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Around The Fleet

Rough Seas Ahead

How the Continuing Resolution and Sequestration Impact the Navy

Navy Feature Photo

Navy Feature Photo

The Navy is looking down the barrel of some serious budget shortfalls that are going to affect every Sailor in one way or another. To deal with the issue, the Navy has a plan in motion to make the money last through the end of the fiscal year.

The Navy's cost-cutting plan has some pretty tough measures. The most visible measure is the decision to indefinitely delay the deployment of the Harry S. Truman Carrier Strike Group. The Truman strike group was supposed to deploy Feb. 8. This delay affects the Navy's forward presence, but most of the current, cost-cutting plan is designed not to impact forward-operating forces. Most of the cuts are focused on stateside units, but the cuts won't hit individual Sailors in their wallets.
Also, the Navy announced Feb. 8 the aircraft carrier USS Abraham Lincoln (CVN 72) refueling complex overhaul (RCOH) will not start due to a lack of funding.

Number one, it won't affect your pay. Number two, it won't affect your retirement. Number three, it won't affect your medical coverage ..." said Chief of Naval Operations Adm. Jonathan Greenert during an all hands call in January. He also said family programs won't be affected.

So What?


If the plan doesn't affect your pay or benefits, what does it affect, and why should "Joe Sailor" care? One of the obvious effects is uncertain deployment schedules.
"As we work through the fiscal challenges, there are going to be some decisions that are going to have to be made to ensure that we have the ready forces available," said Master Chief Petty Officer of the Navy (MCPON) Mike Stevens. "So, there may be some uncertainty at times as to what is deploying and when it's deploying as we work through these challenges. We'll do our best to mitigate that ..."

The toughest cuts in this phase of the plan are the cuts in ship ops, flying hours, and maintenance. The Navy is saving $670 million by making cuts in steaming and flying hours. The plan also cancels all surface ship maintenance periods and aircraft depot maintenance periods for the last six months of the fiscal year.
The belt-tightening includes cuts to training, travel, purchasing, and base upkeep. Any non-mission essential travel is cut; training events that aren't related to deploying are cut; purchases for things like furniture and computer servers are cut; and base commanders have to cut budgets for things like repairing runways and upgrading buildings on base. Most of the choices about what items are getting cut will be happening at the local level, so, Sailors should stay tuned in with their local chains of command to see what cuts will affect them.

There is a ripple effect here," said Rear Adm. John Kirby, Navy chief of information. "If you start to cancel shipyard periods - and we are already beginning to do that - and you're going to cancel depot maintenance on aircraft, it will eat into our readiness in future months and future years."

Why Is There a Shortfall?


The budget shortfall is being caused by something called a "continuing resolution." So, what's that? Every year, congress passes a bill that funds the military for the fiscal year (FY). When lawmakers are busy, or they can't come to an agreement on military funding, they basically tell the military, "Keep using last year's budget plan for a month or two until we hammer out this year's budget plan." The extension of last year's budget into this fiscal year is called a continuing resolution, or "CR." The problem with the continuing resolution is that the Navy was expecting to get more money in 2013 for its operating and maintenance fund, and now it looks like we may have to keep using the 2012 budget for the rest of the year. So, we have been writing 2013 checks; but, we only have a 2012 bank account.
The fiscal year starts Oct. 1. We are almost halfway through this fiscal year, and there is a fear that lawmakers may decide to extend the continuing resolution through the end of FY-13. Navy leaders hope this doesn't happen, but they are planning for the worst. If the CR is extended through the end of the fiscal year, the Navy is looking at a $4.6 billion shortfall in the operations and maintenance fund.
"Given the great uncertainty we face, we must enact prudent, but stringent, belt-tightening measures now that will permit us to operate the Navy and Marine Corps through the rest of this fiscal year if the CR is extended," said Secretary of the Navy Ray Mabus in a message released in January.

Sequestration


The CR is forcing us to tighten our belts to make it through the year, but things will get even tighter if we are hit by "sequestration." Sequestration has been all over the news lately, and it is a separate problem from the CR. Sequestration is a 9-percent, across-the-board, budget cut that will affect all federal agencies, and it goes into effect March 1 if lawmakers don't come up with a plan to cut the federal deficit.
If sequestration goes into effect, it will cost the Navy another $4 billion on top of the $4.6 billion shortfall the yearlong CR would cost. Navy leaders have a plan for this worst case scenario, but it isn't pretty. If we go into sequestration, most stateside ships, squadrons and units will stop training, flying and steaming. Naval operations in and around South America will stop. There will be fewer ships and aircraft deploying worldwide and the Navy will have to cancel all 6th Fleet deployments except for Ballistic Missile Defense deployments.

What's a Sailor to Do?


Most of the decisions on the current CR cost-saving measures are going to be made at the local level, so Sailors can talk to their chains of command to see where they'll be affected.
MCPON said he wants Sailors to know that the Navy's leadership is working hard to keep the ship on course through this rough patch, and he said individual Sailors can help by focusing on the things they can control. That means getting the day-to-day mission accomplished safely and correctly.
"These might be challenges today, but they are also opportunities for us to learn about ourselves, [and] to learn about each other," said Stevens. "I'm confident that in the end, that although we are dealing with these challenges today, that we will be, as a result of this, a stronger and better force tomorrow. Be upbeat; be confident; we're going to be OK. I believe that with all my heart and all my soul."

Effects of the Continuing Resolution and Sequestration on the Navy


Tier A - Continuing Resolution ($4.6B Operation and Maintenance + $ 1.7B "New Starts")
Cancel 10 ship availabilities in San Diego ($219M)
Cancel 10 ship availabilities in Norfolk ($271M)
Cancel 1 ship availability in New London ($45M)
Cancel 1 ship availability in Washington ($65M)
Cancel 1 ship availability in Mayport ($4M)
Cancel 3rd and 4th Quarter aircraft maintenance in San Diego, Norfolk, Jacksonville, Whidbey Island, Lemoore, & Cherry Point ($433M)
Cut 1,121 temporary workers mostly in shipyards and base operating support ($30M)
Reduce Facilities, Sustainment, Restoration and Modernization by 50 percent ($1.142B)
Cut Base Operating Support by 10 percent ($363M)
Cut non-essential travel/conferences ($26M)
Cut Navy Expeditionary Combat Command by 20 percent ($182M)
Reduce ship operations, flying hours ($670M)
Cancel 30 building demolition projects ($62M)
Delay decommissioning and/or disposal preparation ($33M)
Implement civilian hiring freeze ($70M)

"New Start" Prohibitions
Defer "new start" Military Construction Division projects ($675M)
Defer "new start" construction of CVN 79 ($608M)
Defer "new start" aircraft procurements ($150M)
Defer "new start" research and development ($263M)
Cancel construction of 1 DDG-51 ($1.4B) - quantity limit

Tier B - Sequestration ($4.0B)
Cancel several SSN deployments
Flying hours on deployed carriers in Middle East reduced 55 percent; steaming days reduced 22 percent
Reduce Western Pacific deployed operations by 35 percent; Non-deployed Pacific ships lose 40 percent of steaming days
Cancel naval operations in and around South America; cancel all non-Ballistic Missile Defense deployments to Europe
Reduce Middle East, Atlantic, Mediterranean Ballistic Missile Defense patrols
Shut down all flying for four of nine Carrier Air Wings in March 2013. 9-12 months to restore normal readiness at 2-3 times the cost
Stop non-deployed operations that do not support pre-deployment training
Reduce non-deployed operations for pre-deployment training
Cut all exercises (e.g., MALABAR, CARAT, FOAL Eagle)
Reduce port visits
Furlough most civilians for 22 work days ($448M)
Defer emergent repairs (USS Miami - $294M in Maine, USS Porter - $125M, USS Montpelier - $41M East Coast) ($505M Total)
Cancel Blue Angels shows in 3rd and 4th quarters ($20M)
Cancel Community Outreach Programs (e.g. Fleet Week)

IMPACTS
By October 2013, only one Carrier Strike Group / one Amphibious Ready Group (Japan-based) crisis-ready
By October 2013, CONUS forces will require nine+ months to deploy due to maintenance and training curtailments
Middle East deployed Carrier Strike Group reduced to one.