S. to ramp up armament production at the outbreak of World War II. He went on to say that the country should never lose this capability, and I could not agree with him more.
If we lose the skills at our shipyards or they begin to atrophy, there is no guarantee that we can reestablish them quickly enough when they are needed the most. I question whether building an average of only 1.5 destroyers per year is adequate to preserve the skills and the number of production workers needed for a secure and cost efficient industrial base. I would also note that this procurement rate alone is insufficient to preserve competition between the two yards - competition which has worked to keep shipbuilding affordable for American taxpayers.
Senior uniformed and civilian Navy leaders, including Secretary Stackley at RD&A, have worked hard to increase the number of ships being built each year toward the goal of a 313-ship Navy. As many of you know, the numbers of ships required within each ship class has shifted since the original 313-ship battle fleet was unveiled several years ago, while the 313 number has remained constant. On the one hand, the revised objective of 94 large surface combatants recognizes a growing need for ships capable of performing multiple missions.
Unfortunately, it is unclear if the elimination of the next-generation cruiser from the plan in the FY11 budget and increases in the inventory goals of smaller classes of ships with little or no combat capability since 2006 is informed by a similar logic. Obviously, both the quantity and quality of our Fleet are important, and as many senior uniformed and civilian leaders have said, at some point "quantity has a quality all its own." Nevertheless, we must not allow a fixation on absolute numbers of ships to overshadow a critical metric: the number of combat-capable ships in each warfighting area that possess the capabilities necessary to fulfill high-end combat missions.
The new Chairman of the Joint Chiefs of Staff, General Martin Dempsey, made it clear in November that we cannot just hope for the best when considering near-peer competitors. He said that we've got to sustain our high-end conventional capability. Those words were echoed last week when Secretary Panetta said that we have to "improv[e] [the] capabilities that maintain our military's technological edge and freedom of action."
Building a large number of ships with limited combat capability at the expense of increasing the number of ships with higher capability is a Pyrrhic victory.
Yet, the Navy's latest shipbuilding plan makes it clear that it will meet the minimum required number of surface combatants in only seven of the thirty years covered by the plan. At its worst, the cruiser-destroyer force will be fully 25 percent below the required number - making this shortfall the largest and longest shortfall of any class of ships. If the Administration is committed to maintaining high-end combat capability, this shortfall must be significantly mitigated or eliminated in the Administration's future plans. The Senate Appropriations Defense Subcommittee made this very point when it directed the Navy to submit its plan for closing this gap in conjunction with this year's upcoming budget proposal.
The longer Congress has to wait for a plan to address the gap, the more questions will be asked about the validity of the 94-ship requirement. To put it plainly: if 94-ships is the minimum, how many ships do we have to be short of that goal before someone in the Navy or the Pentagon sounds the alarm that the risk for our country's security has reached a red-line?
Maintenance of high end naval combat capabilities like ballistic missile defense, open-ocean anti-submarine warfare, and strike warfare make perfect sense when framed in the context of the third commitment, one explicitly stated last week: refocusing on Asia-Pacific as the region of highest strategic priority.
The succession in North Korea, the insurgency in the Philippines, the struggle for resources and sovereignty in the South China Sea, and of course Taiwan, serve as just a few examples of potential flashpoints.
Secretary Panetta has said that "we must contend with rising powers, and rapidly modernizing militaries, particularly in the Asia-Pacific region-where the security and economic future of our nation will largely rest in the 21st century.
The rise of China will continue to shape the international system, and we will have to stay competitive…. That means continuing to project our power and maintaining forward-deployed forces in the Asia-Pacific region."
The Administration's decision to station several small ships in Singapore and to forward deploy Marines in Australia are important first steps to shift the focus to the Pacific. Nonetheless, as President Obama said in his speech before the Australian parliament, the United States is "all in" in Asia.
This strategy must have a strong maritime component, with combat capable ships on station throughout the region.
Any conversation about the Pacific would not be complete without a candid assessment of China. I want to be clear that I will not be making the case for an arms race with China or stating a belief that conflict with China is inevitable. Our relationship with China is much too complex to reduce the relationship so simplistically. But it would be irresponsible not to confront the fact that the Peoples Liberation Army Navy (PLA(N)) continues to grow its fleet's capability by building better and more modern classes of ships, even as the size of its modernizing army decreases.
The Office of Naval Intelligence assesses that China will have 75 submarines and 70 frigates and destroyers by 2020. By comparison, the United States will have 67 submarines and 127 cruisers, destroyers, and littoral combat ships - but these will be spread around the globe, not concentrated in the region. Of even greater concern, the figures for 2020 reflect nearly the peak size of our fleet.
In addition, China by 2020 will likely have solidified asymmetric capabilities upon which China's entire anti-access and area-denial strategy depends.
These capabilities include the sizzler sea-skimming missile, a robust cyberspace capability, and the likely successful deployment of the DF-21 anti-ship ballistic missile, which open sources indicate has a range of about 800 nautical miles.
Given these facts, it is clear to me that the future of the surface fleet is critical to our national security strategy. I will reiterate that I am looking forward to reviewing how these three commitments to shipbuilding, high-end combat capability, and a renewed focus in Asia are translated into the fiscal year 2013 budget.
The fact is that the people this community must persuade are not so much in the halls of Congress as much as they are in the E-ring of the Pentagon and in the offices of OMB. The paradigm of the last decade, which has seen the Navy's share of the total defense budget decline, is no longer valid.
For my part, I will continue to argue for and hold the Department to account for maintenance of a strong surface fleet. I will continue to support efforts to create efficiencies or cancel or modify challenged programs, especially those that do not contribute directly to combat capability.
In the end, it all comes back to the budget, and the choices it forces us to make - both within the Department of Defense and within Congress. We have a difficult year ahead of us, but it is a worthwhile effort, because we are fighting for the continued strength of the Surface Fleet, and for the strength of our country.
Thank you again for your service - I am moved by your patriotism and honored by all that you do to make America safe. Happy New Year and God bless.
Susan Collins has been a friend to Military and Veterans and her latest remarks seem to reflect nothing has changed. Thank You Senator!
Sean P Eagan
Former Chairman American Cold War Veterans