With the exclusion of nearly $2 billion for a major naval effort from the bipartisan stopgap spending bill, lawmakers have effectively punted a decision on the Virginia-class submarine program.
The omission, lawmakers said Tuesday, gives defense hawks on the Hill an opening to dig into a Navy proposal that has been floated as a potential alternative: a framework that would alter how the service structures contracts with submarine builders to fund increased workers’ pay and meet other inflation-related expenses.
That $1.95 billion anomaly for the Virginia-class attack submarine program, included in the continuing resolution rejected by the House last week, was left out of the new bill text that would fund the government through Dec. 20 at current levels. The House is scheduled to vote on the bill Wednesday, and the Senate is expected to follow later in the day.
The change in the two CRs was a result of the political reality and timeline lawmakers are facing to get a continuing resolution passed through both chambers by the end of the fiscal year on Sept. 30, lawmakers said.
“The only way to get the CR done is to get it done skinny. So it has to be part of a larger discussion between now and year-end,” Senate Armed Services Seapower Subcommittee Chair Tim Kaine, D-Va., said, referring to the Virginia-class money. “There are going to be problems with that program if we don’t figure out how to fund it in a more robust way. But we should do the skinny CR through year-end and then figure it out.”
The Navy’s shipbuilding programs have received enhanced scrutiny in recent weeks, particularly from House Defense appropriators, who have decried the recent revelation of a multibillion-dollar shortfall in funding for the Virginia-class submarine.
House Defense Appropriations Chairman Ken Calvert, R-Calif., said Tuesday that lawmakers “have time to deal with” the question of the $1.95 billion in funding — but he still needs answers from the Navy about the request.
“We’ll just have to work with the Senate and work with the Navy and figure this out,” he said in a brief interview. “And we weren’t told about this until the last moment, so we have to understand exactly why it’s needed and where it’s going to go.”
Rather than including the submarine funding in the continuing resolution, a House Republican leadership aide told reporters Sunday that congressional appropriators and authorizers worked with President Joe Biden’s administration to find an “alternative way to address that issue.”
A spokeswoman for Speaker Mike Johnson, R-La., did not respond to a request for comment Tuesday seeking details.
The only alternative that’s been discussed publicly is the so-called Shipyard Accountability and Workforce Support initiative, or SAWS, that backers have framed as a way to address rising labor and material costs that are contributing to funding shortfalls in major programs.
The proposal would essentially allow industry to tap into and pull forward funding designated for submarine programs over the course of a yearslong contract, thereby creating a fund that companies could use to pay for current workforce needs and capital investments.
Navy Secretary Carlos Del Toro has seemingly distanced himself from the plan. And House Defense appropriators, emerging from a closed-door Capitol briefing with Del Toro late last week, signaled they weren’t sold on the approach.
Asked whether SAWS could be an alternative way forward, Calvert on Tuesday pledged he would “take an honest look at it.” But he noted it was just brought to the Hill a couple weeks ago.
“Basically, that’s front-loading existing appropriations,” he said of the plan. “Obviously, that’s not the normal process, so we need to look at that very carefully and see what advantages or disadvantages there may be involved.”
A Navy spokesperson, noting that the service “cannot comment on pending legislation,” said in an emailed statement Tuesday: “We are both encouraged to see progress and committed to working with Congress to meet our financial goals with the full understanding that we are duty-bound to act as responsible stewards of taxpayer funds.”
The Office of Management and Budget previously rejected the SAWS request and instead sought the $1.95 billion anomaly for the Virginia-class program. While two Virginia-class submarines are the drivers of the anomaly request, the SAWS approach would apply to additional Virginia-class and Columbia-class ballistic-missile submarines that are the subject of negotiations with industry.
If the administration and Congress opt to embrace the new contracting move, it’s unclear whether that $1.95 billion anomaly would still be needed — in part or in full.
Senate Armed Services Chairman Jack Reed, D-R.I., said as he’s reviewing the potential implications of SAWS, he’s also looking at “the need for additional money and the pacing of money over the next several years for the program.”
“That’s why we — staff and myself — are trying to get deeply engaged in SAWS,” he added. “What is it? How do you do it? Is it more efficient than simply adding an additional $1.9 billion? And frankly, we have to get back to a dependable production schedule that is also cost effective. And that’s the goal.”
House Armed Services Vice Chairman Rob Wittman, R-Va., said Tuesday that he’d like to see SAWS and the $1.95 billion addition for the Virginia-class submarine program approved in tandem.
“There are things that need to happen in the interim that should be in place to enable the $1.9 billion, and that is, you have to get the workforce issues straight,” he said. “You have to be able to make sure we’re investing in the workforce. So the SAWS program, I think, has to be part of addressing that.”
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