Where Is the Money Going?

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Wonder why we cannot afford NSCs 7 and 8, and why we will be building only one OPC a year? Why the Coast Guard cannot get the approximately $2-2.5B/year it needs for modernization and is making do with $1.4B? There are lots of explanations, but take a look at this chart.

Informationdissemination.net has a great discussion of this. I always knew the F-35 was a big program, but I never realized how big. The thing I find most frightening in this is that one contractor is so monopolizing the Defense Budget that it may kill off its competitors not just in the US but all over the world.
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“Among the 96 programs in DOD’s 2011 portfolio, the Joint Strike Fighter is the costliest, the poorest performer in terms of cost growth, and the program with the largest remaining funding needs. The Joint Strike Fighter accounts for 21 percent, or nearly $327 billion, of the planned total acquisition cost of the portfolio.
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“The Joint Strike Fighter program alone is expected to account for 38 percent—or almost $246 billion—of the future procurement funding needed. This amount is enough to fund the remaining procurement costs of the next 15 largest programs.
Let’s see, $70.6B in and $256B to go, without considering probable future growth, that is $326.6B, enough to buy about 467 National Security Cutters.

36 thoughts on “Where Is the Money Going?”

  1. America has a $14 Trillion dollar economy. But who can possibly understand that size ? Here’s a little more down to Earth comparison:

    In America every year, consumers spend about $14 Billion dollars around Valentines day. Chocolate, stuffed animals, greeting cards, flowers, ….. That $14 billion to celebrate Valentines day has been holding pretty steady for several years now. Imagine spending $ 14 billion e-v-e-r-y year on new shipbuilding here in America ? $14 billion for brand new cutters, ice breakers, rescue helo’s, maybe throw in a Navy ship or two each year. Valentines Day is more important to American consumers than what Congress/Executive Branch think the USN and USCG should spend on new cutters and warships each year. That graph posted above is a good attempt to visualize some spending. Breath taking and mind boggling.

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  2. I can’t even fathom how the government can’t squeeze out another $1 billion to have a well funded and state of the art Coast Guard when we’re blowing 256 billion on the JSF…

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    • Largely because National Defense is codified in the Constitution as one of the very few obligations of the Federal Government. Other functions (including many undertaken by the Coast Guard)…not so much.

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  3. Conservatives love to pine away for those lost Reagan days. The best thing he ever did in my opinion was make the Navy Buy the 110’s for the Coast Guard. I wonder what would happen if the major acquisitions programs were turned over wholly to the DoD. The Artic CONOP called for a bunch of breakers but the DoD didn’t want to pay for them. We hear all the time how CoCom’s want the CG right in step but they don’t want to help out with the NSC. They want the FRC’s and the 144’s working the drug war, but they don’t want to buy them. Everyone loves the CG but doesn’t want to fork over the cash.

    Make DoD buy the breakers, make DoD buy NSC’s, OPC’s, and FRC’s. Hell, if we have to send 225’s around the world to set up the ATON in the countries we invade then they should buy those too. Just as long as we get to design them to do the CG missions first, and then support DoD missions.

    Pipe dream, I know

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    • COCOMs do not have the purse strings, the services are the force providers to the COCOMs.

      Why should DOD pay for a mission which has been entirely the responsibility of the Coast Guard since 1965?

      Many in the CG are quick to demand money from DOD but want to provide little to nothing in return. Latest projection shows the CG provides less than 1% of the total force towards Overseas Contingency Operations. For that mere 1% the CG provides it is well compensated for too.

      Meanwhile back on planet earth you don’t see the ACOS, CNO/CMC or CSAF demanding money from the COCOMs for what they provide. Is it any wonder then that CG has a serious image problem at not being perceived as a military service peer?

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      • Sure COCOM’s don’t have control over their budget but they definitely have influence over it. CENTCOM decides they need a certain force package to do a certain mission and they request it through the Global Force Management Board (GFMB) which the COMDT sits on. They make requests for certain forces and if the CG has the best/cheapest fit, and the forces can be spared then the CG supports the request. Some of those are completed under Title 14 and are CG funded. However, some of them are OFCO funded by DoD (PSU/PATFORSWA/MOL/MFPU…).

        When I was patrolling in Africa it wasn’t a CG mission, those boys in Bahrain aren’t working a CG mission, and that WMSL currently heading west until it turns east isn’t doing a CG mission. Big ships and fixed-wing aircraft are national assets and they do plenty of DOD work. 1% contribution, to what operations? That sounds like a bogus stat when a narrow view. How about percentage of the force actively doing something. There is likely a higher percentage of CG members doing something that actively contributes to national security on a daily basis then DoD. Takeaway, stats are BS and you can make it sing any tune if you manipulate the assumptions and constraints enough.

        Regarding your artic breaker comment, sure the CG got stuck with the mission, and now the mission has changed to what it was like prior to 1965. We aren’t worrying about bombers flying over the artic, or subs punching through the ice to launch missiles, but there is a demonstratively strong military interest in the region. The Navy exists to dominate the oceans, this is just some new ocean. The COMDT is 100% correct when he says that there are many stakeholders involved and the CG should not bear this cost alone. I’m not for going out and asking for more work but it is important to hold our ground. If DoD wants an artic presence then they either need to get back in the world of ice breaking or do what they have been doing for years; build the ships and let us run them. Who built the WPB’s, who built the MFPU CPB’s, who gave us ALEX HALEY, ACUSHNET, the WPC’s, and countless others before? If the Navy wants a capability in their extended inventory then they need to bear the burden of buying them. Its that simple. The CG acquisition cannot bear the cost of buying the new ships, they just cost too much and they crowd out the rest of the programs.

        I think the DOD needs to consider if they want a Coast Guard. How about a thought experiment? Take away the Coast Guard. Now ask DOD to look at their entire set of forces world-wide, where are they missing capability in their layered defense. What missions now need to be done by DOD, what assets are needed for that, how much would all of that cost, and how would that distract from their current missions? AMIO/CD/SAR/LMR/PWCS are all done by the military in other countries so we can assume that there would be some expansive gaps. OK, now add back in the Coast Guard and look at what gaps still remain. There, those dark corners, that is are where DOD funding and support needs to be leveraged. If they can do it better, cheaper, and it compliments their other roles then let DoD fill that. If on the other hand its the CG that can do it better, cheaper, and with more synergy then DOD needs to help out, help out themselves. If that means they need to walk the hill and champion the budget hawks then great, do it. If they need to build them and operate them with CG crews and OE budgets then that will work as well. End of the day its that work needs to get done and someone needs to do it, I could give a hoot what color the uniform is.

        Hey but this isn’t really directed a you so please don’t take it as an attack. If the sand peeps and shrimp forkers piss you off then join the club. The part of the CG that gets on the ships and goes far from home feel rather military. Luckily, for the ones that don’t there are important jobs for them to do as well and still wear the uniform. That is the beauty of this service, no matter what your passion, you can probably do it in the Coast Guard.

      • pretty much right. Go read up on the National Fleet concept developed by now Undersecretary Bob Work while he was at CSBA. Clue the USCG is part of the National Fleet.

    • As long as the Coast Guard is outside DoD, they aren’t going to get significant amounts of DoD money. It’s that simple.

      Moving to DHS didn’t help the Coast Guard’s budget, despite the claims at the time from all of the “we’ll be better off in DHS” cheerleaders. Of course, had the leadership concentrated on getting money for ships during the early days of the Department instead of squandering the money they did get on units that have returned zero on the investment, maybe all eight NSC’s would have been funded by now.

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  4. Unfortunately the way the budget process is structured, it makes it almost impossible to recognize the defense contribution of the Coast Guard.

    In fact it makes it very difficult to deal with any multi-mission organization like the CG because it seems to be able to deal with only one purpose at a time.

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  5. Unbelievable, Is this what our Tax dollars are being sunk into. I thought the LCS was a huge Money Pit. It looks like the F-35 takes the cake in being the biggest Money pit. The best thing the DoD can do now to save face from Congress cutting the money from them is to completely kill the F-35 B and C variant and keep the F-35A variant going. Upgrade the F-15E’s to F-15SE. Keep the F-18 E/F production open for the US Navy and upgrade the Super Hornet to Super hornet international road map. Force the USMC to take the Super Hornet and upgrade the Harriers to include AESA radar and AMRAAM.

    As for the LCS, kill it completely and sell the LCS to countries such as the Philippines or Taiwan. Restart the Frigate program and force the US Navy to look at either getting a Patrol frigate out of the US Coast Guard’s National Security Cutter or getting a Euro frigate such as the Álvaro de Bazán class frigate, Fridtjof Nansen class frigate or the FREMM multipurpose frigate. The LCS as it is now, is a huge money pit on the taxpayers and a death trap for anyone who plans to sail in them. Here’s the recent post from CDR Salamander about the LCS cracks on the ship http://cdrsalamander.blogspot.com/2012/04/lcs-unbearable-sight-of-cracklns.html

    As for the Virgina Class SSN, It’s time we open up to selling some Virgina class SSN to our closes NATO allies namely Australia and Canada to see if they are interested in buying a couple of Virgina class SSN. All they would have to do is pay is for the construction, Maintenance and Nuclear refueling associated cost. They can install any Hardware, software or any electronics they want. They just to come and pick it up when it’s ready to go. It would be a win-win for the US Navy, our close NATO allies and the taxpayers.

    As for the DDG-1000, Kill it completely and start production of the Burke flight III. That way you have Flight III Burkes that can compliment the Ticos or relieve them. We would have BMD capable burkes

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      • It’s either we do what I posted or else we can go bankrupt and not have the money left for the NSC, OPC and future Arctic patrol ship

      • I am certain our Flags are eagerly awaiting more of your expert insight and guidance…

      • Just look at it this way, as a voting Taxpayer do you think I want to foot the bill for the expensive, overpriced LCS and F-35 B&C. In a rough economic climate that were in right now, It’s time we take drastic austerity measure including canceling and selling the LCS off, canceling the F-35B&C and keeping the F-35A going. Offer Canada and Australia some Virgina Class SSN to reduce the cost and keep people at EB employed and working. I would cancel the LSC which is costing every taxpayer in this country $700 million per copy and go for National security cutter which is at $400 Million per copy vs paying $700 million.

        If we keep sinking money into the LCS and F-35B&C Money pit. We don’t have any money left to pay for any future NSC, OPC or even the arctic patrol ship. Heck we won’t have any money left to pay for medicare, medicaid or even Social Security after we pay for the F-35 and LCS debacle. In a rough economic climate were in, taxpayers shouldn’t be paying for expensive toys that do not work as promised or advertised. Taxpayers need to get more bang for their buck and what were getting from the LCS and F-35, where not getting our moneys worth.

  6. There is an old saying that goes “Corporations don’t pay taxes, people pay taxes”. Now the population of Canada is about 33,500,000 people. Australia is about 22,900,000 in population. And the state of California there is 37,000.000 people. So Nick, how many Virginia class submarines do you think California can buy?

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    • Nicky’s conclusions are perhaps too sweeping, but both Canada and Australia have submarine programs that have been miserable failures, and now Australia is planning to buy up to twelve large air independent Diesel Electric subs that may cost as much as the Virginias.

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      • Chuck,
        Their is talk between Australia and Canada to go SSN route and look at buying nuke boats from either the US or France. They are both looking getting either the astute class SSN, Barracuda class SSN or the Virgina Class SSN.

  7. The overall budget is not applicable to this conversation. Hell, even the DOD budget is small potatoes compared to the overall budget. there is no point arguing over this. Entitlements, health care, and the tax issue are the only things that really play into most of the budget. If the deficit was $20B and we just had to balance it the budget then cutting acquisition budgets would make sense. nothing else really had a large enough part of the pie to matter. I just want $2B more per year, is that too much to ask for?

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  8. How did a blog that is about U.S. Coast Guard , turn into what type of submarines Canada and Australia
    navies should bye ?

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      • Also Chuck, The 110’s we have in Iraq right now, would be a good time to see if the Iraqi Navy is interested in those 110’s after we finally leave Iraq. It would save money from having to transport the 110s back to the states and would make a quick sale to the Iraqi Navy. On top of that as More FRC’s that come on line, the more 110’s we can decom and sell to the Philippines, Nigeria and Iraq. I would do a one for one, for every FRC that comes online, we decom a 110 and sell the decom 110 to either Philippines, Nigeria and Iraq. That way we have the money to finance the cost of the FRC, OPC or even the NSC.

      • Nicky,
        I think what the below commentors are trying to say is Excess Defense Article, Foreign Military Sales doesn’t work that way. You won’t see a direct infusion into the aquisition budget from such sales. With FMS you want the partner to buy the new stuff to bring down the overall per unit cost for everyone, or keep a productionline open during a gap in funding. FMS for EDAs has other benefits, good will with the partner, reduced disposal cost for the service etc.

      • What about the jobs for those who have to transfer defense excess to the customer. What about those who have to do the retrofit, upgrades or do the paint job for the customer.

      • For example turning a WHEC into a reef costs ~$10M, giving it away to the Phillipines costs less then $1M and sometimes they actually pay for it. Really its just like giving away your stuff to Goodwill rather than paying to have it hauled to the dump.

        This is part of the reason the Navy has ghost fleets. Sure they keep an “inactive reserve” but their annual budget for disposal is limited and fixed. Its not like land based military equipment where you can shrink wrap it, stick it in the desert relatively cheaply, cannibalize them for parts, and hold them for a just in case situation. Since we can’t hold on to the toxic waste balls that old ships represent, giving them away is our cheapest option. You can’t go to many countries in central America without running across an 82′ or 180′ Colombia already has the DURABLE and COURAGEOUS.

  11. Come on Chuck! You are using RT. Com as a valid news source. They take their marching order direct from President Valdimir Putin. I mean RT is nothing more than Pravda 2.0.

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