Navy, Marine Corps Racing to Cut $40 Billion in Spending

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Thomas B. Modly, the Undersecretary of the Navy.
Thomas B. Modly, the Undersecretary of the Navy, left, speaks with Lt. Col. Paul Kopacz at MCAS Miramar, Calif., Feb. 15. (U.S. Marine Corps/Sgt. Jake McClung)

The acting Navy secretary has ordered top brass to find ways to shift billions of dollars away from redundant or outdated programs to pay for high-ticket items -- and leaders have been given just weeks to carry out the plan.

Chief of Naval Operations Adm. Mike Gilday, Marine Commandant Gen. David Berger and other Navy Department leaders have until April 15 to find at least $40 billion that can be used to pay for new ships and ballistic-missile submarines. The review, which acting Navy Secretary Thomas Modly ordered in a memo Tuesday, must identify ways to "fund the development, construction and sustainment of this new fleet over the next five years."

"As we prepare to go to Congress to defend our ... 2021 budget request, it has become increasingly apparent that we have a challenging story to tell," Modly wrote. "We are facing three critical pressurizing mandates that are conspiring to limit our ability to deliver the Integrated Naval Force required by the National Defense Strategy."

Those requirements include a congressional mandate to build a 355-ship Navy, improving readiness shortfalls after years of high operational tempo, and a four decade-long recapitalization of the nuclear ballistic submarine force. All of that, Modly wrote, will need to be paid for amid a "flat budget environment."

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"We must act now to make tough, fiscally informed choices in order to fund our key strategic priorities using the budget we have, not the budget we wish we had," he added.

The Marine Corps referred questions about the review to the Navy. The Navy did not immediately respond to a request for information about how it will carry out the directive.

Generating $8 billion a year in savings over the next five years will be equal to about 7% of the Navy Department's annual topline budget, Modly told leaders. The savings, he said, will be repurposed to help pay for what he called his top three priorities: designing and building a 355-plus-ship Navy by 2030; ethical and educational opportunities for sailors and Marines; and digital modernization across the forces.

During the review, the acting secretary said leaders should identity low-priority, redundant or legacy programs that can be eliminated, reduced or restructured to meet the services' needs.

"We must find savings within the Department to reinvest in the kind of decisive naval force that will provide for our nation's future economic and political security," Modly added.

He also challenged the sea services to a bit of service rivalry in his memo, calling on the Navy and Marine Corps to beat the Army's recent budget cuts.

But the Navy Department cuts will more than triple the $13 billion the Army has trimmed from its budget over the next several years. Coined "Night Court" sessions, Army leaders have met after hours and aggressively moved money away from low-priority programs to fund readiness and modernization efforts.

Related: Army Releases Full List of 80 Programs it Plans to Kill or Trim Back

No portion of the Navy budget is exempt from scrutiny as part of the eight-week analysis, which Modly is calling the "stem-to-stern capability-based strategic review." But the acting secretary marked eight programs that should receive consideration as department leaders look for potential savings.

Some of the changes could include eliminating headquarters, commands or organizations; streamlining naval logistics; outsourcing some programs; consolidating training and installation management; and significantly cutting service-support contracts, among others.

Gilday, the Navy's top officer, said last month that the Navy Department would need a bigger slice of the Pentagon's budget if sailors and Marines are going to be called on to counter China in the Asia-Pacific region.

Splitting the budget equally between the Army, Navy and Air Force doesn't match the requirements of the National Defense Strategy, he added, which calls for a hefty naval presence.

"If you believe that we require overmatch in the maritime, if you believe that in order to execute distributed maritime operations and to operate forward in great numbers now -- that we need more iron -- then yes, we need more topline," Gilday said.

The Navy Department's 2021 budget request, which includes overseas contingency operations funds, totaled $161 billion, $2.9 billion less than last year's request. The overall Pentagon budget request for next year is $705 billion.

-- Gina Harkins can be reached at gina.harkins@military.com. Follow her on Twitter @ginaaharkins.

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