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Transcript
Navy Officials Hold a Press Briefing on President Biden's Fiscal 2025 Navy Budget
March 11, 2024

STAFF:  Good afternoon.  I'm Lieutenant Junior Grade Luke Bienstock, the Public Affairs Officer for the Department of the Navy's Fiscal Year 2025 presidential budget request.  The Honorable Erik Raven, Under Secretary of the Navy, and Deputy Assistant Secretary of the Navy for Budget, Rear Admiral Ben Reynolds, will brief the Department of the Navy's submission for F.Y. '25.

Following the overview, they will take questions as time permits.  Questions should focus specifically on the Department of the Navy's F.Y. '25 budget request. 

Mr. Undersecretary?

UNDER SECRETARY OF THE NAVY ERIK RAVEN:  Thank you very much, and good afternoon.  I'm grateful to be here with Rear Admiral Reynolds to brief the Department of the Navy's F.Y. '25 President's budget request.  This budget is focused on delivering resources to ensure America's maritime forces, our Navy and Marine Corps team, are ready, resilient, flexible, and forward deployed to do our nation's tasking, whether that's supporting naval diplomacy, crisis response, building partnerships, or protecting the world's global economy which floats on seawater.  We need to compete and be able to win during this time of great power competition.  Next slide?

PB '25 is a strategy-driven budget that is nested under our National Security Strategy and our National Defense Strategy.  This budget builds upon the tenets of our national defense, which are integrated deterrence, campaigning, and building enduring advantages.

Aligned with Secretary Austin's three priorities, as seen here, our request demonstrates the department's commitment to providing a ready, modernized, and capable naval force, a force that continues to be the nation's primary instrument of seapower and maritime statecraft, now and into the future.

Secretary Del Toro's strategic guidance solidifies that we are one Navy and Marine Corps team, and it identifies three enduring priorities - strengthening maritime dominance, building a culture of warfighting excellence, and enhancing strategic partnerships.

The budget also supports the CNO's America's Warfighting Navy and the Commandant of the Marine Corp's Force Design.  The PB '25 request is reflective of what allows us to build, modernize, and maintain the right mix of capabilities to defend against great power competition among the other threats while also investing in our future.  Next slide?

PB '25 prioritizes our people, readiness, and it invests in our industrial base to build and sustain our fleet.  The department continues to make significant strides across our three enduring priorities established by the Secretary of the Navy, which you can see labeled here.

Just a few of the examples and work of each one of these areas.  Under strengthening maritime dominance, we invest in nuclear deterrence and maintaining 31 amphibious ships as the law directs.  In building a culture of warfighting excellence, we make investments to improve quality of life and quality of service.  And in enhancing strategic partnerships, we make major investments in building capacities for submarines, ships, and ship maintenance.

The - these three priorities at - that we, as a department, are all supporting, each of these align with the National Defense Strategy.  Next slide?

While we're gathered here today, our sailors and Marines are currently deployed around the - around the globe to actively deter and respond to a wide set of challenges posed by nations and non-nation state actors alike. 

As Secretary Del Toro and other defense leaders have made clear, the challenges and threats we face range from the Russo-Ukrainian War, now in its second year, the continued aggression across the Indo-Pacific instigated by the People's Republic of China, as well as the maligned influence throughout the Middle East stemming from the Islamic Republic of Iran's - Iran and their regional proxies.

Displayed on this slide are just a few snapshots of some of our ongoing efforts in support of regional security and stability, highlighted by the picture at the center of the USS Carney defending against aggression in the Red Sea.  Next slide?

We are and will continue to be where it matters, when it matters.  Comprised of nearly 75,000 deployed Navy and Marine Corps personnel across the globe, over a third of our battle force ships are currently deployed and one-fifth are underway.  Alongside our international allies and partners, our sailors and Marines help to uphold international norms, keep sea lanes open, and provide access to free and open oceans. 

And now, I'd like to turn it over to Admiral Reynolds to discuss some of the details within the F.Y. '25 request.

DEPUTY ASSISTANT SECRETARY OF THE NAVY REAR ADMIRAL BEN REYNOLDS:  Thank you, Secretary Raven. 

Next slide, please.  Transitioning to the fiscal slides, the FY25 President's Budget Request is $257.6 billion.  This is a 0.7 percent increase above our FY24 budget requests.  This is in compliance with the Fiscal Responsibility Act which caps defense spending.  This budget depends on enacting PB '24.  Absent an enactment, a full-year continuing resolution would be unprecedented and would drive a $12.5 billion shortfall and cause profound and lasting damage to our forces.  CR restrictions in conjunction with sequestration would expand that shortfall to $29 billion.

On the top left, you'll see a graph showing our Department of the Navy top line.  Under this capped budget we make hard choices.  We prioritize our readiness to deploy our fleet, our people, and our ability to respond in this decade of concern while taking risk and future capabilities.  In the chart in the upper right, I will highlight changes in the appropriation groups. 

Procurement is mostly flat.  We have investments in the industrial base, undersea capabilities, and Marine Corps force design.  Investments in manpower increased slightly in order to maintain strength levels and support our sailors and marines with a 4.5 percent pay increase and additional compensation. 

There is a decrease in R&D, an area we take risks to adequately fund other priorities.  Military construction decreases compared to PB '24, representing a return to typical historical levels following significant investments in PB '24.  It's about a 20 percent decrease from our — our FY24 MilCon enactment.  And then a 3.5 percent increase in operations and maintenance supports our commitment to keep ready players on the field and a postured expeditionary force capable of meeting global challenges.

Next slide?  With that backdrop, I'll brief a few slides starting with investments in our industrial base and shipbuilding, followed by other procurement accounts and our investments in the future fight.  I will then discuss readiness and investments in our shore facilities, followed by our people, and then close with how we're enhancing our strategic parts — partnerships.  Next slide. 

Our department is committing — committed to pulling every available lever to expedite the necessary ships, aircraft, and weapons to our war-fighters; both by partnering with industry to deliver new platforms and improving our ability to maintain our existing platforms. 

Starting on the top left of this slide, submarine industrial base, or SIB investments, are necessary to meet a generational increase in demand driven by recapitalizing the most survivable leg of the nuclear triad, the Columbia, on-time delivery of Virginia submarines, maintenance of in-service submarines, and national commitments made under the AUKUS agreement. 

This is an nationwide effort, building and sustaining our submarines requires more than 15,000 companies across all 50 states.  With an investment of $3.9 billion in FY25 and then $11.1 billion across the fit-up for the submarine industrial base, and with a $3.3 billion FY24 supplemental request, the Navy expects to achieve Virginia class submarine construction performance of two per year by FY28.  In addition to SIB, the Navy will continue initiatives in major surface shipbuilding programs as a mechanism to incentivize investment in the needed facilities of our U.S. shipbuilders. 

Moving to the top right, we also partner with industry in our weapons procurement.  PB '25 continues investments with $227 million to expand capacity Trident II, long range anti-ship missiles, standard missiles, and Mark 48 torpedoes.  This builds on our FY23 efforts as well as pending PB '24 investments. 

On the lower portion of the slide, I will further highlight fortifying the foundation through the Shipyard Infrastructure Optimization Program, or SIOP, the Navy's four public shipyards are essential elements of our national defense.  The average age of the naval shipyard facilities and related infrastructure is 61 years, while the average drydock age is 107 years.  And so that's — that's pre-World War I. 

In FY25 we invest $2.8 billion in MilCon and restoration at our shipyards to maximize our players on the field today and over the next few decades.  We already see results from previous years' SIOP investments such as the completed renovation of Drydock 4 at Norfolk Naval Shipyard and the contract award for drydock re-replacement at Pearl Harbor Naval Shipyard.  Finally, on the lower right, we invest $407 million in our aviation depots to get more aircraft back to the fleet.

Next slide.  The Navy procures six battle force ships and FY25.  Additionally, the budget fully funds the nation's top defense acquisition priority, Columbia class nuclear ballistic missile submarine.  Nine-point-six billion dollars, or one third of our new construction budget, will provide the second of two years of incremental funding for the second Columbia class submarine, the USS Wisconsin, as well as advanced procurement for future ships of the class. 

For attack submarines, PB '25 requests $7.3 billion for Virginia class.  This will procure the first Virginia Block VI submarine, and will initiate a nine-ship planned multiyear procurement beginning in FY25.  The request also includes advanced procurement for two FY26 and two FY27 Virginia class ships, and material for eight future Virginia class submarines executed as part of the FY25 multiyear contract. 

The budget requests $1.6 billion for the four San Antonio class LPD.  The department is committed to 31 amphibious ship requirement, with two additional LPDs programmed in the FYDP.  Other ships include the (lead ?) medium landing ship and then seven across the FYDP, two Arleigh Burke class destroyers, including completion funds for three FY23 and two FY 24 ships, and one Constellation class guided missile frigate.  We request $1.9 billion to continue incremental funding for CVNs 80 and 81, and an additional $1.1 billion to fund the USS Harry S Truman refueling and complex overhaul. 

You will note that the Navy currently has 88 ships on contract with 66 under construction procured in previous years.  As I mentioned on the previous slide, we will pull every lever to get these ships to our war-fighters.  The budget includes a divestment of 10 ships before their end-of-service life.  This is a return on investment decision.  A hull by hull assessment based on the material condition, life remaining, cost, and time to upgrade, and net war-fighting value.  We will continue to work closely with Congress for these divestments.

Next slide.  In aviation, the department's request of $16.2 billion in PB '25 procures 75 aircraft plus modernization, spares, and support equipment.  Our aviation investments include 26 F-35 Lightning Bs and Cs, 27 multi-engine trainer systems, and 19 heavy-lift CH-53K King Stallions. 

The budget continues our investment in unmanned platforms to improve ISR and close the kill chains.  We completed Triton and Marine Corps MQ-9 procurement in FY24.  We fund new capabilities for these aircraft in this budget.  MQ-25 is re-phased to a better glide path.  We're procuring three in FY25 plus advanced procurement for long lead time material for future aircraft.

Next slide.

PB '25 provides $6.6 billion for weapons procurement Navy. More than any other appropriations, our weapons procurement relies on enacting PV24 to make progress in this critical area. Pending enactment of PV24 we continue multi-year buys for four critical munitions while increasing line capacity.

The standard missile 6 or SM 6 is the fleets air defense weapon carried on board Aegis cruisers and destroyers. We buy 125 missiles in FY '25 and invest $100 million for special tooling and equipment to increase production capacity to 300 per year by FY '28. Other weapons include 90 LRASMs. That's 30 of the standard version and 60 extended range. 102 Naval Strike Missiles, 261 AMRAAMs, 182 JAGMs, 79 Mark 48 heavy weight torpedoes to include funding to address throughput in future years.

You'll notice we are not buying any conventional prompt strike missile in FY '25. The Department continuously assesses program performance and determine that the best course of action in PB '25 is to rephrase missiles to future years to allow the program time to restore technical confidence via design views and additional testing.

Next slide.

$4.2 billion continues the marine corp commitment to forest design. We procure 80 amphibious combat vehicles with improved lethality with 30 millimeter and 7.62 millimeter weapons. FY '25 funding initiates long range fires, low rate initial production.

This includes 8 LRF launchers and carriers, which — which will provide the initial equipment for the long range missile batteries in FY '27. Other Marine Corp procurement includes 123 javelin missiles, 674 joint light tactical vehicles and 12 medium range intercept capability Emrick systems. We pause Nemesis launcher and carrier production this year while maintaining equivalent purchases to support the establishment of additional batteries.

Next slide.

The FY '25 research and development request reflects the departments focus on readiness as we take risks and some future capabilities. $25.7 billion invested in the war fighting naval force to provide our sailors and marines with the most cutting edge systems, weapons and platforms to win decisively in an increasingly complex environment.

The Navy remains committed to the strategic deterrence mission funding the generational recapitalization of all sea based portions of the triad. The department slows development of next generation platforms, rephrasing the F/A-XX program while investments in future submarine and large surface combatants remain flat across the (Fed ?).

Investments in information warfare and cyber security efforts ensure command, control and communications in any environment. The Department continues to focus on key enabling technologies for unmanned programs to maximize interoperability and capability. In aviation when we continue investments in FY '25 for MQ Triton and MQ25, building on requested reprogrammings in FY '23 and our FY '24 budget.

The FY '25 Marine Corp R&D budget continues investment in modernization and innovation that support force design to include anti-ship missile systems, amphibious combat vehicles, and ground based expeditionary radar systems.

Next slide.

In readiness our Navy must be able to put the right mix of players on the field today with trained crews, ships, and air craft ready to operate and with capable weapon systems and munitions.

In the cap year, PB '25 prioritizes readiness. Starting at the top left of the slide, ship operations, funds, the fuel, parts and support necessary for the fleet to train and operate around the globe. Ship operations funding increases $600 million in PB '25 to pace battle force (steaming ?) days, fuel prices and increases in costs for logistics force.

Moving to the bottom left. The budget fund ship maintenance at $14.5 billion as the Navy continues to focus on maximizing the time our ships are available to fleet commanders. This covers private contract availabilities as well as the Navy's four public shipyards, regional maintenance centers and intermediate maintenance facilities.

On the right hand side, the flying our program funds. The flight hours to enable carrier and expeditionary strike group power project and dynamic employment. The FY '25 budget request provides 875,000 flying hours providing operations, flight line maintenance and training for active and reserved squadrons and fleet air training program.

The decrease from FY '24 represents a shift towards maintaining the high readiness levels built through investment and substantial process improvements in previous years. These hours will allow Navy and Marine Corp squadrons to train their crews and deploy ready for mission requirements.

On the bottom right the aircraft depot maintenance program paces the fleet flying (out ?) program, funding repairs of aircraft, engines, and components to ensure mission capable aircraft are available to all the warfighters.

Next slide.

FY — the FY '25 budget prioritizes the Marine Corp commitment to readiness for the nation's naval expeditionary force. Marine Crop readiness funding increases to $4.5 billion and includes $39 million for continued build-up of three marine (inaudible) regiments while maintaining the operational readiness of five traditional infantry regiments.

Other specific investments include small unmanned aircraft, global combat support systems, modernization of tactical communication IT systems and depot maintenance service life extensions for ground vehicles and integration of new radar systems.

Next slide.

PB '25 prioritize — prioritizes critical shore investments to increase fleet readiness. Continued investment in facilities is necessary to maintain our shore installations. This provides the foundation for everything we do, deploy our fleet, maintain our readiness and take care of our people and their families.

Navy FSRM is funded at $4.7 billion in PB '25, an increase of 5.3 percent. Marine Corp FSRM has increase of 7.5 percent. Moving to the right hand side of the slide, the estimate FY '24 enacted MILCON budget is $5.8 billion and the FY '25 budget request of $4.6 billion includes 20 projects in support of new platforms, shipyard improvements and (could ?) remain in Norfolk, Virginia, safety and environmental compliance.

This request provides 7 — $872 million for INDOPACOM and EUCOM posture construction to include $364 million for major construction supporting the relocation of U.S. Marines from Okinawa to Guam and Darwin, Australia; as well as $386 million for planning a design including a child development center on Guam.

Next slide.

As I said earlier, this budget prioritizes our people. The budget includes a 4.5% pay raise for our service members, followed by a 5.2 percent pay raise in 2024. For Navy personnel, PB '25 includes $41 billion for a force of 332,300 active sailors remaining relatively flat from FY '24.

The budget also provides $2.8 billion for 57,700 (resurface ?) aligned with fleet fore structure changes. The Navy is laser focused on recruiting shortfalls.  We had $134 million for additional recruiting and retention bonuses.  We continue to invest in advertising at a - higher than usual rates across multiple media platforms. 

For the Marine Corps, the F.Y. '25 budget request is based on what is realistically achievable in the current recruiting and retention environment.  The request provides $15.9 billion for an active duty end strength of 172,300 Marines and $939 million for 32,500 Reservists.

The Marine Corps remains committed to telemanagement - management objectives that support the targeted maturation of small unit leaders and technically skilled personnel.  Next slide?

Last year, the department set a new course for quality of service (inaudible) Secretary of Defense is taking care of our people.  This budget includes $1.4 billion of investments in quality of service initiatives.  For our junior sailors, we will continue improving conditions for crews on ships under construction or long-term maintenance, investing in sustainment of berthing barges, increasing options for ops - off-ship housing, and increasing access to quality food source choices.

Recognizing that taking care of Marines is a fundamental warfighting function, the Marine Corps is also focused on barracks modernization and sustainment.  The Marine Corps is inspecting every barracks in our inventory, a key step in further invest - investments needed to bring all barrack facilities to the necessary standards by 2030.

To benefit all service members, this budget includes significant investments in unaccompanied housing, childcare centers, and childcare fee assistance and recreation programs. 

We remain committed to warfighter mental and physical wellness, with sustained investments of $353 million in sexual assault and prevention and response, and increased investments in mental health and suicide prevention with a $52 million increase over PB '24 levels.  Next slide?

The Department of the Navy continues to expand strategic collaboration with the Joint Force, industry, academia, and international allies and partners. 

The generational AUKUS security agreement between the United States, Australia, and the United Kingdom is changing the geostrategic landscape in the Indo-Pacific.  This agreement is a model for leveraging industry partnerships across our three nations' defense industrial bases.

Military-to-military cooperation with our partners in every domain is a asymmetric advantage against our adversaries and is the heart of our national - national defense.  Next slide?

In closing, our PB '25 request represents the best possible mix of investments in readiness now and investments in capabilities for the future fight under a capped budget.  The budget assumes and builds on an enacted PB '24.  This budget prioritizes our people and our readiness to deploy and operate today and respond in this decade if called to.

We invest in our industrial base in order to get the ships and the aircraft and weapons to our sailors and Marines.  This is particularly true in support of our submarine and our weapons industrial base.  The budget delivers the resources necessary to operate and build a lethal naval force to defend our nation and our way of life.

Thank you.  Under Secretary Raven and I would be happy to answer any questions.

STAFF:  The AP?

Q:  Hi.  Tara Copp with the Associated Press.  Thank you for doing this.

I was struck by the slide on the number of SM-6s that you'll be buying, just that the number sort of seemed kind of small.  Given the rates that you've been seeing activity in the Red Sea, how much risk are you taking with the ships firing missiles, you know, sometimes on a daily basis to defend ships and - transiting there?

REAR ADM. REYNOLDS:  You want to take that?  Yeah, thank you very much.  The - for - for SM-6s, let me just start with the - a reminder that we had significant investment in SM-6s in our - in our PB '24 budget as well.  And probably the most important thing that we can do is to enact PB '24 and allow those investments to take hold, cause we have investments in our industrial base to increase capacity.

You're right, we have - we're investing to procure 125 missiles in '25, and look to ramp up with industry up to 300 towards the end of the FYDP.  So investing and doing everything we can with industry to do that, to include looking at alternatives for - for rocket motors or anything we can do to increase that.

One - a couple of other things on that, on the Red Sea - and you heard, I think, the Vice Chairman talk earlier about our in-depth - defense (inaudible).  So we're doing everything we can within this - within this - within '24.  We have some supplemental funding requested to help us improve our capacity in '24 and to accelerate that, and then we're looking at different - and we're looking at different weapons for defense (inaudible) to protect our - our sailors and Marines out there in the Red Sea.

Q:  ... just to feed off of that, since this is a long-term operation it seems at this point and you're having to continue to defend not only your ships but commercial ships, how much risk are you taking with the burn rate you're seeing in - in the munitions you're firing?

MR. RAVEN:  Want - want me to take that?  So in terms of ongoing operations around the world, this PB '25 budget really reflects the need to invest in readiness, people, and industrial base to set up a long-term success of our Navy and Marine Corps team.

The impacts of overseas operations, whether that's munitions expended or the cost of ongoing operations, in terms of fuel, additional maintenance, and so forth, that's - that's not built into the F.Y. '25 budget.  We'll have to work with - with Congress and - and other parties to make sure that those costs have reflected elsewhere.

STAFF:  We'll go to the phone.  Is Reuters there?  Politico?  (Inaudible).  Bloomberg?

Q:  (Inaudible).  Already, Congressman Courtney and a couple of others are complaining about the cut of (one ?).  What's your argument to them in terms of why you did what you did?  And Secretary McCord said it was a Navy decision.

And for you, the tactical - the Tomahawk, it's been more in use of (the ?) (inaudible) probably than SM-6 over there.  And you've got 22 in the budget but you've got refurbishing (inaudible) 365 (inaudible) certification.  In English, does that mean translating - transferring - or updating block fours into block five Tomahawks and that's how you're going to beef up your inventory?

MR. RAVEN:  Let me tackle the submarine question first.  So I see the F.Y. '25 budget as being very strong on the undersea.  There are historic investments in the submarine industrial base.  Last year, we presented a program with $2.4 billion of investments in the submarine industrial base.  That's up by more than $11 billion in this budget, and then in addition to that, another $3.3 billion that's pending before Congress right now in - in the - in the form of a - of a supplemental.

This budget funds nine out of 10 Virginia-class that had been projected over the FYDP.  We removed one Virginia-class out of concern for the industrial base ability to produce yet one more, while, in a capped environment, making room for these historic investments in the submarine industrial base.

But we're going about this in a - in a - in a strategic way because we're not simply taking a submarine out, we are also continuing the investment in advanced procurement to make sure that the supplier industrial base is fully funded and able to expand to meet future submarine requirements moving forward.

So in total, this F.Y. '25 budget really makes the necessary investments to set up for long-term success on both the Virginia and Columbia-class submarines.

REAR ADM. REYNOLDS:  Tony, thank - thank you for the question - Tomahawk.  And - and I - I don't want to sound like a - a broken record on this but, again, with our - with Tomahawk, like with SM-6, we do have that in our PB - we have some industrial capacity initiatives in our '24 budget, and I think that's the - that - that'll - the key to unlocking this.

If you'll recall, just like Mark 48s a few years prior, with Tomahawks, we reopened the line and we went from just re-certifying the Tomahawks we have to building new.  This - this budget reflects that, that we continue to re-certify wherever we can, we continue to look for other - other areas that we - that we can have more kits and - and buy more rocket propellant, and then we have a mix of (inaudible) rounds and recertification.

The budget is fully funded to the capacity in '25 and then across the FYDP to get to the capacity that we're looking for by the end of the FYDP.

Q:  What does "re-certify" mean in English (inaudible) block five?

REAR ADM. REYNOLDS:  That's right.  So there'd be - well, the - it depends.  To - every 15 years, we have to, just like you go through a ship modernization, we have to go through and just do a - basically a depot event for that Tomahawk. 

And so that could be anything to - to - for upgrading or it could be changing that upgrading and then making that a maritime strike Tomahawk, like, for example, we have the MST, Maritime Strike Tomahawk, in this budget, and some of those are kits to go on our current Tomahawks.

Q:  OK, thank you.

STAFF:  Defense News?

Q:  Hey, thanks.  Megan Eckstein with Defense News.  A - quick clarifications of Tara's question, and then one of my own.

On the Red Sea spending, you mentioned additional costs for ship maintenance, ship operations, aircraft maintenance operations as well.  I wonder if there's a dollar amount associated with that gap that's not in F.Y. '25?

REAR ADM. REYNOLDS:  Can I be - we'll - Megan, we do have $1.6 billion of supplemental funding that's - that's over on the Hill, I believe passed by - by the Senate, and that includes the operations in the Red Sea and that includes some additional funding, about $159 - $150 million, for - to basically re-certify and refurbish SM-2s that are - that we have today and work through other weapons systems.

So $1.6 of - of supplemental - we have about $1.6 of supplemental request for Ukraine that includes operations, and then of course our SIB supplemental.

Q:  And then - so you mentioned the DDG(X), SSN(X), and F/A-XX being re-phased and, you know, pushed back due to the budget caps.  I wonder - the - the timing of this has been at issue in the past, just because there are three big bills that would come due potentially, you know, back-to-back-to-back, and I wonder if there's a sense of the timing of those now, given that re-phasing?

REAR ADM. REYNOLDS:  Yeah, we look at that really carefully and - and we continue to look at it across the FYDP.  I think, Megan, that we did a good job here as we look across, one, the prioritization, right, prioritizing our readiness and our people today and our ability to fight, and then F/A-XX, we still remain committed to that.  That goes - that goes down to about $450, ($500 ?) million in '25, but we've ramped up across the FYDP.  And the - as technology matures, we'll learn more and develop those - those weapons systems.

An important piece to this, Megan, is not just focusing on those three weapons systems, but an immense amount of capability that we have, particularly in the Indo-Pacific, we get through our investments in things like Project Overmatch, our long-range kill chain, and - and the weapons that I talked about earlier.

STAFF:  USNI?

Q:  Hi.  Sam LaGrone from USNI News.  Talk - looking at some of this - submarine industrial base, spending would (inaudible) - you know, there's a lot of attention to (inaudible) and the Virginia as - what about Columbia?  You know, are you doing everything that you can to keep that program on track?  I think the last time we checked in with y'all, that margin was razor thin.  Are y'all able to keep up with that pace relative for this budget?

MR. RAVEN:  Yeah, so our investments in Columbia continue.  It is our number one acquisition priority.  And across the submarine industrial base, we're counting on a lot of the same not only shipyards but suppliers to support both programs.

So this budget, again, has solid investments in the submarine industrial base, really taking it to another level, but in terms of performance, several weeks ago, the Secretary of the Navy directed a 45 day review of all shipbuilding programs, not just - not just Virginia but look across the portfolio to assess really where we are on - in terms of production of each one of those classes of ships.  We're continuing that work and we'll have more on that in the coming weeks.

Q:  ... Columbia is something y'all have, like, daily updates on.  I mean, that is the number one acquisition priority and have been for some time.  (Inaudible) now (inaudible)?

MR. RAVEN:  Look, the - the stress across the submarine industrial base is - is clear, both from the supply base and - and at shipyards.  We're watching that extremely closely on - on Columbia.  And again, I think, putting that in the context of the 45 day review, which we expect to complete pretty soon, will provide the - really, a - I think, a good picture of where we are across all shipbuilding programs.

STAFF:  Task & Purpose?

Q:  Thank you.  Admiral Reynolds, you mentioned the investments in PB '24, the $6.9 million - billion in munitions.  Have any of those munitions been built yet, the refurbished Tomahawks, the SM-6s, or are you waiting until PB '24 has passed before you can start building any of the munitions in PB '24?

REAR ADM. REYNOLDS:  Yeah, the - the - so - so we can continue with the - the - at the F.Y. '23 levels of funding that we had, but that's a significant difference.  That's, like, $2 - $2 billion, maybe $1.9 billion less than our '24 levels. 

And then the other big piece of this is that when we - when we phase in these - when we really try to ramp up our - our weapons systems, we'll - we will add what we call the (inaudible) and long lead time material to try to get the industry up to another level, and that requires the multi-year funding in '24, but it also requires authorization.  So we need the budget before we can start those multi-year programs in '24.

Q:  But just checking, have any of you - SM-6s and SM-2s from PB '24, have they been built yet?

REAR ADM. REYNOLDS:  We - we continue to build - we - we continue to build rate at the capacity that - that we can.  So yes, we're continuing to build - we continue to build missiles and - and - and SM-6s in '24 and refurbish missiles that we - that we can.

STAFF:  (Inaudible) Breaking Defense?

Q:  Hi, sir, it's Justin Katz.  Two things.  On the carriers, your budget is going to move (inaudible) procurement from '28 to '30.  That industrial base has been pretty vocal about the pain it believes is going to be caused by that delay, particularly with the interval between the procurement of 82 and 81.  So could you speak to what you're doing to mitigate that damage?

And secondly, you said during your remarks that you believe you can get to two point - or two Virginias per year by F.Y. '28.  Can you talk a little bit about the calculus there?  Mr. McCord was up here two hours ago saying, you know, we're not going to buy a Virginia sub this year because the (boats ?) are delayed.  Other than pumping more money into the industrial base, what's going to change between now and '28?

REAR ADM. REYNOLDS:  OK, for the carrier first, Justin, your - your question was on - on CVN-82 and capacity?  OK, good.  The - so again, CVN - you're right, CVN-82 was a '28 ship, and now is a - is a '30 ship.  And - but we have funding across the (inaudible) for CVN 82 and 83 and then start — and then start (AP ?) in '27 for those ships to try to — to mitigate some of that get and get that long (retirement ?) material that we need.

Again, as you know, this industrial base is tight and the carriers are built and the same yards that are Columbias are built and our Virginias are built and that we do our COHs. So working with everything we can do to unlock the capacity.

And I think that the initiatives that we're doing, plus the AP, we'll do everything we can to get after that.

MR. RAVEN:  On — on getting Virginia to that 2.0 cadence that we need, the turnaround is not going to come overnight but the good news is that for several years we have been investing in the submarine industrial base to be able to improve performance across the program.

That include billions of dollars previously provided by Congress and we're seeing the signs that those investments are starting to make a difference in key areas. We've invested in hundreds of small businesses creating more than 1,000 jobs in the supply base. That's helping to expand through put and capacity for the supply brace, for the — for the SIB.

We're starting to see that — that hiring is going better in a number of places. That has been a limiting factor in previous submarine construction. And so it's not going to turn around overnight but we're starting to see the indications that the investments that we have made are starting to show a difference.

The challenge is that with many ship building programs, including submarines, the cycles are so long, it takes many years to build a submarine that it takes time for all of these — of these foundational investments to produce the results that we need. But again, our estimate is that 2028 with these investments and with the acceleration that's still pending before Congress of that $3.3 billion, we expect to be at the 2.0 cadence that we need.

STAFF:  (Inaudible).

Q:  Hi, (Malory Schwart ?). Just want to follow-up on Virginia. So I understand that the two boats of your cadence is the goal for FY '28 but many officials have said you need to get to 2.33 in order to sell to the Australians under AUKUS. So I'm just curious, you know AUKUS is, you know, being built as one of the most important security partnerships in our generation.

What are you telling the Australians about this decision to buy one per year and what it means for the partnership going forward?

REAR ADM. REYNOLDS:  Well, it's one in one year and we have a plan to procure two in the — in the — in the out years. We're being very transparent with — with all our partners about where we are and the scale of investments that we're making in this budget and that are pending before Congress.

But to be clear, the investments made in this budget are those required to get to that 2.0 cadence that we need for U.S. needs. Thanks to the Australians and the support of Congress there are additional investments that we expect to bring us up above that 2.0 delivery cadence to that 2.33 that we — we would need to produce the submarines to fulfill our AUKUS commitments and we're having regular exchanges with the Australians on the — the timing and the shape of those investments. So it's an open dialogue.

Q:  And a quick follow-up on Columbia. A report just came out that the Navy is forecasting a one year delay on the delivery of the first boat. Can you speak to that?

REAR ADM. REYNOLDS:  We're seeing stress across the industrial base. And again, I think putting this into context of the secretary's 45 day review will add additional depth and context to the challenges that we're seeing across the ship in (our ?) portfolio and we expect to have that done fairly soon.

MR. RAVEN:  Can I just add one thing. I think, (Malory ?), I think we should be, you know, positive and very — and I think excited about all of this opportunity in our industrial base and the money that we have in our supplemental funding, our PP24 and then this '25.

And then I think I said before, heck, we were at building almost five fast attack submarines a year in the — or in the early 80s. I mean we have — while we were — while we are having a generational change in our Columbia predecessor, the Ohio, I mean I think we have a real opportunity to get our industrial base to a better place and to give these ships and aircraft and weapons to our warfighters out there in the fleet.

STAFF:  Great. That's all we have time for today. Thank you all for coming.

MR. RAVEN:  Thank you.

Right

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