Transcript

announcer (00:02):

Welcome to Budget Watchdog, All Federal, the podcast dedicated to making sense of the budget, spending, and tax issues facing the nation. Cut through the partisan rhetoric and talking points for the facts about what’s being talked about, bandied about, and Kushner Washington. Brought to you by Taxpayers for Common Sense. And now the host of Budget Watchdog AF, TCS President Steve Ellis.

Steve Ellis (00:40):

Welcome to All American Taxpayers Seeking Common Sense. You’ve made it to the right place. For more than 30 years, TCS, that’s Taxpayers for Common Sense, has served as an independent nonpartisan budget watchdog group based in Washington, DC. We believe in fiscal policy for America that is based on facts. We believe in transparency and accountability because no matter where you are on the political spectrum, no one wants to see their tax dollars wasted. This week, the total federal government debt topped $40 trillion. But we’re going to talk about ships today, big ones, expensive ones, and bad decisions regarding them that add to the national debt on top of multiple executive orders on the same subject. The stated goal is to rebuild the fleet and revive an American shipbuilding industry that has, by any honest measure, been struggling for a long time. That is a real problem.

It deserves a real solution. But read the fine print. What the memorandum actually orders is a set of design changes to ships that are already under construction. It tells the Navy to take the electromagnetic catapults out of its newest aircraft carrier and put steam-powered catapults back in. And now the Washington Post reports that the Navy is quietly studying whether to move the island. That’s the multi-story command tower, the part you picture when you picture an aircraft carrier from the back of the ship towards the middle. The reason the president prefers it the way the World War II carriers looked. Here’s the number to hang on to, $22 billion. That’s the projected cost of a single Ford-class aircraft carrier, and the Navy plans to build up to 10 of them. That’s before anybody changes anything. Budget Watchdog AF faithful. There is an iron law of building complicated things, and it applies to your kitchen renovation exactly the same way it applies to a nuclear-powered warship.

The most expensive moment in any project is the moment somebody changes their mind after the work has started. Here to help us understand what these changes could cost taxpayers and what else is coming down the pike is TCS policy analyst Gabe Murphy. Gabe, welcome back to the podcast.

Gabe Murphy (02:47):

Great to be here, Steve.

Steve Ellis (02:48):

All right, Gabe, let’s start with a story that broke over the weekend. For folks who have never set foot on a carrier, what is the island and what exactly is the Navy being asked to look at?

Gabe Murphy (02:59):

So the island refers to the large multi-story command and control structure that each aircraft carrier has. It is both used to navigate the ship and serves as an air traffic control tower for launch and recovery of aircraft. On modern carriers, it’s positioned towards the back or the stern of the ship. The president prefers the aesthetic of older aircraft carriers like those used during World War II, which positioned the island in the middle of the ship. From what I can tell, Steve, that is the only motivation here.

Steve Ellis (03:32):

This isn’t the first time somebody’s asked this question, is it? My understanding is the Navy ran these numbers once before.

Gabe Murphy (03:39):

That’s right. Yeah, the Navy took a look at this during the president’s first term and unsurprisingly found that it would cost billions of dollars and lead to major delays.

Steve Ellis (03:48):

So let’s back up. Why is the island towards the stern of the ship in the first place? Why did they move it from what it had been in the past? I have to assume the Navy didn’t just put it there by accident.

Gabe Murphy (03:59):

Yeah, I mean the position of the island shifted for very practical reasons. It’s historically on the starboard side to keep it out of the way and help keep these massive ships stable. Positioning it towards the stern as well helped make landing easier and safer by reducing turbulence on the deck. The position also allows more space for aircraft to line up near their launchers, which increases the number of sororities that these ships can fly in a conflict. And by keeping it aft, launch and recovery of aircraft can happen at the same time. But the president doesn’t like the look of it, so here we are. It’s kind of the reflecting pool all over again, but with much more serious fiscal and national security implications.

Steve Ellis (04:44):

So Gabe, has anybody attached a dollar figure to this? Even to the study, let alone the actual change itself?

Gabe Murphy (04:50):

I haven’t seen any specific cost estimates for implementing this proposed redesign or for the study, but like you said, forward class carriers are currently projected to cost about $22 billion a pop. We currently have one of these carriers deployed and three more under construction. So it’s easy to imagine these redesigns costing billions of additional dollars and delays for those ships currently under construction with some additional costs for future ships as well. And in exchange for these cost spikes and delays, we’d end up with a less capable, more vulnerable ship.

Steve Ellis (05:25):

Okay, let’s turn to the memorandum that I mentioned at the top because the island got the headlines, but the memo is the one with the signature on it. What does it actually direct the Navy to do?

Gabe Murphy (05:36):

So it directs the Navy to give the president a plan, including a timeline and a cost estimate for replacing electromagnetic aircraft launch systems or e-mails. The system that the Navy is currently using to launch jets off of the flight deck. And it would replace them with old school steam-powered launch systems or catapults. It also directs the same kind of plan for replacing advanced weapons elevators with hydraulic systems. While the memorandum directs a plan specifically for the USS Doris Miller, one of the three aircraft carriers currently under construction. The section on this in the memorandum is called Restoring Steam and Hydraulic Systems to Carriers, plural. So clearly there’s a vision for this beyond the miller. Now, the memorandum does a few other things as well, some of which may actually make sense, like allowing some foreign shipyard construction of US ships. But ironically, it also aims to reform Naval Sea Systems command by, among other measures, preventing NAVSEA from imposing redesigns or iterative design changes upon original mature parent designs.

Now that’s the right idea if only it were also applied to the president who in this same memorandum is attempting to advance such redesigns.

Steve Ellis (06:49):

Now Gabe, that memo says the administration wants, and I’m quoting here, “Proven, reliable, and affordable technologies and ship designs.” Fair enough. Is going back to steam actually cheaper?

Gabe Murphy (07:03):

No, Steve. I mean, first of all, the Navy would have to convince a manufacturer to build these steam systems once again, and it’s been almost three decades since one was built. Convincing them would probably take government funding to incentivize this and to assure the contractor that they won’t just abandon the plan in a couple of years when a new administration takes the reins and restores some common sense. Getting those production lines up and running again will also add to the delays. But I think the more costly problem here is probably the redesign work that would need to happen, including for ships already under construction. Word is that could cost billions of additional dollars. Then there’s the capabilities to consider. We move to electromagnetic systems because in addition to being more cost-effective, they’re more reliable, generate higher speeds, and provide controllable constant force along the track, which is important for launching different aircraft from FA-18 superhornets to lighterweight drones.

Furthermore, the electromagnetic system relies on the carrier’s existing power grid. Adding steam power back onto these ships would add to the ship’s personnel requirements, which brings us back to cost again. Because the electromagnetic systems are easier to maintain and require fewer personnel, operating costs for forward-class carriers are actually about $100 million less per year than their predecessors.

Steve Ellis (08:24):

And Gabe, you know who has tested and proven electromagnetic launch? China nearly a year ago on their newest carrier. But I digress. Help the bunch of watchdog AF Faithful understand why this isn’t just swapping out one part for another.

Gabe Murphy (08:39):

I mean, think about your car, right? You can’t just take the battery out of your electric Chevy or whatever and replace it with a steam-powered engine. You would need to redesign the space to fit the parts, replace the parts that are no longer relevant, figure out new exhaust systems, and so on. Honestly, I don’t know if you can tell. I don’t know too much about cars, but I know that it would be complicated and expensive and that your horsepower would probably take a hit. Now, imagine trying to do all that on a vehicle that’s 1100 feet long and displaces about 100,000 tons of water.

Steve Ellis (09:11):

And Gabe, what is a change like this due to the schedule? These carriers are already running behind, aren’t they?

Gabe Murphy (09:16):

Well, for the USS Doris Miller, for instance, one of the ships currently under construction, the redesign would likely push the ship’s delivery date back multiple years to the late 2030s. It’s currently projected to be delivered in 2034, which is already two years behind schedule. So yeah, this will just add to the problems already facing US shipbuilding.

Steve Ellis (09:38):

And what about the electromagnetic system itself? Is it working or isn’t it? Because I had heard it both ways.

Gabe Murphy (09:45):

Well, according to the Navy, and I’ll quote here, “Preliminary reports from the sorty generation rate test program show that the flight deck design in conjunction with the EMLs, these electromagnetic aircraft launch systems, and the advanced arresting gear, have contributed to increased sorty generation rate compared to that of the NIMS class carrier. So in other words, these aircraft carriers can fly more sorties because of these systems. So the Navy seems to like it. To be sure, like almost every piece of US military equipment, there have been some cost overruns, some reliability issues with these emails. But that was true of the steam-powered systems too. And I think given the savings in long-term operational cost, the emails are likely more cost-effective even if you exclude the immense costs of redesigning ships that are already under construction.

Steve Ellis (10:34):

Newport News in Virginia is the only shipyard in the country that can build these ships. What does work like this mean for everything else that is waiting in the queue?

Gabe Murphy (10:43):

Well, the presidential memorandum does include a section directing the Navy to make a plan for establishing a fifth public Navy yard, which could eventually help with this, but that would take many years. So yes, in short, the redesigns the president wants would have ripple effects across the shipbuilding industry, further delaying deliveries and increasing costs across the board, and particularly at Newport News where they’re also building Virginia class tax subs and modules of the Columbia class ballistic missile submarines. Delays in the Columbia class would be particularly concerning as they are the replacement sub for the sea-based leg of the nuclear triad, which is rightly considered the most reliable and invulnerable leg of the triad. So this move would raise some serious readiness concerns in terms of maintaining the right number of ships of each type across Navy programs, as well as some specific concerns around nuclear deterrents.

Steve Ellis (11:36):

Okay, Gabe, let’s be fair to the document. Is there anything in this memorandum a budget watchdog should actually like?

Gabe Murphy (11:43):

Yes. The restrictions on design changes, at least to those they apply to, may help reduce the number of expensive redesigns, if not the specific redesigns envisioned by the president. There’s also a section of the memorandum we mentioned earlier that would allow some foreign shipyards to play a role in building some ships, and that comes with some stipulations. For instance, the foreign supplier would need to simultaneously build a new shipyard in the United States and would have to build all but the first two ships of a class in US shipyards. They would also have to hire and train American citizens for their workforce, licensed shipbuilding techniques, and rely on US supply chains. This seems to me like a common sense effort to expand our shipbuilding capacity by partnering with allies in a way that still bolsters domestic shipbuilding capacity in the long run. It builds on a program where the Coast Guard is working with shipyards in Finland to build the next generation of icebreakers.

Relying on proven designs that have been cost-effectively constructed in foreign shipyards to jumpstart domestic shipbuilding makes a lot of sense. The fifth naval shipyard that the memorandum wants a plan for could also be a positive in terms of expanding long-term domestic shipbuilding capacity. Although that depends to some extent, I think, on the cost relative to more reliance on foreign shipyards.

Steve Ellis (13:01):

Speaking of costs, let’s turn to another ship that’s making some waves in the headlines. The Congressional Budget Office, Congress’s nonpartisan budget scorekeeper has now scored the Trump class battleship. What did they come back with? And how does that compare to what the Navy was telling us about costs?

Gabe Murphy (13:19):

Right. So this month, the CBO, that’s the Congressional Budget Office, estimated the cost of the Trump-class battleship program at $275 billion in 2026 dollars. That’s over a 30-year period from next year through 2056. The first ship would come in at $23 billion, while the 15 ships in the program would average $18 billion a piece. That’s more than a 31% increase over the Navy’s projection earlier this year, which put the cost of the lead ship at about 17.5 billion.

Steve Ellis (13:53):

Okay, so Gabe, put this into perspective for the Budget Watchdog AF Faithful. What else in the fleet costs that kind of money?

Gabe Murphy (14:01):

Well, this is slightly less than the cost of the forward-class aircraft carrier that we mentioned, which are projected to cost about $22 billion each. But we’d be building more of these. So the Trump class program would likely end up costing more overall, particularly when you take into account further cost overruns that we can certainly expect with a program like this.

Steve Ellis (14:20):

CBO also raised a question beyond the price tag, whether our yards could physically build these things at all. Walk us through that, Gabe.

Gabe Murphy (14:29):

Well, despite Bath Ironworks in Maine and Engle Shipbuilding in Mississippi having the most experience with building large surface combatants, those are not nuclear. They’re conventionally powered. Those shipyards aren’t certified to build nuclear-powered ships. So the final assembly would take place at Newport News Shipbuilding. Now, if that sounds familiar, it’s because that’s where they’re also building the Ford-class carrier as well as some of the subs. As CBO put it, “Newport News Shipbuilding is behind schedule on constructing three aircraft carriers as well as many submarines. Adding the final assembly of a nuclear-powered battleship to the shipyard’s workload could lengthen the delays for those programs in addition to delaying the construction of the battleship itself.” At the end of the day, they can build this if they want to, but not without increasing costs and delaying shipbuilding across Navy programs.

Steve Ellis (15:23):

And there are major strategic questions about the ship as well. We’re not just talking about cost and construction capacity.

Gabe Murphy (15:29):

That’s right, Steve. I mean, the Trump class is antithetical to everything the Navy says it wants, which is namely a more agile and distributed naval force. While it would be loaded with everything from electromagnetic rail guns to lasers to nuclear missiles, its utility in a war would be severely limited by its exquisite design. It would function like a giant bullseye in the event of a peer or even a near-peer conflict, meaning that it would either sit in court outside of the line of fire and be basically useless, or it would be heavily targeted early on in a conflict. I mean, talk about sunk costs. This is all part of why we recommended Congress cut the Trump-class battleship entirely from the budget when we released a cut list for the Pentagon last month.

Steve Ellis (16:14):

Yeah, it really flies in the face of what we are learning about the nature of war from both in Ukraine and Iran, where they’re using cheap, quickly constructed drones to combat these exquisite arms that either Russia or the United States has. So bottom line for the Budget Washtag At Faithful Gabe, what’s the taxpayer’s exposure here?

Gabe Murphy (16:38):

In the long run, across these various programs, we’re looking at hundreds of billions of dollars in potential costs, all to pay for redesigns or entire ships that we simply don’t need. To be clear, the Navy needs ships and we need shipyards to build them. And we need to have tough conversations about the appropriate designs as well as the broader strategies informing those designs. But by and large, the direction this administration is taking us on shipbuilding is going to lead to higher costs, more delays, reduced readiness, and ultimately a less effective fighting force.

Steve Ellis (17:11):

All right, Gabe, let’s get you out of here on this. What’s the one question you’d want Congress to ask before a dollar of this is appropriated and goes to construction?

Gabe Murphy (17:21):

I’d like them to ask whether these shipbuilding plans are really the best way to keep Americans safe, or if there are other better uses for these funds, whether within other national security programs, within domestic programs that provide alternative forms of security for taxpayers, or simply through spending less to mitigate the nation’s deepening debt crisis. I think any honest assessment would say, yes, we can do better.

Steve Ellis (17:46):

Gabe, thanks for being here. Thanks for walking us through this one.

Gabe Murphy (17:49):

Of Course, Steve, thanks for having me on.

Steve Ellis (17:51):

Well, there you have it, Budget Watchdog AF faithful. America does have a shipbuilding problem. Our yards are stretched thin, our ships come late, and they come in over budget. That is real and worth fixing, but you don’t fix a schedule problem by redrawing the blueprints on ships that are already on the way, and you don’t fix a cost problem by ordering up a new class of battleships the Navy doesn’t even want. Prove it, reliable, and affordable. That’s what the memorandum says. We would just like to see the receipts, especially as the national debt tops $40 trillion. This is the frequency. Mark it on your dial, subscribe and share, and know this, Taxpayers for Common Sense has your back, America. We read the bills, we monitor the year marks, and we highlight the wasteful programs that poorly spend your money and ship long-term risk onto taxpayers.

(18:38):

We’ll be back with a new episode soon. I hope you’ll meet us right here to learn more.