I appreciate the opportunity to testify today about the Navy's budgetary requirements, particularly its long-term requirements. There is, of course, great uncertainty about the nature of future threats to U.S. security, and hence about the size and nature of the Navy that this country will require. There is also great uncertainty about how much money will be available to buy and operate Navy ships and aircraft, particularly in the years beyond 1995. In the face of these major uncertainties, this testimony considers a wide range of possible naval forces, including the Administration's planned forces as well as alternatives that vary in their emphasis on key Navy missions. The testimony concentrates on the issue of long-term affordability, though it also discusses the effectiveness of alternative naval forces. Ships are the focus of the discussion, but the testimony also considers naval aviation. CBO's analysis reaches several broad conclusions: (1) Though the Navy's real budget levels would decline through 1995 under the Administration plan, in the 15 years after 1995 budgets would have to increase by between about 1 percent and 3 percent a year to maintain the Administration's planned forces, leaving the total budget in 2010 higher by between $11 billion and $55 billion than in 1995; (2) The wide range of cost increases primarily reflects uncertainty about the future cost of weapons, with the higher estimates being most consistent with past experience; and (3) If Navy budgets beyond 1995 were kept constant in real terms, the service might be forced to reduce its fleet from the planned 1995 level of about 450 ships to no more than 310 ships (including 9 aircraft carriers) and to equip the carriers with only a small number of the most capable aircraft.


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