Mr. Chairman, the Congressional Budget Office (CBO) appreciates the opportunity to testify today on the costs of attaining and sustaining the 600- ship Navy. When the current Administration assumed office in January 1981, it established the objective of building up the total number of the Navy's 'battle force' ships to over 600 by the end of the 1980s. This numerical goal was a shorthand for more specific force structure and modernization goals, such as increasing deployable carrier battle groups from 12 to 15 -- with a comparable increase in aircraft to fly from these carriers -- and expanding the number of nuclear attack submarines. The ensuing expansion has raised concerns about the budgetary implications of attaining and maintaining such a force, and the concerns could be well-founded. From 1980 through 1985, the Navy's total budget grew at a real (that is, inflation adjusted) rate of 7.5 percent a year. Over the next decade, CBO estimates that the Navy's budget would have to increase at a real rate of between about 3 percent and 5 percent a year to meet all of the Navy's goals. Such sustained growth, while clearly not impossible, would be unprecedented in peacetime and, in constant dollars, would lead to a doubling of the Navy budget between 1980 and 1994. My testimony today will first describe CBO's projections of budgets needed to meet current Navy goals. These projections are contained in CBO's just released study entitled 'Future Budget Requirements for the 600-Ship Navy.' Then I will outline several strategies that accommodate lower growth in the Navy's budget, should the Congress find that necessary. Each of these strategies, however, would provide a different Navy and, quite possibly, one that is less capable than the version currently planned.


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