Hill Denies Money for Submarine Fund

January/February 2016

By Kingston Reif

Congress in December declined to provide funding for a special budget account it created in 2014 to pay for a dozen new nuclear-armed ballistic missile submarines amid ongoing concerns about the high cost of the boats and a debate about whether the fund would save money.

Lawmakers also voted to withhold 75 percent of the Army’s budget request for the Joint Land Attack Cruise Missile Defense Elevated Netted Sensor System (JLENS) after part of the blimp-borne radar system crashed in northeastern Pennsylvania on Oct. 28.

Those provisions were part of the fiscal year 2016 omnibus appropriations bill, which passed the House and the Senate on Dec. 18. Fiscal year 2016 started on Oct. 1, 2015, and runs until Sept. 30.

Navy officials have repeatedly warned that the service’s projected long-term budget is not large enough to accommodate the program to build the new submarines, known as the Ohio-class replacement program, and meet its needs for conventional ships. (See ACT, October 2013.) The Navy estimates that the 12 planned boats, which are slated to be purchased between 2021 and 2035 and replace the existing fleet of 14 Ohio-class subs, will cost $139 billion to develop and build.

In an attempt to address the Navy’s concerns, the fiscal year 2015 National Defense Authorization Act created the National Sea-Based Deterrence Fund, a separate budget account outside the Navy’s regular shipbuilding account that would provide a mechanism for the Navy to buy the new boats without reducing funding for its other shipbuilding programs. The authorization bill for the current fiscal year, which President Barack Obama signed on Nov. 25, expands the purview of the fund and provides the Navy with special acquisition authorities, such as the ability to buy components for multiple boats in a single bulk purchase, which supporters say could reduce the cost of the new submarines.

But critics, including Frank Kendall, the Pentagon’s top acquisition official, maintain that the fund is a gimmick because extra monies will have to be found somewhere in the Pentagon’s budget with or without the fund. The critics also argue that Congress can authorize more-efficient acquisition practices in the absence of a separate account.

The actual transfer of money to the fund has to be approved by lawmakers through the appropriations process. The House defense appropriations subcommittee, which has been critical of the fund, attempted to prohibit the transfer of fiscal year 2016 monies to the account. But the full House overruled the subcommittee ban, which the full Appropriations Committee had accepted, in approving two amendments to the defense appropriations bill that removed the prohibition and made $3.5 billion available for transfer. The Senate Appropriations Committee version of the bill did not authorize the transfer of money to the fund.

The final omnibus bill reflects the Senate position and does not approve money for the fund.

The omnibus bill also takes a hard line on the JLENS program, slashing $30 million from the budget request of $40.6 million due to “test schedule delays.” In the Oct. 28 incident, one of the two tethered blimps that make up the current test deployment of the system detached from its mooring station near Baltimore, dragging 6,700 feet of cable for three hours before finally coming to rest. (See ACT, December 2015.) The system is designed to detect and track objects such as cruise missiles and other airborne threats.

In a December email exchange with Arms Control Today, Maj. Beth Smith, a spokeswoman for the North American Aerospace Defense Command, said an Army investigation to determine the cause of the incident is “still ongoing” and could take 90 days to complete. A decision about whether to continue the planned three-year test of the system’s capability to contribute to cruise missile defense “will be made following the investigation’s conclusion,” she added.

In a Jan. 5 email to Arms Control Today, an aide to Sen. Dick Durbin (D-Ill.), vice chairman of the Senate defense appropriations subcommittee, said that “after more than $2.7 billion invested in the program, continuing criticism of its reliability, and the near-tragedy in October when the aerostat broke free from its tether,” the omnibus bill “does not support continuation” of the test of the system in fiscal year 2016.

Signed by Obama on Dec. 18, the omnibus appropriations bill is a $1.1 trillion conglomeration of 12 appropriations bills that had to be passed to keep the government operating. The bill was made possible by an Oct. 26 agreement between the White House and key congressional leaders on new spending levels for fiscal years 2016 and 2017.

Nuclear Modernization

The omnibus bill largely supported the Obama administration’s proposed funding hike for programs to sustain and to rebuild nuclear-armed missiles, submarines, and bombers and their associated nuclear warheads and supporting infrastructure. (See ACT, March 2015.)

The bill includes the requested amount of $1.4 billion for the Navy’s Ohio-class replacement program, an increase of $100 million above the fiscal year 2015 appropriation, and $75.2 million for the Air Force’s effort to develop a replacement for Minuteman III intercontinental ballistic missiles (ICBMs), an increase of $68.3 million over last year’s appropriation.

The bill also provides the requested amount of $8.9 billion for nuclear weapons activities conducted by the Energy Department’s semiautonomous National Nuclear Security Administration (NNSA), an increase of $667 million, or 8 percent, above the fiscal year 2015 appropriation. The appropriation for weapons activities includes $195 million to begin refurbishing the existing nuclear air-launched cruise missile (ALCM) warhead, an increase of $186 million above last year’s appropriation of $9.4 million.

The omnibus bill provides $16.1 million for the Air Force’s program to develop a new nuclear ALCM to deliver the refurbished warhead, a 56 percent reduction below the request of $36.6 million, and $736 million for the program to build up to 100 new long-range strategic bombers, a 41 percent reduction below the request of $1.3 billion. These reductions reflect schedule delays that decreased the budget requirements for both programs in fiscal year 2016 below the levels that were originally anticipated.

In addition, the bill includes a policy provision prohibiting the use of fiscal year 2016 funds “to reduce or to prepare to reduce” the number of deployed and nondeployed U.S. strategic nuclear delivery systems below the levels the Pentagon has said it will retain as it adjusts its forces to meet the requirements of the New Strategic Arms Reduction Treaty by the treaty’s implementation deadline of 2018. (See ACT, May 2014.)

Missile Defense Gets Increase

The omnibus bill provides $15 million in unrequested funding “to expedite the construction and deployment of urgently needed missile defense assets in various locations within the Continental United States, including Alaska and Hawaii.”

The bill does not specify whether this money can be used to begin building a third missile defense interceptor site on the U.S. East Coast to augment existing defenses in Alaska and California against a limited ICBM attack.

The House version of the fiscal year 2016 military construction appropriations bill included $30 million to begin early planning and design activities for a third site. The Senate version of the bill did not include this funding.

In a Dec. 23 email, Missile Defense Agency (MDA) spokesman Richard Lehner said the agency is currently “assessing” its options for spending the additional $15 million. He added that “no construction [is] planned for an East Coast site” as there has been “no decision to construct a site.”

The Defense Department announced in January 2014 that it would conduct environmental impact studies for four possible missile defense sites in the eastern United States, as directed by Congress. (See ACT, March 2014.) Lehner said these studies are scheduled to be completed by the end of fiscal year 2016.

Overall, the omnibus bill provides approximately $8.1 billion for the MDA, an increase of $175 million above the administration request.

MOX and the Alternative

Lawmakers provided the NNSA with a small amount of money to begin work on an alternative to the mixed-oxide (MOX) fuel fabrication plant at the Savannah River Site in South Carolina. The MOX fuel program is designed to turn surplus plutonium from the U.S. nuclear weapons program into fuel for power reactors.

Of the $345 million the administration requested for construction of the MOX fuel plant, the omnibus bill provides $340 million for construction and $5 million to begin early planning and design activities for the “dilute and dispose” approach, which would down-blend the plutonium with an inert material for direct disposal in a repository. The bill prohibits the NNSA from actually diluting plutonium.

The language on the MOX fuel plant represents the latest round of a long-running battle over the best way to handle the surplus weapons plutonium.

The omnibus bill includes $1.7 billion for the NNSA’s fissile material security and nonproliferation efforts, the same as the budget request and an increase of $90.7 million, or 5.6 percent, above the fiscal year 2015 appropriation