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CNO: Navy Needs to Reshuffle $ 2 billion to Cover O&M and Shipbuilding Accounts

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Chief of Naval Operations (CNO) Adm. Jonathan Greenert testifies before the House Armed Services Committee on Sept. 18, 2013. US Navy Photo

Chief of Naval Operations (CNO) Adm. Jonathan Greenert testifies before the House Armed Services Committee on Sept. 18, 2013. US Navy Photo

Chief of Naval Operations Adm. Jonathan Greenert informally asked the House Armed Services Committee (HASC) for authority to shuffle $ 2 billion in Navy funds to shore up gaps in maintenance, operations and procurement the service would suffer in Fiscal Year 2014 under the current sequestration cuts, Greenert said as part of his testimony before the HASC on Wednesday.

“We need to transfer about $1 billion into the [operations and maintenance] accounts and $1 billion into our procurement account — mostly for shipbuilding — to meet our essential needs,” Greenert told the committee.
“We need to do this by January.”
Sequestration cuts 10 percent of all defense accounts — with the exception of military personnel funds — across all the services.

Where the money would come from inside the Navy’s accounts is unclear.

“I’m not at really at liberty to discuss precise sources,” Greenert told USNI News following the Wednesday hearing.

He did say the Navy was considering moving the money from “aircraft procurement accounts, operational procurement navy accounts and maybe some Research Development Test & Evaluation (RDT&E).

The $2 billion shuffle would be subject to congressional approval that might be difficult to come by if the Navy remains vague on where the money would come from.

Sources told USNI News on Wednesday that Congress might baulk at the Navy’s request to shuffle funds unless it gives the legislative body more information on where the money would come from.
Aside from the early overtures for reprogramming authority, Greenert painted a bleak picture of the shortfalls from the ongoing budget crunch.

“In the near term, sequestration in Fiscal Year 2014 (FY 2014) will negatively impact our readiness and investments, further degrading programs in all appropriations except military personnel,” Greenert said in written testimony submitted to the House Armed Services Committee on Wednesday.
“Combined with the prohibitions on transferring funds, increasing program quantities and starting new projects associated with a continuing resolution, these impacts will be considerably worse in FY 2014 than they were in FY 2013.”

Without an approved FY 14 budget — according to Greenert — the Navy would be unable to:
-Fund one Virginia-class attack submarine (SSN-774)
-Fund one Littoral Combat Ship (LCS)
-Delay start of construction of the Ohio Class Replacement (ORP) nuclear ballistic missile submarine (SSBN) from FY 2021 to FY 2022
-Delay the construction of Gerald R. Ford (CVN-78) by two years.
-Delay the complex refueling and overhaul (RCOH) of carrier USS George Washington (CVN-73)
-Fund one Afloat Forward Stating Base (AFSB)
-Fund 11 aircraft, including: Four EA-18G Growler electronic attack fighters; One F-35C Lightning II; One E-2D Advanced Hawkeye; Two P-8A Poseidon; Three MH-60 Seahawk helicopters.

Congress has until Oct. 1 to approve the defense budget for FY 2014. If Congress doesn’t act it will likely fund the Pentagon on a continuing resolution (CR), freezing funds at FY 2013 levels.
In April, the Navy asked for $155.8 billion in their annual budget request.

The navy is currently developing their request for FY 2015 with two budget proposals — a normal so-called program objective memoranda (POM) and an alternative POM (ALT POM).

The ALT POM will craft a budget proposal for a sequestered Navy and Marine Corps budget under the auspices of the Department of the Navy.

Greenert said the Navy and Marine Corps will meet in about the next two weeks to generate a unified Department of the Navy budget before submitting to the Office of the Secretary of Defense.