Podcast on Budget issues and GOP Defense Policy

I recorded a podcast at Ace Of Spades HQ last night about the Defense Budget and some of the issues splitting the GOP.

WARNING:  This is a good dose of politics here. Please don't listen if that bothers you.  Don't even click the link.

It's about thirty minutes long.

Bryan McGrath

Fact Check: John McCain vs Bob Work

Photo by: Jacquelyn Martin

As Bryan also discussed tonight, John McCain and Bob Work had a nice little exchange today in the Senate during today's nomination hearing. There are several things going on here, but like Bryan I don't see any scenario where Bob Work has his nomination blocked by John McCain very long, particularly if someone in the mainstream press decides to do even basic fact checking.

As everyone knows, I have been and remain a very strong supporter of the Littoral Combat Ship program. My argument since late 2008, when I spent 3 nights aboard USS Freedom walking through the ship with very smart folks thinking about what the Navy is doing with the Littoral Combat Ship program, has been that the naval warfare theories found in the concept of LCS will heavily influence surface warfare in the 21st century. I still believe that to be true.

To date, USS Freedom has yet to do anything that can be described as anything other than an activity designed for domestic political purposes. Whether it was the tour of ports across the US prior to being commissioned, the short patrol off the US southern coast, the deployment to Singapore, and even the response to the recent tsunami in the Philippines - USS Freedom has basically proven to be an operational lemon and a political flop.

But that doesn't surprise anyone paying attention to the LCS program, because all LCS observers have seen how the Navy has had to slap on one change after another to put the ship to sea, only to frequently see the ship limp back to port. It is a first in class lemon paid for by R&D funding, forced into operation too quickly for purposes of being tested by fire only to see the Navy burned every time. So the first ship, redesigned after construction begun, is a lemon. No shipbuilder - even those at Lockheed Martin - are surprised by that reality. The only real surprise with LCS to date is that USS Independence - the Austal version first in class - apparently isn't a lemon also.

But the Navy put their lemon out there, tried to make lemonade, and so far it looks more like dog urine. Worth a try? Maybe? I honestly don't know, time will tell. The question is, does anyone honestly believe the rest of the Lockheed Martin LCS class is going to be a lemon too? I don't. It is also important to contrast all the publicity of USS Freedom with the complete absence of publicity for USS Independence. I do not mean to imply the LCS will be some great class of ship by itself, rather I do strongly believe the impact that LCS will have on surface warfare is going to be very positive for that community long term.

Despite all the news you may be reading right now, to me I am thinking 2014 is the turning point for the entire Littoral Combat Ship program, and thanks to John McCain's circus in the Senate, people might finally realize it as new events start unfolding. The conversation has, almost entirely, been what the ship presumably can't do. The conversation, very soon, will transition into what the Littoral Combat Ship is doing. For the past 15 ship classes (mentioned below), that simple transition has made a lot of difference in how people looked at ships that couldn't meet early cost estimates.

When Talking Points Fail

John McCain is one of the best in Washington, DC when it comes to complaining as loud as possible about unpopular defense programs. Unfortunately he complains so much about what he is against, no one knows what he is actually for anymore when it comes to defense. Today the Senator made a big scene, and as long as no one actually fact checks what he said, he might not take a hit for the magnitude by which he was completely wrong today... again, and again, and again. This is what I like to call terrible preparation and staff work by a Senator and his office.

John McCain: Mr. Work, as a former Navy Undersecretary you wrote a very candid paper about the Littoral Combat Ship program. I have a memorandum from Secretary Hagel to the Chief of Naval Operations, I don't know if you are aware of it or not, he says "Therefore no new contract negotiations beyond 32 ships will go forward" talking about the Littoral Combat Ship. Do you agree with that assessment?

Bob Work: As I understand it, what the assessment is saying is we will stop building the Flight 0+ LCS at 32 ships and we will consider follow-on ships - small combatants - a modified LCS could be one of the options, a domestic or foreign design could be one of the options, so I think this is very normal with Navy shipbuilding. We build Flights...

John McCain: You think it's normal? You think it's normal that the cost overruns associated with this ship? The fact that we don't even know what the mission is, that there has not been a, this whole idea of moving different modules off and on? You disagree with the Government Accountability Office statement about the cost overruns? This is normal Mr. Work?

Two things here. First, LCS is not being cancelled like Senator McCain is suggesting, rather the Senator's staff isn't smart enough to realize this is what down-select for the LCS looks like. Hagel is basically reintroducing competition back into the LCS program while building upon lessons learned from the first Block 0+ ships. Yeah, someone is going to offer up some incredibly expensive FFG in the analysis of alternatives, but don't bite the hook, rather expect the winner to be a Block I LCS based on one of the two designs, but the Block I will add firepower while keeping to some of the core concepts of the original LCS... that's where this is really heading.

Second, did Senator McCain really ask if cost overruns are "normal" three times?

Of the nine first in class ships previous to LCS, four had overruns of greater than 100% (Avenger class, Osprey class, Arleigh Burke class, San Antonio class), three had overruns between 40-60% (Oliver Hazard Perry class, Ticonderoga class, Whidbey Island class). Only two had overruns less than 20% (Wasp class and Virginia class). NONE came in lower than expected. Now, if we also count the Seawolf class, the America class, the Zumwalt class, the Ford class, and throw in Independence and Freedom as unique classes of ships...

The last 15 classes of US Navy ships have started out with cost overrun problems. For the entire career of John McCain as a Senator, this has been normal by any definition of the word. John McCain is either the most remarkably ignorant Senator on Navy shipbuilding issues in US history, or he's intentionally acting like a clown. I'll let you decide.

Bob Work: Well sir, up until 2007, 2008, 2009 when the program almost imploded there were significant cost overruns. When Secretary Mabus, Secretary Stackley, and I arrived in the Department of the Navy in 2009 - I believe since then the program has met it's cost targets. In 2001 the guidance to the Department of the Navy was to be able to build 3 LCS's for the price of one Arleigh Burke. The Department of the Navy is doing that, today. So I think you have to look at the performance of...

John McCain: So it makes it hard to understand why Secretary Hagel would, when the original plans as presented to Congress for their approval was 52 ships. And by the way, was anyone ever held responsible for these failures 2007, 2008, 2009, 2010?

Bob Work: Those happened in the administration prior to ours so I don't know what... 

How many folks involved in the Littoral Combat Ship program from 2005 - 2008 have been nominated and approved by Senator McCain to become a Flag Officer? The only person in this conversation who was legitimately in a position to hold people accountable for failures in the LCS program was Senator John McCain. The only person in this conversation whose record reflects a positive contribution to the Littoral Combat Ship program problems is Bob Work.

Senator McCain, your music is playing.

John McCain: So everything has been fine under this administration as far as the LCS is concerned?

Bob Work: I believe that the program is on solid ground and is meeting its cost targets, yes sir.

John McCain: You do believe that?

Bob Work: Yes sir.

John McCain: So you are in direct contradiction of the Government Accountability Office study of 2013.

Bob Work: I haven't read that particular uh....

John McCain: You haven't read it?

Bob Work: No sir. 

Like Bob Work, I was guilty of not reading the full US Government Accountability Office study of the Littoral Combat Ship from July of 2013. I read the highlight page back when it was released, then shrugged and went on to do more important things. No matter how John McCain tries to spin it, the GAO report isn't in direct contradiction of anything Bob Work said, indeed the report highlight page starts by saying:

GAO found that the Navy has made progress in addressing some of the early design and construction problems on the LCS 1 and LCS 2 seaframes, and quality defects and unit costs are declining, now that the seaframes are in steady production. Based on projected learning curves, shipyard performance can be expected to continue to improve over time.

I went ahead and read the entire GAO report because Senator McCain made it sound like the report says something incredibly important, but I could never could find where the report contradicts what Bob Work said, indeed it basically answers Senator McCain's question by suggesting that the Littoral Combat Ship is doing much better under the current administration.

Hmm...

John McCain: Wow... uhm... I'm stunned that you haven't. But the fact is that the ship has still not, uh, had a clear, uh, mission. The modules that were supposed to be moving back and forth have not, uh, we have not persued the fly before you buy, uh, uh, policy. And, uhm.. Do you remember the original cost estimate for the LCS?

Bob Work: It was $220 million for the sea frame Senator, and depending on the number of modules that you would buy the total cost for a missionized LCS, average cost was supposed to be no more than $400 million in FY2005 dollars.

John McCain: And what is it now?

Bob Work: I think, I haven't been briefed on the most recent cost - I'll do that if confirmed and look at it but I know that we are on track...

John McCain: Thank you for doing that, what's the cost now? You don't even know the cost now Mr. Work?

Bob Work: I believe the average cost with modules is about $450 million but not in FY2005 dollars, two thousand five dollars. So if you take a look at the original costing factors, I believe the cost of today's LCS's are very close to the costs that were set back in 2002-2003.

Senator McCain, no one outside the DoD has the real cost of LCS sir, because the cost of the modules has not been released publicly.  Why would Bob Work know the cost of LCS considering he hasn't been in government service for almost a year?

We all have different 'unofficial' estimated numbers for the Littoral Combat Ship seaframe and modules. I have mine, and Bob Work probably has better numbers than mine. To protect my sources I will not detail mine exactly, but generally as of FY2014 I have the Littoral Combat Ship plus the average cost of one mission module costing around $548 million, which is $421 million in FY2005 dollars. Now, without going into too much detail, allow me to provide some insight into those numbers. The primary reason why the average cost of the Littoral Combat Ship is more than $400 million in FY2005 dollars is because the MIW module is incredibly expensive, indeed I believe the very high cost of the MIW module is why the LCS modules are yet to be released in the SAR. Once we see the module numbers in the SAR, we will all have a much better idea of how much LCS really costs.

But here is the rub... even if the LCS went away, the one part of the entire LCS program the Navy will keep under any circumstances is the Mine Warfare Module. It is the most desired piece of the entire program, so that cost is going to exist with or without the LCS.

And yes, if I replace the 24 MIW modules with 12 ASuW and 12 ASW modules based on the numbers I have, and applied the average, the LCS cost in FY2014 dollars is less than $400 million FY2005 dollars. Expect the MIW module to cost in the neighborhood of $70 - $80 million per module when the SAR finally reveals the cost. As we already know, mine warfare is very expensive.

John McCain: Well given that then it is hard to understand why the Secretary of Defense would curtail the production of it by some 24 ships, so Mr. Work every objective study whether it be the Director of Operational Test and Evaluation, the Government Accountability Office, every other objective observer the LCS is not anywhere near what it was presented to the Congress by funding and this again makes me wonder about your qualifications because the one thing that we are plagued with is significant cost overruns and lack of capability.

John McCain's staff failed him today, because they forgot to update all the old talking points and forced John McCain to say a lot of inaccurate things about LCS in an attempt to stick it to Bob Work, stuff that was very much once true but today is clearly not. The Senator's implication regarding the cost of LCS is wrong, and I'm struggling to find all these objective observers saying otherwise today, because even the GAO in the July 2013 report the Senator claims to be citing concedes the cost of LCS is no longer the programs problem. Now maybe the Senator disagrees, but $421 million in FY2005 dollars appears to me to be pretty close to $400 million in FY2005 dollars, in fact the cost of LCS today is a lot closer to the original estimate than I think every reasonable observer would have ever believed possible back in 2007-2008 when the Navy was ceasing construction of ships in both shipyards.

Senator John McCain today is attempting to publicly slap Bob Work with the LCS program, which makes no sense because every data point suggests Bob Work was part of a team that took a really bad LCS program suffering from enormous cost problems, and clearly turned it around and got it back on track. If the Senator will publicly attack people who do a good job, and the same Senator voted affirmative for promotions to Navy officers who were directly involved in the problems of LCS, the Senator is hardly qualified to pass on judgment regarding qualifications, because the Senator is the one demonstrating clear lack of good judgment.

In hindsight, I find the whole thing sad. Bob Work might legitimately be the nations top civilian strategic thinker on defense issues since the cold war, and John McCain - who some consider to be the nations top defense Senator - has clearly gone off the deep end into the land of crazy nonsense. As soon as Senator John McCain realizes his staff let him down big time today, that the Senator is on the wrong side of the facts he argued, and assuming his ego allows the Senator to concede he made a mistake....

Bob Work will be the next Deputy Secretary of Defense.

As for that whole New Hampshire BRAC thing that happened today... either the Portsmouth Shipyard folks honestly believe they are in trouble keeping the yard open, or that was the Joint Strike Fighter lobby nervous as hell about Bob Work's appointment.

Something to keep an eye on.

John McCain Puts a "Hold" on Bob Work

Today's confirmation hearing for Bob Work (and others) got a little fiery, and now Senator John McCain (R-AZ) has decided to place a "hold" on Work's nomination.  This is a Senatorial privilege which, if it were to disappear, would not bother me.  My understanding of recent Senate rules changes leads me to believe that Mr. Work's assumption of office, while likely to be somewhat delayed, is not in jeopardy.

Senator McCain's dissatisfaction springs from his long standing animus toward the LCS, something Mr. Work has become known widely as a champion for.  Having been effectively boxed in by Secretary Hagel's announcement of the LCS buy being truncated at 32 (from 52) yesterday, Work was then in the unenviable position of having to defend an Administration position with which he has by all appearances, been at odds.

Both Senator McCain and Mr. Work have facts on their side, but Work's are more recent and more relevant.  Yes, the LCS had a number of cost overruns and was not an effectively managed acquisition program--but to their great credit, the Obama team at Navy made a number of decisions that dramatically improved the cost situation.  I have had many, many disagreements with Bob Work and his former boss Secretary Mabus, but one only has to go back and look at Navy shipbuilding in the second Bush term to see that shipbuilding was NOT a priority, and it was in deep trouble.  Mabus, Work and Sean Stackley got things moving again, and they did so with cost effectiveness at the heart of their efforts.

Senator McCain seems to have been troubled that Mr. Work had not read a 2013 GAO report on LCS, and all things considered, Work probably should have had some familiarity with it, if for no other reason that it is common knowledge that Senator McCain does not like LCS, Bob Work does, and McCain has a seat on his nominating committee.  That said, Senator McCain's demeanor and approach in the hearing today bespoke petty score settling, and his suggestion that Work may not be qualified for the post of Deputy Secretary of Defense is just silly.

Bob Work is singularly qualified for the job and the facts are on his side with respect to LCS cost containment.  Senator McCain's hold is inappropriate.

Strike that, maybe Senator McCain is right, in a way.  Work may not be qualified to be Deputy Secretary, because if anything, he is over-qualified, especially in view of the skills and performance of his soon to be boss.

Bryan McGrath

Musings on the Hagel Budget

The Secretary of Defense spoke today previewing the 2015 Defense Budget, the first produced under his leadership.  It is the defense budget of a declining power, and it represents the triumph of bureaucracy, provincialism, and gridlock.  Much of it is wishful thinking, some of it is useful thinking, and some of it is a failure of thinking.  But friends, I wish I could say that we deserve better.  But we don't.  All levels of the process are failing.

The President is failing because he has not set a national security agenda, he has not described his vision of America's place in the world, he has not treated national security issues with the attention they deserve, and he has not worked with Congress to solve tough problems and disagreements.  His Secretary of Defense goes before the country and laments the difference between the Bipartisan Budget Act and the President's 2014 Budget Submission, never once mentioning that the PB 2014 submission ignored the Sequester that his staff conjured and that he signed.  The Sequester that looms again in 2016.  His 2012 Defense Strategic Guidance had a very limited half-life, as the ongoing Quadrennial Defense Review and the Strategic Choices Management Review which predetermined preceded it appear to have made it irrelevant.  He has managed foreign and defense policy from the perspective of someone who simply wanted it not to get in the way of his more important legacies, and his indifference has weakened our influence around the world.

Congress is failing because it is a generally speaking, a confederation of cowards and provincials, incapable of seeing beyond narrowly defined local interests and terrified of special interests.  A pox upon both parties, as the inability to see the need to shed excess infrastructure knows no party bounds, nor does the inability to face down the Veteran lobby adhere to a single ideology. Some of my friends in the Republican Party have forgotten how national defense has defined us and instead, see defense simply as one more ledger to shave rather than as their most sacred duty.  Their mania to cut spending has become an end unto itself, rather than a means to attain other policy goals.  A unified and coherent Republican Party could have proven a more worthy negotiating partner to the President, but in our division lay his strength and our dysfunction.  The Sequester may have been hatched in the White House, but it was nested in a large part of the House Republican Caucus.  Neo-isolationism is on the rise on both the Left and the Right, and the abiding national security consensus has broken down.  It is likely that it will someday be remade, but only after a great tragedy precipitates it.

The leadership of the armed forces is failing, because no one is willing to speak plainly, to say what they really think and then let the chips fall where they may.  I think I see a glimmer of hope in the Chief of Staff of the Army, but this is only because his service is under the most pressure.  Being cut less than others is the new measure of effectiveness in the Pentagon.  I have yet to hear of a Service Chief going before the veterans groups and telling them that their lobbying and their intractability is creating hollowness in the active force.  I have yet to hear a Service Chief go before Congress and tell them that their provincialism and their intractability saddles him with excess capacity,  that he now must seek to compensate for in reducing benefits to the active force.  I have not heard a Service Chief go before Congress and tell them plainly that their unwillingness to touch large portions of the defense budget is rapidly hollowing the military and rendering our country less secure.  Our military culture does not seem to value the concept of resignation on matters of principle; perhaps the nation would be better off if it did. 

On issues closer to my own interest, I find myself unable to comprehend the math behind Secretary of Defense's statement that our ship inventory "...will continue to grow over the next five years to support the global demands for naval presence..." even as he seeks to place 11 cruisers with useful life into long term storage and cuts the LCS buy by nearly 40%.  Perhaps he means a very temporary increase.  If so, the parsing is execrable.  Additionally, the logic behind his truncation of the LCS program -- the suspicion that it lacks firepower--undercuts the suggestion that naval presence is globally demanded.  Finally, it surpasses understanding to believe that the present requirements definition and acquisition systems will be nimble enough to come forward with a "frigate" --even one derived of an existing design--in time to prevent the continuing slide in the size of the fleet.  We tried to build LCS in a hurry, and in that impatience have been the seeds of some of her early challenges. 

And finally, there is we, the American public.  We haven't demanded better from our President and our Congress.  We are told that we are "war weary" from wars that have touched very few of us and for which we did not sacrifice.  We want to be the world's most powerful nation, we enjoy the benefits of it, we take pride in it, but we don't want to pay for it.  We circle the wagons when we hear of compensation, healthcare and retirement reform, some of us because we have begun to internalize the feeling that we have earned all of it and much more, and some of us because we feel guilty that "others" do our fighting for us.  We go to the polls and pull the lever for a man who tells us he'll go to Washington and cut spending, and then return him to office for protecting an installation that simply isn't needed, or for fighting to keep open the commissary that is down the road from the Wal-Mart, the Target, and the Acme. 

There is still time.  The decline can be arrested, and we can thrive again.  We need leaders, and we need leadership.  We need people who tell the truth, and we need to be a people who can handle it.

Bryan McGrath

Budget Murmurs and the Whiff of Politics

Marcus Weinberger and Chris Cavas have a piece up at Defense News that previews the 2015 Defense Budget.  I don't know Weinberger, but Cavas meticulously sources his stories and is almost always on the money.

Of note is this paragraph:  "The Navy will not ask to retire an aircraft carrier, as had been reported. Yet it will not fund the midlife refueling of the carrier George Washington. Instead, DoD will make a decision on whether to cut an aircraft carrier from its 11-ship fleet in 2016, sources said." 

I smell an election year rat.  The Navy cuts advanced funding for the GW overhaul from 2015, virtually guaranteeing that said overhaul gets pushed at least one year to the right, but keeps the carrier on the books, with a "decision" to be made about whether to cut it in 2016.  Actually, that 2016 decision would come forward in Feb/March of 2015, when the 2016 budget is submitted.  Which just so happens to be a few months AFTER Senator Mark Warner (D-VA) faces the electorate in what is projected to be a tight race against former Republican National Committee Chair Ed Gillespie in the Old Dominion.  Which happens to be where aircraft carriers are built.  And refueled.  And (in several cases) homeported.

No one who thinks cutting the aircraft carrier is a bad idea should breathe any easier.  Cutting this RCOH funding in 2015 leaves GW a "dead man walking". 

Bryan McGrath