Archive for the 'budget' Tag

M/V Maersk Missouri underway in the Mediterranean Sea (photo LT Alex Smith)

M/V Maersk Missouri underway in the Mediterranean Sea (photo LT Alex Smith)

Every 22nd of May, unbeknownst to nearly all Americans, the United States celebrates National Maritime Day. It is a day to celebrate our nation’s rich maritime lineage, cherish our goods delivered by sea-going ships, and remember the importance of our officers and sailors who sail in the far-flung corners of the world. In Washington, D.C., the Department of Transportation held a ceremony at their headquarters. Salutes were smartly rendered and rousing speeches delivered. At the end of the ceremony, eight bells were rung to signify the end of the watch and honor the Merchant Marine.

The next day, Maritime Administration (MARAD) officials went back to regulating one of the most poorly funded (under $500 million annually) and misguided (only one top official is a past merchant mariner) administrations in our nation’s capitol. Since the founding days of our nation to the recent conflicts in the Middle East, the need for a strong militarily-useful and privately-owned U.S. flag merchant marine to protect, strengthen, and enhance our nation’s economic and military security has been clear. In times of peace and war, our U.S. flagged vessels effectively answered our nation’s call and provided unprecedented sealift capability to support our economy.

MARAD

MARAD

According to Rose George in Ninety-Nine Percent of Everything, trade carried by sea has grown fourfold since 1970 and is still growing. Three years ago, 360 commercial ports of the United States received in international goods worth $1.73 trillion. There are more than one hundred thousand ships at sea carrying all of the material we need to live.

Despite the amount of wealth reaching our shores, there are fewer than one hundred oceangoing U.S. flagged ships. Only 1 percent of trade at U.S. ports travels on an American-flagged vessels, and our fleet has declined by 80% since 1951. Less than 2% of all seagoing mariners are women. In a world of progressive ideology, it would seem that the other world – on the sea – is adrift and heading in the wrong direction.

It is seemingly unimaginable that most Americans are ignorant to the world of shipping. Play a game the next time you go out to a restaurant or visit your local coffee shop and see how many items you can count that came from a sea-going vessel.

  • Plates: Made in China, containership
  • T-Shirt on young child: Made in India, containership
  • Chair and table set: Looks expensive, but likely IKEA: containership
  • Gap Jeans: Made in Bangladesh, containership
  • Cell Phone: Made in China, containership
  • Coffee: Beans from Latin America, containership
  • European car parked outside window: German, roll-on roll-off ship
  • Fuel presumed in said European car: Crude from Middle East, tanker
Underway in the Suez Canal (photo LT Alex Smith)

Underway in the Suez Canal (photo LT Alex Smith)

The list is extensive. Better game: what was not brought over by maritime shipping?

Proceedings focuses mostly on developments in the maritime security domain, but a deeper conversation should revolve around the status of our civilian mariners. After all, one of our primary missions as sailors of the U.S. Navy or U.S. Coast Guard is to uphold the umbrella convention as mandated by the United Nations Convention on the Law of the Sea (UNCLOS). Even though the United States has not ratified the convention (we do not like its deep-sea mining stipulations), we uphold its core meaning. Over 300 articles aim to create “a legal order for the seas and oceans which will facilitate international communication, and will promote the peaceful uses of the seas and oceans, the equitable and efficient utilization of their resources, the conservation of their living resources, and the study, protection and preservation of the marine environment.”

Simply put, our maritime security organizations exist to support the global merchant marine and to promote free trade domestically and abroad. But when we lose American flagged vessels and shipyard workers lose their contracts, their income and their wealth of knowledge is lost. For our government – and in particular the Department of Transportation and Department of Defense – this means that an insufficient number of American mariners will no longer be there to support the industry. The next time we need to support a global war, we will have to rely on foreign shipping companies to move U.S. war material abroad.

RECOMMENDATIONS

  • Outside thinking. Fund and stand up an independent, outside think tank that can meet the maritime challenges of the 21st If we do not try and sort out the maritime industry, the stability necessary for U.S. flag companies to attract the investments they need and for maritime labor to recruit and retain the mariner our country needs will simply not be there. Create a long term
  • Bi-Partisan Support. MARAD should continue to lobby and build coalitions to ensure proper funding efforts to build a robust, seagoing merchant marine. If the United States is serious about the declining state of our maritime industry, we must modify existing programs and create new ones that would increase the number of vessels operating under the U.S. flag, the amount of cargo carried by U.S. flag vessels, and the shipboard employment opportunities for licensed and unlicensed merchant mariners.
  • Reward companies that flag their vessels under the United States. Under the auspices of the intricately elusive tool of “flag of convenience,” where ships can fly the flag of a state that has nothing to do with its owner, cargo, crew or route, many shipping companies have chose to dodge taxes and pay mariners less. Consequently, many civilian mariners can’t find work. We should create tax incentives for companies that fly under the American flag and hire more mariners, rather than allow ships that maintain a crew of twenty to reap in the benefits of maritime trade.
  • Subsidize shipbuilding in the United States. In order to compete with South Korea and other major shipbuilding nations that construct vessels on the cheap, we need to craft private-public contracts to allow our shipbuilding to flourish. Explore new ways to meet the capability and capacity to meet the most demanding wartime scenarios that might lie on the horizon.
  • Rethink maritime officer and crew placement. Even though ships are getting considerably larger, crew sizes are getting smaller. Nearly a thousand professional mariners graduate from the US Merchant Marine Academy and state maritime academies each year with no prospective deep-sea job opportunities. Most sea-going accidents occur due to fatigue and most mariners have reported working over 80 hours in a given week. We should expand Military Sealift Command employment so U.S. Naval Reserve / Merchant Marine Reserve can serve on ‘active duty’ in the merchant marine. If this model works, we can incentivize a program in the private sector where larger crews are rewarded with tax breaks for operating safely.

Trade has always traveled and the world will continue to trade in our globalized society. The United States relies on a few VLCCs (Very Large Crude Carriers) to bring in two-thirds of our oil supply every day. Without the assured commercial sea power capability provided by the U.S. flag merchant marine and civilian manpower, we will find ourselves at the mercy of foreign vessels that are owned and operated by foreign interests.

The symbolic ringing of eight bells was superfluous this past National Maritime Day. Through bad policies over the last several decades, we have left the U.S. maritime industry at the whim of Adam Smith’s ‘invisible hand,’ then wondered, what happened to the Merchant Marine? Answer: it was turned over decades ago to the rest of the world.

You have been properly relieved America. Maersk has the watch.



seacontrol1Matt and Chris wax on about the new budget deal and military benefits before finally discussing the incident between the Chinese and American navies, the Pacific balance, robotics, and books for the holidays. Remember to tell a friend and subscribe on Itunes or Stitcher Stream Radio. Leave a rating and a comment. Enjoy, Episode 13 of Sea Control, The Queen’s Shilling (download).



CDR Salamander joins Matt and Grant for a podcast on writing as a member of the military, anonymity, and some sacred cows military planners hold dear: benefits, high-end systems, equal budgeting, etc… Join us for Episode 8, Sacred Cows and Amphibians (Download).

Articles from Sacred Cows Week:
Quantity over Quality (Michael Madrid)
Holy Bovine, Batman! Sacred Sailors! (Matt McLaughlin)
American Defense Policy: 8 Reality Checks (Martin Skold)
Ain’t Ready for Marines Yet? The Sacred Cow of British Army Organization (Alex Blackford)
SSBN(X): Sacred Cow for a Reason (Grant Greenwell)
Why the United States Should Merge Its Ground Forces (Jeong Lee)
Sacred Cow: Military Pay and Benefits By the Numbers (Richard Mosier)

Sea Control comes out every Monday. Don’t forget to subscribe on Itunes and Xbox Music!



“Gentlemen, we have run out of money. Now we have to think.”
– Winston Churchill, British Prime Minister

While the details of the budget cuts are still being debated, one thing is clear: the Department of Defense will face significant fiscal austerity. Accordingly, the Navy will face drastic cuts that mandate a reexamination of the way we do business.

Viewed another way, however, we are being presented with the opportunity to rethink the standard business rules governing the way we train, fight and prepare for future challenges – we should examine the best, most innovative ways to accomplish our strategic objectives. Given the tough budget and strategic challenges we are facing, “business as usual” just won’t work any more.

The surface fleet will be particularly hard hit. Surface ships will almost certainly see underway time for training and readiness cut. Deployments to engage in regions such as Central and South America are being curtailed. These decisions risk sending the message to our allies that we are no longer forward and present in the Central and South American region where we have provided a maritime presence for well over a century.

Read the rest of this entry »



Yesterday President Obama released his proposed Fiscal Year 2014 budget to Congress with the intent of adding to the reduction of the federal deficit to the tune of $4 trillion. However, to achieve this the government will make further cuts to the spending habits of past and rethink when and where the spending should be done in the future.

However, as I’m a proponent for the Coast Guard I went into the proposed budget looking for what might be heading our way in terms of cuts (or additions?). We’re currently already in the midst of sequestration which slashed funding across the board as a means to save the government funds. What else could there be?

Overall the reduction to funding, though not directly established for the Coast Guard, has been proposed for DHS at large. The proposal calls for a decrease of 1.5 percent, or $615 million, below the 2012 enacted level. In the grand plan that’s not all that much. On the same note the budget cites a $1.8 billion savings across the entire department.

The Coast Guard is only mentioned a measly two time in the cuts and savings plan. I look at this as a good thing. Here they are:

Pollution Response:

  • It seems a little soon for people to forget that the Coast Guard, among others, recently undertook the massive response to the Deepwater Horizon oil spill; however, in reading, it seems some may have.In a proposed cut to the EPA (CUTS: SUPERFUND SUPPORT TO OTHER FEDERAL AGENCIES Environmental Protection Agency) it’s requested to drop an annual $6 million transfer of funds to their Hazardous Substance Superfund account. From that inject the Coast Guard annually receives $4.5 million. These are the fund that the Coast Guard uses to respond to oil drums and substances of an unknown type (excluding known oil spills and the like- those use the Oil Spill Liability Trust Fund).

    Reading further into the justification you’ll see “…impacts to USCG, NOAA, and DOI should be minimal due to mission-specific funding within those agencies and the continued ability to enter into interagency agreements to fund specific support taskings.” Though I’m not up-n-up on all the legal mumbo-jumbo I wonder how this would work. The Coast Guard, by law, uses different funding streams for different incidents (or potential incidents) thus if the funding for the Superfund is cut it begs the question to who will fund it. I suppose that the Coast Guard could inject their own funding but then we’re adding another $4.5 million to operational spending that we currently don’t budget for annually.

Aviation:

  • This is a cost saving measure as opposed to a drop in funding; nonetheless, it seems like it wasn’t thought through all the way. Though in theory the proposal of SAVINGS: SHARING EXCESS AVIATION EQUIPMENT seems like a good idea I question the long-term benefits.The measure calls for the CG and CPB to share equipment in the aviation sector as it pertains to the CG’s HU-25 Falcons and the CBP’s MX-15 sensor packages. In short, as we decommission our Falcons (17 of them in 2015) we’ll be giving CBP the radar systems (they already use them) and we’re going to use the already established maintenance system from CBP on our MX-15 sensors. It’s supposed to save $20 million between now and 2016.

    The issue I have, though it won’t really mean anything to the Coast Guard, is that the systems we’ll be giving to CBP will be (are?) obsolete by the time they’ll get to use them in 2016. But, that’s just my opinion.

Do you have anything to say on the subject?



As the budget cuts kick in – I’m having a few flashbacks to the 1990s “peace dividend” era. The key to getting through this process is communication. It takes away some of the uncertainty, and in a way it focuses attention to priorities. It is always interesting, and instructive, to see how different organizations start the process of thinking about what should and should not get the cut.

Via the SalamanderUnderground, the following notes from a Chief of Naval Personnel recent all-hands call is helpful, and adds a bit to Ryan’s post from the 21st.

VADM Van Buskirk’s MT&E priorities are to STABILIZE (at 320,000 personnel), BALANCE (overmanned and undermanned ratings) and DISTRIBUTE (between sea and shore) the workforce. Sailors need to be ASSIGNABLE, DEPLOYABLE and DISTRIBUTABLE in order to meet the Chief of Naval Operations tenets to be WARFIGHTERS FIRST, OPERATE FORWARD and BE READY.

In order to meet these goals, his emphasis is to attack undermanned ratings and increase the quality of recruits as currently evident on entry level exam scores. Quality of recruits is key to keep apprised and abreast of technological changes. He noted that Perform to Serve (PTS) is at 90 percent acceptable in-rate quotas with averages at over 95 percent over the last four months. Retention is historically high but a continued focus is on resiliency of the force. He indicated continued FY funding for sailor support and family readiness programs.

Q&A session discussion included impact of sequestration/CR regarding as well as the following topics:

– USN continuation of tuition assistance (TA) through this FY (all other Services have curtailed this benefit). 45 thousand sailors are recipients of TA with over 90 percent receiving degrees.

– Possible changes in advancement to include consideration of multiple scores such as sea duty.

– Priority of Cyber training but fiscal pressures including civilian furloughs may slow training pipelines.

– Attack undermanned rates with new accessions. YTD have had 41,000 new accessions. Previous years were approximately 35,000-37,000. Looking at a summer surge of recruits.

– Provision of health care with possible civilian furloughs requiring referrals to civilian specialists in town. Possible contributory payments for pharmacy co-pays and increased retiree payment for Tricare for Life.

– Discussion of option to obtain NECs on-line leveraging technology for training. Limitations include current training infrastructure and classification limitations.

– Active duty IAs (except for specific specialties such as dog handling) will be transferred to reserve component. Expect closure of Gulfport MS and other IA training centers.

– STA-21 IW program closed this year. Accession options adjusted based on ROTC, OCS and related accession pipelines. Look for adjustments in future cycles.

– Number one priority is stabilizing the work force ensuring proper distribution and balance. Cross deck sailors may receive special pays and other incentives.

This is going on throughout the Navy and other services. As budgets continue to contract, expect to see more and more of this.

Priorities; time to rack-n-stack ‘em.



History shows that the national mood determines spending priorities as much if not more than even economic needs. In a representative republic, our elected officials respond to the mood and desires of their constituents in fits and starts – but usually head in that direction.

If you are making long-range plans, like military budgets and systems development, to avoid spending time and money on systems that Congress or a future Pentagon will never support for production – because they don’t meet the mood and direction the nation is going – you need to make sure you can see the big picture.

To do that, you need to make sure you are not stuck in either group-think in your small circle, or worse than that – have tunnel vision such that you are unaware of what is going on around you.

A nation and a society can often have trouble with self-reflection. In the national security arena, a professional must make the effort to read widely and deeply; seeking out not just like-minded ideas, but even more importantly contrary ideas. Better than that, make an effort to read foreign sources of opinion and analysis.

Where do you look? Well, if you want to get an outsider’s view, the Anglophere-centric The Economist is good. The English version of Der Spiegel works. The major British papers and their English language counterparts from Japan, Singapore, Al-Jazeera works too. Everyone finds their mix.

There is no nation that is more like the United States – and therefor more likely to pick up our nuanced trends – than our friends to the north, Canada. Some don’t really “get” us – but our fellow North Americans usually do.

You could do worse than to take the time to listen to a relatively objective opinion from a friend. The Canadian Conference of Defence Associations Institute (a non-partisan think-tank) has its strategic assessment out. It is well worth your time to read the whole thing, but the opening section on the United States has an interesting hook;

Americans are war-weary, disappointed with what has been achieved at great expense, and feeling exploited by ungrateful allies. Debate is intensifying over how national interests should be defined and the degree to which the security of Americans requires expenditure of lives and treasure in faraway places. There is a rising mood of disengagement which will translate into actual disengagement in selected areas no longer deemed to be in the national interest.

There will be no going back to Iraq whatever happens and 2012 will feature continued drawdown of US forces and involvement in Afghanistan. The Administration will find it very difficult to send forces anywhere in 2012 unless the security interests of the United States or those of its closest friends and allies are openly threatened or humanitarian needs are overwhelming. With the economy improving but remaining fragile, the United States would be hard pressed to finance or gain public support for any new foreign policy or defence initiative not directly in support of the supreme interests of the country.

In the event Washington cannot avoid sending forces into harm’s way in 2012, there is every indication the Pentagon would want any engagement to be short and sharp, with objectives which are as narrow and clearly defined as possible, and with little or no chance of stretching into a lengthy and complex intervention of the type which characterized the Iraq and Afghanistan campaigns. One should expect the Administration’s posture to prefer persuasion over force and, when diplomacy and sanctions fail, to favour the employment of military force with as much precision as possible.

If they are correct – what are the implications for the defense budget and the Navy-Marine Corps team? Are we training and equipping our forces to be ready for this in a shrinking resource environment? Are we adjusting our manpower allocations to ensure that the “high-demand-low-density” assets will be there in the right amount, or will they be put under the same haircut as everyone else?

If the American public’s mood continues along these lines – are we being realistic on what kind of budget we will have in 10-years? Are we being too optimistic, too pessimistic – or just about right?

Having served with the Canadian forces, have Canadian friends, and heck – even took the family to Canada for our summer vacation last year, I admit to being a Canadaphile – as a result, agree or disagree, I always give them a good listen.

This time, I think they about nailed it.

Hat tip T.E. Ricks.



With some of the budget reduction POM options coming to the front over the last couple of weeks, everyone’s Fleet-number waterfall graph just shifted to the left a few years. A quick note to those blandly blinking at the PPT; this is not a drill.

It is time to leave behind the sway-back, hidebound arguments and talking points of the Lost Decade; FRP, Optimal Manning, Transformation, exquisite systems, Network-Centric Unicorn Theory – that is in the past. The future, if you will, that never was.

They have either been measured and found wanting, abandoned, unaffordable, or perpetually shifted to the right waiting for quantum theory and pixie dust to make them operational. It is time to move forward.

One underlying fact that has finally reached the 51% tipping point in the minds of most decision makers in the last 18-months is this; in time of financial crisis the military budget will be hit harder than other parts of the budget if for no other reason than it is structurally easier for politicians to do so. With our new “Super Committee” process – even more so.

Relax; there is no need to panic. No need to wear sack cloth and ashes, bound with your full-leg metal cilices as you walk off the Blue Line, through Pentagon Station to your desk. No; it is time to straighten your gig-line, lean forward, walk with purpose to get your next cup of coffee, put a smile on your face, and get to work.

Look at what has been done by our predecessors in a time of stress; naval developments in the 1920s and 1930s in carrier and cruisers; even the 1970s, more or less, brought us the F-16, TLAM, Aegis and others.

This is a time to focus. We can come out of this period – be it 10 years or 20, in a good position if we start now to look; look not just at platforms, but what those platforms carry. Sensors, weapons, leaders, Sailors, and ideas. That is what is critical. Don’t get me wrong – numbers matter for a dual-ocean, maritime, mercantile republic with global responsibilities – but what is on those platforms is more important than just numbers.

To do this right though, we need vision and leadership grounded in fact, modesty, honesty, and respect for risk. Not just that, but in our age it needs to be public vision and public leadership. The time is now to look back for a firm grip on something firm, solid, and reliable – and then reach forward.

A great worry however, is that we won’t benchmark the successful responses to stress in the past clearly founded on solid programs and viable short-cycle evolutionary progresses, but instead will follow the intellectually moribund and disgraced habits of the other past as defined by a future-imperfect PPT deep and an efficiency plan as thoughtful as, “Everyone grab your spoon and take two scoops our of your rice bowl.”

Simple reductions of what we have without vision and an understanding of a strategy to support it is not a plan, it is a reaction. It is drift; drift in rapidly shoaling water.



Dig down in the comments on another post and you’ll find some strong arguments being made for drastic cuts in the Navy and other services to help improve America’s balance sheet for the long haul. Clearly, restoring the health of the economy is a national security issue, but reports on the economy are vulnerable to hyperbole and predictions on how long the current downturn will last vary.

While the economy is in fact weak, in an environment where bad economic news makes good headlines, sells newspaper and drives traffic to media outlets, and economic issues and proposed remedies are highly politicized, it is challenging to objectively weigh economic issues against other national security issues. Unemployment is rising, several major industries are in genuine crisis and consumer confidence is low, but many of the key metrics grabbing headlines have been worse in the post-Depression period, yet did not require massive government intervention or austerity measures to correct. The less politicized economists seem to be predicting the recession will last another 12-18 months, with a few predicting as long as 24-36 months.

We also appear to be seeing a rebalancing in security challenges. The war in Iraq is drawing down, and while resources must be shifted from Iraq to Afghanistan, it’s not unreasonable to believe America’s commitments to “boots on the ground” in far away lands will decrease on the order of 30 to 50 thousand troops over the next two years. Meanwhile, maritime challenges are on the upswing and global maritime presence and engagement is becoming a more pressing requirement to maintain the free flow of trade and regional stability.

So, given the situation America faces at home and abroad, three questions come to mind:

  1. Are the current economic problems significant enough to make the economy America’s #1 security problem and warrant substantial reductions in defense spending?
  2. Does the current plan to build the end strength of the Army and Marine Corps need to be reconsidered?
  3. Should defense dollars be reallocated among the services to give higher priority to resurgent naval threats and maritime security initiatives?

What say you?

[Update1] Looks like somebody at CBO may already be saying “yes” to question #2:

The Congressional Budget Office prepared some budget alternatives for Congress to deal with defense budget shortfalls.

The alternative budget…proposes increasing enrollment fees and copayments for military retirees using the defense health care system and a reduction in Army and Marine Corps personnel.



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