Department of Defense Briefing by Rear Adm. Lescher on the Fiscal Year 2016 Navy Budget in the Pentagon Briefing Room

REAR ADM. WILLIAM LESCHER: Well, good afternoon and thanks for joining us today.

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This afternoon, I am going to present an overview of the Department of the Navy's FY '16 budget request. This is a request that reflects the secretary of the Navy's, the chief of naval operations, and the commandant of the Marine Corps' implementation of the strategic guidance shown up on the slide, spanning from the left, the national security, defense and military strategies, through the defense strategic guidance of 2012, and the 2014 QDR.

This is the guidance that outlines the missions the nation's armed forces are expected to execute, as shown. The strategy directs the Navy and Marine Corps to execute 10 missions, ranging from providing an effective nuclear deterrent and fighting terrorism in order to protect the homeland, to providing a stabilizing presence across the globe in order to build security globally, to projecting power and winning decisively when called upon.

So the budget request that we're going to talk about today provides the investment to execute these missions. And this strategic guidance provided the foundation for the hard choices, the focused investments, and the innovation reform that we'll be chatting about.

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This slide shows how that strategy is being executed today, which is the result of the resources provided and the hard choices made in prior year budget requests to create today's Navy and Marine Corps. Around the world today, very briefly, in forward-postured, sea-based forces tailored to meet the combatant commanders' requirements to execute the strategy, we have 35,000 sailors and over 6,000 Marines deployed on 99 ships, including two carrier strike groups and three amphibious readiness groups, with the associated Marine expeditionary units.

There are an additional 30,000 sailors and 27,000 Marines forward ashore, including over 40,000 sailors and Marines in East Asia and the Pacific. Consistent with the QDR, you see 51 ships deployed to the Pacific and 34 to the Middle East, reflecting the directed strategic focus in these regions.

So overall, these are the forces that over the past year provided the president immediate response options, including the USS George H. W. Bush when she shifted from conducting operations in Afghanistan in 30 hours to launching Hornets into Iraq and Syria. The Bush Strike Group used the sovereign maneuver space of the sea to provide the only coalition option to project power against ISIL for the first 54 days of that operation.

The USS Truxtun arrived in the Black Sea within a week of the Russian invasion of Crimea, providing presence and reassuring allies. USS Fort Worth and USS Samson were among the first to support the Indonesian-led search for the missing Air Asia flight in the Asia-Pacific region.

Marine Corps special purpose MAGTFs provided emergent -- responded to emergent crises in Sudan, Iraq and Libya. And there's many other examples as well, all concurrent with a steady pace of engagements of over 200 engagements and exercises over the year, which included RIMPAC, an exercise off Hawaii that featured participants from 22 nations, including China for the first time, and the international mine countermeasures exercise in the 5th Fleet's arena in and around the Arabian Gulf that included participants from 44 nations.

So as you can see, the Navy and Marine Corps remain deeply engaged across the globe, demonstrating the mandate to be where it matters, when it matters.

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The execution of that mandate over the course of a decade-plus now of sustained wartime operational tempo, combined with funding that over FY '13 to '15 collectively provided $26 billion less than request, has stressed the force. This slide highlights that even while the Navy has progressed since the early '90s from deploying a quarter of the battle force each year, to a third of the force today, it continues to be over-subscribed to meet the real world demand of the combatant commanders in executing the strategies we just talked about.

And do the build please on the slide.


These operational summary charts for calendar years '13 and '14 show the continued consumption of readiness above planned levels. And concurrently, on the upper chart in green, you can see the trend in deployment lines, which have increased over time by a third, as well as the deployment-to-dwell ratio of the Marine Corps remains stressed at one-to-two against a sustained goal of one-to-three.

It's this combination of sustained high OPTEMPO for a decade-plus now and reduced resources over FY '13 to '15 that has resulted in a force that cannot provide the contingency response forces needed by the strategy today, and that's challenged in addressing maintenance backlogs, delayed training to modernization, and the impact of extended deployments on our people.

So this budget makes key investments to improve these trends, including in shipbuilding and end strength investments, to reduce operational tempo pressure by increasing capacity, and investments in shipyard infrastructure and shipyard and aviation depot manning that target maintenance backlogs to restore readiness.

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This is the funding that's going to fund -- going to resource tomorrow's Navy and Marine Corps, shown in 2015 constant dollars. As you can see, going back to the peak funding five years ago in FY '10 through the end of the future years defense plan or the FYDP, five years from now in FY '20, the department's resources are reduced by a fifth at the PB16 level. At sequestered BCA levels, they would -- through 2020 -- they would decline by a quarter.

So it's within the context of this very challenging fiscal environment, and clearly a still very dangerous and dynamic security environment, that the programmatic priorities highlighted in the slide were applied to provide a balanced force capable of executing the QDR assigned missions.

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Bringing that display now into then year dollars as shown here. And do the build, please.

This magnification of the FY '14 to '20 years shows the PB14 request level in blue. And PB14, of course, was the budget that was submitted with the 2014 QDR to execute that strategy with some risk. This year's PB16 request is shown in green below that, and the bipartisan Budget Act and Budget Control Act level is below that in red.

The PB16 request is $25 billion less than the PB14 level, over 16 to 20, and $2.5 billion less just in FY '16. That represents increased risk to the department's ability to execute the QDR assigned missions, primarily in the missions of projecting power despite anti-access area denial challenges and in executing concurrent major contingencies to deter and defeat aggression.

If the department were funded instead at the sequestered levels shown in red, that would be an additional FYDP reduction of $44 billion. As the service chiefs testified last week, the department would be unable to execute the QDR strategy at that level of funding due to the substantial degradation in readiness, capability and capacity.

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So we'll spend some time going into each appropriation by detail, I think in sufficient detail to answer many of your questions. But before we do that, I want to show the overall appropriation balance on this chart.

Starting with the military personnel account in blue at the lower left, this appropriation is 29 percent of the FY '16 request across the Department of Navy. That's a $1 billion increase from the '15 enacted level, includes the restoral of funding for the USS George Washington and the 10th Air Wing; funding for cruiser manpower in accordance with congressional direction; and funding of Marine Corps end strength at 184,000.

The operations and maintenance account in red, funds and elements used to operate the force, at 31 percent, this account is $3.7 billion higher than the '15 enacted level, reflecting continued forward presence operations, strengthening of the nuclear deterrence enterprise, and emphasis on restoring stress readiness, including at facilities and the maintenance backlogs that I just highlighted.

The procurement account in green, that's 28 percent of the request, that's an increase of $5.9 billion from the '15 level, reflecting sustained focus on providing stability and the ship-building account. Increased Joint Strike Fighter procurement in both the Navy and the Marine Corps, and Marine Corps procurement of the Joint Light Tactical Vehicle and Amphibious Assault Vehicle upgrades.

Research and development in purple, at 11 percent, is a $1.6 billion increase, reflecting emphasis in developing key capabilities for the future, including the Ohio Replacement Program, Joint Strike Fighter, and the Amphibious Combat Vehicle.

And finally, new infrastructure investment in light blue is steady at one percent of the budget, reflecting the continued challenging fiscal context that the services face.

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The military personnel accounts, both services are on a path to align end-strength with a force structure required by the strategy, following periods of reduction. The Marine Corps is coming down from a peak of 202,000 in FY '09 to a sustained level of 182,000 by the end of the FYDP. And the Navy has drawn down over time from a level of 383,000 in FY '02 and will end the FYDP at 330,000.

As I just highlighted, the Navy growth from the '15 level reflects restore all the G.W., the George Washington, and the 10th Air Wing, restoring the base budget of end strength for the nine additional -- (inaudible) -- cruisers, and also funded increased junior officer billets to reflect historic execution levels.

Navy end strength over the FYDP aligns with delivery of ships under construction as the battle force grows to 304 ships by 2020. Collectively, these adjustments provide stability in end-strength for the specified force structure.

The Marine Corps funds its active end strength entirely in the base budget in FY '16 for the first time since 2012, and holds at 184,000 marines in FY '16 to preserve deployment to dwell ratios, and to assess the pace of the drawdown for impact on small unit leadership.

And pay, this budget continues last year's emphasis on increased sea pay, special incentive pays for critical skills, additional compensation for sailors and Marines on extended deployments of over 220 consecutive days, and it funds a 1.3 percent pay raise versus the one percent FY '15 pay raise.

As Under Secretary McCord discussed earlier today, the FY '16 budget across the Department of Defense again proposes revisions to slow the rate of growth in the military health system, limit growth and BAH rates to 1.5 percent per year, and reduces commissary agency subsidies over two years.

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In the area of civilian personnel, this budget resources the work force required to sustain currently funded full-time equivalent profiles or FTEs and executes new initiatives to improve shipyard capacity and to improve nuclear weapons facility and oversight.

Overall, the department's FTE profile declines by 2,500 over the FYDP. The FY '16 to '20, consistent with last year's request, and that includes a 20 percent headquarters reduction, personnel headquarters reduction from PB '14 level by the end of FY '19.

Areas of targeted growth within the downward trend include public shipyard manning, grows by 2,000 FTE over '16 and '17 to address maintenance backlogs on carriers and submarines.

Fleet readiness -- manning grows by 300 FTE over FY '15 and '16 to address depot maintenance backlogs with legacy Hornets, the F-18 A to D models. And growth of 224 FTE is funded for increased nuclear surety, as recommended by the DOD nuclear deterrence enterprise review.

Cumulatively, these overall numbers again reflect the essential contributions of our civilian personnel across the force. They've been vital to our ability to sustain that high OPTEMPO over the past decade, and they remain vital in executing our mission going forward.

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The department's readiness accounts are tightly focused. I'm meaning the operational tempo, requested by the combatant commanders, and properly sustaining ships, aircraft, and ground equipment to reach their expected service lives, and in properly training our people and preparing them to deploy forward.

FY '16, base and OCO readiness metrics are funded through the historic levels shown here, as with the '15 request. This budget funds ship operations in the base budget at 45 days underway per quarter when deployed, and 20 days when not deployed. And to 58 and 24 days respectively in those categories with OCO.

Base budget flight hours are funded through the historic level of a 2.5 (inaudible) for the Navy, and 2.0 rating for the Marine Corps, with the exception of legacy Hornets in both services, whose flight hours are constrained by the depot maintenance backlogs highlighted earlier.

OCO-funded flight hours decrease to reflect reduced Afghanistan operations.

Ship depot maintenance is funded to 80 percent of the base budget and 100 percent with OCO. And aviation depot maintenance is funded through the fleet readiness center's capacity: 83 percent of the total requirement in base and OCO funding.

This funding includes resources for critical chain initiatives to improve depot through put, such as the increased hiring of civilian engineers and artisans, as mentioned earlier.

Marine Corps ground equipment readiness funding and base in OCO is returning to historic levels. As OIF/OEF reset continues, 91 percent of the total requirement is funded in base and OCO.

Facility sustainment funding improved to 84 percent and 81 percent of the requirement, respectively, for the Navy and Marine Corps. From 70 percent 75 percent, respectively, last year in FY '15's budget. Facility sustainment funding, however, remains pressurized at 68 percent and 73 -- 68 percent and 73 percent, respectively, over FY '17 to FY '20.

Finally, in FY '16, this request, the department meets the statutory requirement for six percent depot investment.

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Secretary of the Navy's consistent direction is to achieve stability in ship-building in order to affordably field the battle force required by the strategy. This program funds 48 ships over FY '16 to FY '20, the same number as last year's program over those years.

Highlights include continued funding of two destroyers and two submarines each year across the FYDP.

The second FY '16 destroyer is projected to be the first Flight-3 version, incorporating the air missile defense radar that provides capability to simultaneously conduct anti-air and ballistic missile defense operations.

This budget fully funds an FY '16, the balance of the LPD-17 that Congress provided part of your funds for, which funds the next LHA in FY '17 and the first LXR replacement for the LPD class in FY '20.

The Refueling and Complex Overhaul of the USS George Washington is funded with a projected start date of mid-2017.

USS Enterprise CVN-80 -- full funding starts in FY '18.

An Ohio replacement program advanced procurement funding starts in F.Y. '17, leading to procurement for the first Ohio replacement vote just outside the FYDP in F.Y. '21.

Three Littoral combat ships are funded per year, from F.Y. '16 through FY '18, and two and three units of the modified -- the frigate version are from -- in FY '19 and FY '20, respectively.

R&D funding for the improved versatility and survivability features of these new versions of $185 million is also programmed from FY '16 to FY '20.

The first TAOX replacement oiler is funded in '16, with additional procurement of one per year over '18 to '20. Total procurement for this class is forecast to be 17 replacement oilers.

Changes from the PB '15 plan include rephasing a tug and salvage ship within the FYPD, and pushing a T-AGOS ship from '20 to '21 while the department reviews the viability of extending those ships' service lives.

Below the gray line on the chart, I'll highlight five ship-to-shore connector craft and four landing craft air cushion service life extensions. They're funded in FY '16. These are the high-speed connectors that provide the capability to rapidly assault forces from amphibious ships to the beach.

Overall in FY '16, 14 ships are delivered, three are retired, bringing the FY '16 battle force to 282. But with the FYDP the battle force grows to 304 ships by 2020.

And finally, this budget funds an FY '16 operations sustainment and manpower for the 11 cruisers and the three LSDs proposed for long-term phase modernization. It supports congressional direction to induct two of those cruisers into phase modernization in FY '16. And it also inducts one LSD into phase modernization in FY '16.

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In aircraft procurement -- an overall increase of 36 aircraft in FY '16 from the PB-15 plan. Largely reflects the restoral of 29 MH-60 Romeos in conjunction with restoral of the George Washington and the 10th Air wing.

Other increases from the PB '15 plan in FY '16 include two additional F-35 Charlies, an additional P-8 and an additional KC 130-J. Each of those type model series is -- provides key capability central to the QDR missions.

Across the FYDP, however, our fiscal constraints drove a new reduction of 16 F-35 Charlies and two -- two E-2D's from PB '15, contributing to the higher risk and specific QDR mission sets that I discussed earlier.

A 35-B production for the Marine Corps increases, as previously budgeted, to support stand-up of the 3rd Squadron in Yuma in FY '18.

Advanced procurement starts in FY '16 for the CH-53 Kilo, replacement for -- of the Marine Sea Stallion Helicopter. CH-53 K low-rate initial production begins in FY '17.

As shown, the EA-18 Growler line completes in '15, as the Growler progresses to full operational capability with stand-up of the 15th and final squadron in 2017.

The PB '16 program accelerates P-8 design and production to complete the buy in '19. And over FY '18 to FY '20, the request funds the first 24 of 44 total Navy variant to the V-22s, to replace the C-2 carrier on-board delivery aircraft.

Forecast initial operational capability for the Navy variant is FY '21.

An unmanned aircraft low-rate initial production of the MQ-4 Triton starts in FY '16, while MQ-4 quantities decrease by one each in '16 and '16 from PB '15, due to fiscal constraints.

Fire Scout production continues throughout the FYDP at two per year, an increase reflecting the fielding rate required for LCS mission modules and combat and commander requirements.

Our RQ-21A Blackjack production in FY '16 increases by three systems funded in OCO for Navy spec war requirements. And I'll cover the UCLASS system in the upcoming R&D overview.

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Weapons procurement -- the quantities are reduced from the PB '15 level by 1,000 weapons in order to align fielding profiles with updated aircraft integration timelines and to focus funding on future capabilities, given the overall fiscal constraints.

A major reduction from (PB '15 is the decrease of 750 small diameter bomb two weapons across the FYDP to 1590.

Aligning SDB 2 procurement profile with a planned Super Hornet integration in FY '20 and the new F-35 block four scheduled date of FY '22.

And Joint Standoff Weapon, or JSOW -- and tactical Tomahawk production, and in FY '15 and FY '16, respectively, as shown, due to region inventory requirement.

JSOW production was ended based on an updated analysis of targets at inventory requirements and ongoing investment from related weapons.

The 100 Tomahawk missiles funded in '16, combined with the 243 missiles that have been funded in the FY '15 bill sustained production deliveries through FY '18. And in combination with ongoing replenishment spares and modification kit funding supports the Tomahawk depot requirements and the start up of the tactical Tomahawk recertification line in FY '19.

This budget funds the interim solution of the next generation anti-service weapon between development of the long-range anti-ship missile, or LRASM -- with an early operational capability on Super Hornets by FY '19.

The analysis of alternatives for the next generation land-attack weapon will also commence this year. The department intends to study both the anti-ship and the land-attack mission areas, in this analysis of alternatives with the goal of maximizing commonality and reducing overall development cost and schedule.

The LCS surface-to-surface mission module includes for the first time in FY '17 Longbow Hellfire, procured in weapons procurement, Navy.

And finally, an aircraft weapon, I'll highlight the A-9X Block 2, expected to complete operational test and declare initial operational capability in the second quarter of '15 through '16. Remove funding for A-9X Block 3 development, with a portion of those funds moved to Block 2 for hardware upgrades and to improve in sensitive munitions requirements.

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In Marine Corps procurement, base budget funding increases by just under $200 million in FY '16 from the enacted FY '15 level, reflecting the start of low-rate initial production for the Joint Light Tactical Vehicle, the replacement for the Humvee. Continued low-rate initial production for the ground-air task-oriented radar. The three systems are funded in FY '16.

An ongoing modernization and survivability upgrades for the amphibious assault and light armored vehicles.

Upgrades to the 392 amphibious assault vehicles serve as a bridge to procurement of the amphibious combat vehicle increment one, which is programmed to start production with funding of 26 vehicles in FY '18.

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In the Research and Development appropriation, science and technology funding is steady at 1.3 percent of the total Department budget across the FYDP.

In the areas of shipbuilding, aviation and unmanned systems, major elements include the Navy's top programmatic priority, the Ohio Replacement Program, where ongoing investments, of course, technology, development, design and integration. Leading to first boat construction starting in FY '21.

Virginia Payload Module investment support design work, leading to the first Virginia Payload Module boat construction in FY '19.

In aviation, F-35 system development demonstration is funded to maintain the F-35 initial operational capability in 2019. And the executive helicopter program is funded to stay on track for milestone C in FY '19. Milestone C, of course, enables transition to production status.

In unmanned systems, a major change is in the unmanned carrier-launched airborne surveillance and strike, or UCLASS program. The PB '16 profile delays early operational capability to the 2022 -- 2023 timeframe in order to complete a comprehensive review of requirements. This approach will shift the release of the air segment request for proposals to FY '16.

Work on the other UCLASS segments, such as the carrier segment and the control system and connectivity segment. Associated program of record such as stand-up at the integration labs and test facilities continues throughout the requirement review process in order to reduce cost and mitigate overall program risk.

The Marine Corps' major R&D initiative continues to be the amphibious combat vehicle. Budget to R&D supports a first quarter FY '16 award of engineering, manufacturing and development contracts to two vendors.

In the cyber area, the department builds with this budget on prior cybersecurity investment focused on tactical networks, such as NGEN and CANES, with R&D and broader investments in combat system and control system security on tactical platforms.

This budget adds $300 million in the FYDP across a number of appropriations to improve our cyber security posture as part of the department's recently developed cyber resiliency plan.

Finally, the Navy again continues strong R&D investment and -- afloat and an energy initiative to provide a more energy-efficient and operationally effective Navy and Marine Corps.

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The Navy and Marine Corps support the department's most pressing military construction needs in FY '16 with 60 construction projects.

These projects include key quality-of-initiatives, such as the bachelor enlisted quarters on Marine Corps Base Kaneohe Bay, Hawaii, and an unaccompanied housing project at Pax River, Maryland.

This request also funds projects supporting introduction of new weapons systems, such as the training facilities and hanger modifications to accommodate F-35s at NAS Lemoore and support facilities NAS Jax, NAS Sigonella and Joint Base Pearl Harbor.

A live fire range on Guam is funded to support the training of 4,700 Marines planned for relocation at Guam by FY '21.

Family housing, the request supports operation lease and maintenance of 74,000 units worldwide. No new public-private ventures were funded in the family housing construction.

Eight energy resilience projects are funded in '16. These projects upgrade aging utilities infrastructure to increase resiliency and support continuity of operations.

The projects include electrical repairs to piers at the Naval Station Norfolk, include the waterfront utilities at Norfolk Naval Shipyard and microgrid expansion and Marine Corps Air-Ground Combat Center in Twenty-Nine Palms, California.

Beyond those eight projects, the department continues to lead with energy initiatives spanning gas turbine efficiency, Marine Corps expedition energy conservation, aviation fuel conservation and hybrid electric biotechnology.

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The Naval-Marine Corps FY '16 OCO request of $7 billion is $2.6 billion less than the '15 request, reflecting reduced operations at Afghanistan, the end of OCO funding for Marine Corps overstrength. It added incremental cost for ongoing counter-ISIL and in-theater operations and maintenance reset.

OCO procurement includes RQ-21 Blackjack UAVs that I previously highlighted, replacement of ordinates expended in counter-ISIL ops to date and aircraft countermeasure and threat warning upgrades.

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Over all, the FY '16 budget request summarized here reflects a balance of investments, guided by the QDR strategy and related combatant commander requirements in executing that strategy across capability, capacity and readiness, quality of service and the additional items highlighted here.

The challenging fiscal contacts that I highlighted in the first few slides throw hard choices across each of these elements, including in high-end aviation, weapons quantities and the facility sustainment over the FYDP.

Across the full scope of the request, there is a strong focus on innovation and reform that provided a foundation for maximizing the value of the resources invested and sustaining our warfighting advantage.

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So this completes my review of the Department of the Navy and Marine Corps '16 request subject to your questions.

Yes?

Q: Could you talk a little bit more about sort of what the plan is with the cruiser modernization effort? Because there -- there was a little -- a lot of confusion last year as far as how many ships were going in, how many ships were coming out, what exactly the Navy's plan was.

Could you -- could you just walk through sort what the schedule is now?

REAR ADM. LESCHER: Sure.

So last year in the PB-15 request, the department had proposed to put into long-term phase modernization 11 of the cruisers. That led to a conversation with the Congress about the tradeoff of savings achieved by that approach versus capacity and near-term risk.

What this budget proposes to do is, in fact -- meets the requirements of the legislation, of the direction -- of the legislation of both NDAA and the -- (inaudible) -- bill, which is the so-called 2-4-6 Plan.

-- two cruisers per year for a long-term phase modernization period no greater than four years and no greater six in modernization at any given time.

So in FY '15, this year, we're, in fact, inducting the first two ships, the Gettysburg and Cowpens. This funds in FY '16 the induction of the next two ships, Pittsburgh and Chosin, as well as induction of an LSD.

So that essentially is the proposal going forward. So it's still 11 cruisers will get long-term phase modernization, but the pace at which it's done is now at the 2-4-6 construct level.

So this still provides the advantage of extending the service lives of the ships, which was very important from the Navy perspective, from 35 to least 40 years is the expectation.

So that helps to depressurize some of the peak SCN construction costs that we see with the Ohio replacement, and that is very much a focus and a concern of the department. So in a nutshell, that is what is submitted in this request.

Q: (inaudible) -- the concern of the department, the SSBNX, does your plan -- your FYDP plan -- (inaudible) -- placeholder dollars for advanced procurement from '17 through '20 for the SSBNX? Or are you assuming all those costs are going to be borne in this now still nebulous sea-based national deterrence fund?

REAR ADM. LESCHER: No. This FYDP plan funds both the advanced procurement of about $5 billion and the R&D of about $5 billion in the FYDP. So, the department's strong view is when the construction costs start with the first boat in '21, and then particularly when it gets to the point of a boat every year from '26 to '35, that additional topline relief is required.

I mean, our new construction SCN averages about $15 billion per year, and these boats are, once past the lead boat, will be about $10 billion per year. So it will require about two-thirds of the SCN absent relief. And they are the top programmatic priority at the department. They will get built. Very much a concern on the impacts to the broader shipbuilding approach, absent the -- the relief that we feel is required to do this.

Q: So I'm clear, in the -- (inaudible) -- in the deterrence fund, then if the dollars are put in there, that kicks in after -- in 2021 and beyond, and not before that?

REAR ADM. LESCHER: So, I mean, our view of the deterrence fund is that it's a great first step in bringing recognition to this challenge that our leadership has talked about very directly.

So I think it's the start of a conversation with the committees about what this fund has to do, because the bottom line key issue here is not the fund, it's the funding. It's what's actually going to be required to do that. So I think that's a work in progress and it's a topic for continued conversation with the committees.

Q: To be clear, because you're going to get asked this a lot, between 2016 and 2020, the Navy will be spending its own dollars on advanced procurement for the submarine program.

REAR ADM. LESCHER: That's what's in the budget right now.

Q: How much is that again?

REAR ADM. LESCHER: It's -- (inaudible) -- exact figures, it's about $5 billion of advanced procurement and about $5 billion of R&D spending.

Q: Okay, but through those five years?

REAR ADM. LESCHER: Correct.

Q: Thank you.

REAR ADM. LESCHER: Yes?

Q: Jon Harper with Stars and Stripes.

Can you break out the impact of sequestration in fiscal '16 for the Navy and Marine Corps separately? In the budget documents, it just gives the impact on the Department of the Navy overall. It doesn't specify for each of the services.

REAR ADM. LESCHER: Well, we can certainly give you the dollar figures if you want. I'd be happy to break that down for you. I think the broader question with sequestration, you heard the discussion today. You know, people are saying, "Hey, where's the cut list?" And in fact, the strong response, as the service chiefs testified last Wednesday, is, hey, the framework for informing those -- those tradeoffs; hey, what are the things that ought to appear to pay that bill? Start with an integrating strategy, right?

And so, the discussion is, and you heard the vice chairman, you heard the DEPSECDEF talking about that today, and beyond. The conversation really needs to go, and in fact -- go to slide two, if you would.

Slide before that.

The conversation really belongs at this level initially, which is of the 10 missions of the defense strategic guidance, as the vice chairman talked about. Hey, we need to really at levels below the PB16 request, not even fully down to sequestration, understand how that's going to change. And then once we have that understanding, then we can start making informed tradeoff decisions about how you integrate Army, Air Force, Navy, and Marine Corps -- (inaudible).

So we have a full spectrum joint force. Absent that, what's the basis for making those choices?

And I would also point to you that both the secretary of the navy and the CNO have been -- could not have been clearer about their priorities for conducting that type of drill. And that's very clearly focusing on preserving and protecting those things that take the longest time to restore to health after the damage of sequestration.

And there's really two things that they highlight. One, of course, is people. So folks on the quality of the service, the wholeness of the force, to protect that from the damaging mechanism of sequestration. And the SECNAV very clearly at SNA talking about from the material list the thing that is least reversible that we protect is the shipbuilding as well.

So those priorities on people and shipbuilding is what we would bring to this broader discussions on a strategically informed list that I think is what you were hinting at.

Q: So -- (inaudible) -- had that on hand -- (inaudible).

REAR ADM. LESCHER: Yeah, -- (inaudible) -- get that. We'll get that to you, absolutely.

Yes, sir?

Q: On the Blackjack, you said three of them that were added go to Naval Special Warfare Command. Are the other four for the Marines? Or are they --

REAR ADM. LESCHER: Right.

Q: Okay, so we've got --

(CROSSTALK)

REAR ADM. LESCHER: Right. The ones that are not purchased in OCO are actually -- (inaudible) -- the Marine Corps account and purchased for the Marines.

Yes? In the back?

Q: (inaudible) -- from the -- (inaudible).

I was wondering if you could describe some of the Navy investments that are going to be included in fiscal year 2016 for the Asia rebalance. And also, I was wondering if you could talk a little bit more about the construction project on Guam. It's $126 million. Is that going for the firing range? Is that going to create other facilities there?

REAR ADM. LESCHER: Yeah, okay.

So, in order, the rebalance to the Pacific question and how that is funded and what's being prioritized in this budget to do that. There's a number of aspects to that. So one is from a basing perspective. So this budget continues the strategic lay-down transition that has been consistent over a number of years of getting to a goal of 60 percent of our aircraft, 60 percent of our ships placed in the Pacific region by 2020.

From a presence perspective, you recall on the chart that we had 52 ships deployed to the Asia Pacific. The -- what's funded here, the expectation is that that increases to 65 by 2020, from a capability perspective, in terms of investments that are reflected there.

So part of the rebalance to the Pacific is to preferentially posture advanced capability to the Pacific region. So when you look across P-8s, F-35s, E-2Ds, MQ-4 Tritons, the DDG-51 Flight III and the DDG-1000 -- all of those capability aspects are preferentially put to the Pacific.

And then from an infrastructure perspective, so with investments in Guam and Iwakuni, et cetera, are all again focused and consistent with that strategic direction on the transition to the Pacific.

Your specific question on the MILCON project in Guam, it is the live fire training range that is what is in fact funded in that area.

MODERATOR: We have time for just one more question.

REAR ADM. LESCHER: Okay.

Yes, sir?

Q: Sir, Brian Bradley, Nuclear Security Deterrence Monitor.

I noticed that there was $1.2 billion in the budget request for Trident II modifications. I was wondering for RDT&E on Trident II modifications, I was wondering what proportion of that was dedicated to the Ohio Class replacement. It didn't speak at all to that.

REAR ADM. LESCHER: I'm not sure I understand your question; $1.2 billion -- what portion of the Trident II is for Ohio replacement?

Q: I apologize. I was looking at the wrong one. Sorry.

REAR ADM. LESCHER: Another question?

Q: No, sir.

REAR ADM. LESCHER: Okay.

Yes, sir?

Q: Could you talk a little bit more about the shift in the IFC for U-Class? What's -- what's going on there? I mean, where -- you know, the RFP was supposed to come out in September. Now, it's kind of nebulously not quite sure when that's coming out. Could you walk through sort of what's happening -- (inaudible)?

REAR ADM. LESCHER: Yeah, very briefly. When I talked about the new date -- expected date for RFP, but it's the comprehensive review of requirements as part of our broader portfolio review of the ISR portfolio. So the department's taking a brief pause here to do a comprehensive review across the ISR portfolio, black and white systems, and understand where this best contributes for this amount of investment within that portfolio.

Okay. Thank you.