Budget Cut/Stimulus Implications for the Coast Guard

OMB guidance for the FY 2013 budget submission is out.

“Unless your agency has been given explicit direction otherwise by OMB, your overall agency request for 2013 should be at least 5 percent below your 2011 enacted discretionary appropriation. As discussed at the recent Cabinet meetings, your 2013 budget submission should also identify additional discretionary funding reductions that would bring your request to a level that is at least 10 percent below your 2011 enacted discretionary appropriation.”

But in addition to cuts of 5 to 10% they are also looking for “positive economic impact.”

“…you should identify programs to “double down” on because they provide the best opportunity to enhance economic growth.”

I don’t see how cutting a manpower intensive service like the Coast Guard can help unemployment, but to me “positive economic impact” means:

  • Should be something the country is going to buy sooner or later, things that have lasting value, preferably saving money in the long term.
  • Employs Americans–what percentage goes directly into American pockets should be a consideration.
  • Reduces dependence on foreign oil.
  • Requires minimum imports.

Galrahn (Raymond Pritchett) over at Informationdissemination sees very little evidence of meaningful security review, “Thoughts on Future of DOD Budget”. If that is true for the DOD, then it is also probably true for the Coast Guard as well. We probably can’t expect any significant change, other than budget cuts, but we can still hope. Galrahn did make a very specific reference to the Coast Guard:

“…it is hard to believe the Obama administration would recommend anything favorable to the maritime services…That doesn’t mean they shouldn’t. I strongly agree with the economists who have been critical of the Obama administrations implementation of Keynesian economics, because I believe it has been a spectacular failure primarily because the focus on service related jobs has done almost nothing to create legitimate supply chains throughout the economy with the government investment. Several economists have noted that most of the money headed to the private sector ends up going to suppliers that are outside the United States, and have thus far produced far less economic impact (and jobs) than the administration was hoping for. The only manufacturing industry in the United States where money is almost guaranteed to hit suppliers in the United States is shipbuilding, which ironically is largely a government dependent manufacturing sector anyway. It is hard to imagine a scenario where the Obama administration would consider the option of increasing spending in shipbuilding as a jobs program for manufacturing. If they did, building Coast Guard vessels would be as much if not more important priority than building Navy ships (emphasis applied), but the likelihood the Obama administration would try something as intelligent as spend government money on the shipbuilding sector as a jobs program is fairly close to zero. One of the primary reasons is because shipbuilding could takes years to produce desired economic results, and it is hard to imagine the Obama administration has a long term vision for jobs with an election only 15 months away.”

New ship building programs may be a long way off although I believe the OPC program could be considerably accelerated, but the Coast Guard has lots of other programs where perhaps the government should “double down.”

The Inland River Tender program is, I believe, ready to go. They build the infrastructure for the most fuel efficient transportation system in the US. They can be built in multiple small ship yards (benefiting more than one Congressional district).

Response Boat, Medium (RB-M) and Response Boat, Small (RB-S) projects are in progress. The much smaller cutter boat programs, the 11-meter Long Range Interceptor II (LRI-II) and the 7-meter Cutter Boat Over the Horizon IV (CB-OTH-IV) should be ready for investment now or in the near future. These new boats should also be more efficient to operate.

Many of the Coast Guard’s buildings ashore seriously need replacement or refurbishment. These projects all provide jobs to the local economy and with the more efficient buildings and solar power installations will reduce fuel consumption.

The NSC and FRC programs are also mature, and well understood. The Coast Guard would, I’m sure be delighted to have funds to accelerate these programs in FY2013. It might be a logical move, but the CG will be lucky if one NSC and six FRCs are fully funded.

Something that might be considered is switching from buying European built HC-144s to much more fuel efficient, American built Beech C-12s. These aircraft also known as the Super King Air, are already used by all the other armed services. The Army and Air Force use them for ISR (intelligence, Surveillance and Reconnaissance) and internationally they are widely used as Maritime Patrol Aircraft. Recent variants match the HC-144’s range, speed and endurance. Their operating costs are lower. There may even be other service contracts that the Coast Guard could exploit to ease procurement.

In a side note, with the Navy facing down sizing, it is more important than ever that Coast Guard assets have meaningful military mission capabilities. I consider that a moral obligation, but that the service can do “double duty” could also be a potential selling point.



4 thoughts on “Budget Cut/Stimulus Implications for the Coast Guard

  1. Pingback: Daily Summary for September 6 2011 : Coast Guard Digest

  2. The suggestion to switch from HC-144s to C-12s mid-fleet is naive and really ruins the rest of what was an otherwise intelligently written (even though I disagreed with the political tone) post. First, a mixed fleet is inherently significantly more expensive due to the elimination of spare parts pooling and consolidation and pooling of training, and the repition of services like engineering. Over the life of the assets, this would significantly exceed the small acquisition cost savings. Focusing on initial acquisition price versus lifetime ownership cost is a typical rookie mistake, but unfortunatley happens far too often.
    The suggestion also reflects a lack of understanding of the global supply chain and makes you sound like the kind of person who buys a Ford because you think its “American” even though it is entirely made in Mexico from parts manufactured around the world, while never dreaming of buying a Toyota that is almost entirely build in the U.S. with U.S. sourced parts. You may be interested to know that the CASA airframe represents much less than half of the total cost of an HC-144. With U.S. built engines, avionics, and mission system, the HC-144 may very well contribute far more to U.S. jobs than a King Air with Pratt and Whitney Canada engines.
    Finally, while the above is all fact based, I also have to disagree with your entire premise that we’re “losing jobs overseas” and we’d be much better off somehow restricting free trade. I’d highly recommend a basic international business econ class if you ever have the chance to take one. Don’t worry, you won’t be brainwashed, but it will give you an place to flush out your ideas in a rigorous way and you may be suprised by the results.

    • I never advocated switching from the HC-144 to the C-12 without looking at all the cost implications. I suggested looking at at it as a possible alternative. Assuming that the supply standardization will make up for the fact that the C-12 uses approximately half the fuel of the HC-144 is the kind of first blush gross assumption you accuse me of. It is the operating expenses rather than the acquisition costs that make the HC-144 the most expensive part of the Deepwater program. C-12 parts are far more common in the US than the CASA C-235 parts. Your assumptions about my politics (and my choice of cars) are dead wrong. I have been a free trade advocate all my life, but stimulus spending has a specific purpose and in this case it is not to help the Europeans.

      Make the switch only if it makes sense, but make an informed choice.

      • the real mistake the Coast Guard made was abandoning the C-130 in favor of the less capable C-144. Once again, the Coast Guard went cheap, and the mission will suffer because of it.

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