U.S. Navy and Marine Corps Budget Request for Fiscal Year '26

Opening Remarks and Gratitude

• The subcommittee convenes to discuss the president's budget request for the US Navy and Marine Corps for fiscal year '26.
• Welcoming remarks to Secretary of the Navy John Phelan, acting Chief of Naval Operations Admiral James Kirby, and Commandant of the Marine Corps General Eric Smith.
• Gratitude expressed for their leadership during a crucial time.
• Acknowledgment of sailors and marines for their service, especially those in the Gulf and Red Sea.
• Recognition of sailors who launched Tomahawk cruise missiles in a joint operation to strike Iran's nuclear aspirations.
• Recognition of fallen Marine Corps comrades as victims of Iran’s war against the US and Israel, referencing the hostage crisis in Tehran and the Beirut bombing in 1983.
• Iran is now paying a steep price for its actions, thanks to Israel's initiative and the president's support.
• This weekend's events highlight the challenges facing the joint force.

Budget and Major Power Competition

• Inquiry into whether the president's budget request provides adequate resources to meet, deter, and defeat challenges.
• Each service faces challenges related to major power competition and alignment of adversaries.
• Major transformations require testing assumptions, service culture, industrial base capacity, transparent relations with Congress, and consistent investments in major priorities.

Positive Feedback and Concerns

• Appreciation for Secretary Fielding's recognition of Congress's role and collaborative approach.
• Commendation for transparent communication and engagement with the maritime industrial base.
• Recognition of the Marine Corps' Force Design 2030 as a valuable model for other services.
• Critical assessment of the administration's resourcing of the Department of Defense.
• Concerns over a full-year CR, failure to address rising costs, and a base request lower than the previous administration's request for fiscal year '25.
• A base defense top line not keeping pace with inflation or the threat of the PRC is insufficient.

Specific Concerns and Questions

• Inquiry into the administration's interest in expanding shipbuilding capacity, specifically regarding Virginia class submarines.
• Questioning why investments aren't built into the basic budget request and reliance on parliamentary authorities.
• Assessment needed on impediments to delivering essential capabilities like submarines, destroyers, and amphibious vessels.
• Despite increased funding, Virginia class sub production timelines continue to lengthen.
• Need to improve munitions production efficiency, especially missile defense interceptors and long-range fires.
• Inquiry into the Navy's handling of the high operational tempo in the Red Sea.
• How the fiscal '26 request addresses the urgent need to deepen magazines cost-efficiently.

Lessons from Current Conflicts

• Inquiries about lessons learned from the complex security environment.
• Navy's learning from long deployments and air wing accidents on USS
• Lessons from Ukraine's decimation of Russia's Black Sea fleet.
• Navy's approach to force protection, including hardening assets in port and at sea.
• Adequacy of resources for force protection.
• Marine Corps' lessons from Russia's ground war in Ukraine.
• How information sharing informs the Marine Corps' transformation efforts.
• Dependence on logistics and transportation provided by other services in the Indo-Pacific.
• Deficiencies in the defense top line must be addressed.
• The current budget request may not support building a force capable of projecting power globally and deterring Chinese aggression. A conflict in other theaters could be possible.

Senator Schatz's Remarks

• The hearing is happening during pivotal moment due to recent Middle East events.
• President Trump's decision to strike Iran lacked Congressional authorization and endangered service members.
• Iran's missile attack on Al Hudid Air Base in Qatar was mentioned.
• Announcement of a ceasefire is good, but an actual ceasefire is needed.
• The recent conflict resulted in casualties: 24 Israelis dead, 600 Iranians dead, and 2500 wounded.
• The United States and Iran must return to negotiations.
• The fiscal year 2026 base budget request for the Navy and Marine Corps is $242,200,000,000.0$, which is $8,000,000,000$ below the fiscal year 2025 CR.
• Failing to address shortfalls from the CR means the Navy cannot deter China.
• Using parliamentary authorities is not a responsible way to sustain the Department of Defense.
• The department's ability to support service members should not rely on unrelated tax and health care packages.

Concerns and Discussion Points

• Concerns about shipbuilding, especially the Columbia class and Virginia class submarines.
• Congress has been asked to cover cost growth or support budget gimmicks repeatedly.
• The Navy requests only one Virginia class submarine, hoping reconciliation will provide a second, but it is still $2,000,000,000$ short.
• A plan is needed to build up the maritime industrial base.
• Continued ship maintenance delays and extended deployments are unsustainable for the fleet and personnel.
• The committee needs the Navy's plan to retain experienced shipyard workers and expand the workforce.
• Inquiry into the Navy and Marine Corps' posture in the Middle East and Indo-Pacific.
• The Navy and Marine Corps must protect service members in the Middle East and maintain a presence in the Indo-Pacific to deter conflict and reassure allies.
• Information is needed about the cost of sustaining such a presence and whether current resources are sufficient.

Secretary Phelan's Testimony

• Gratitude to President Trump and the Senate for the opportunity to serve as the 79th Secretary of the Navy.
• Focus is on readiness, assessing the impact on readiness before spending any dollar.
• Three priority areas: strengthening shipbuilding, fostering an adaptive warfighter culture, and improving the health and training of personnel.
• Learning tour across the country and overseas revealed that adversaries are closing the gap at an alarming rate.
• Need for cultural and strategic changes to maintain a competitive advantage.
• Addressing bureaucratic decision-making, risk aversion, and gold-plated requirements.
• Operating in a more hostile and unpredictable world with changing warfare.
• China is the primary competitor, aiming for forward projection of power with a naval fleet nearing 400 ships.
• Navy Marine Corps team is deepening cooperation with allies in the Indo-Pacific and supporting homeland defense through Task Force Sappr.
• A Navy Ohio class guided missile submarine caused significant damage to Iran's nuclear capacity.
• The Department of the Navy is prepared to fight and win anytime, anywhere, against any adversary.

Maritime Industrial Base

• Naval superiority is under threat due to the erosion of the shipbuilding industry.
• Rebuilding the maritime industrial base is a national security imperative.
• President Trump's executive order on maritime dominance is a step in the right direction.
• Insights gained from visiting shipyards and discussions with leaders and tradesmen.
• Need to act with urgency and behave as if on a wartime footing.
• Budget flexibility is required, moving away from programmatic funding.
• Outdated discretionary funding methods cannot keep pace with technological changes.
• Requires a whole-of-government approach with oversight and accountability.

Collaboration and Investment in Personnel

• Developing a plan to restore the industrial base through collaboration between Congress, private industry, and the Department of the Navy.
• Greatest asset: the extraordinary men and women who serve (sailors and marines).
• Continued investment in recruitment, training, and retention efforts.
• Prioritizing quality of service initiatives to support sailors, marines, and their families.
• Ensuring personnel have every tool, advantage, and support needed.

General Smith's Testimony (Marine Corps Priorities)

• Priorities:
  • Restoring a 3.0 amphibious ready group/marine expeditionary unit presence (East Coast, West Coast, Okinawa).
  • An amphibious ready group with a marine expeditionary unit embarked is a versatile tool.
  • Accelerating force design (adapting to the changing character of war).
  • Fielding new capabilities and reshaping formations.
  • Improving quality of life (Barracks 2030).
  • Investing in the well-being of marine families.
• Marines remain the most ready when the nation is least ready.

Admiral Kilby's Testimony (Navy Posture)

• The Navy provides sea power and control to preserve our way of life, ensuring our security and prosperity and that constant oversight and funding is required to be ready when the nation calls upon them.
• The Navy has defeated hundreds of drones and missiles, executed dozens of offensive strikes in the Red Sea and Eastern Mediterranean, strengthened alliances, and deterred Chinese aggression.
• Supporting operations on the southern border and maintaining strategic deterrence.
• Laser focus on China as a consequential opponent while strengthening homeland defense.
• Prioritizing readiness through investments in strategic deterrence, defense industrial base, and installations.

Challenges and Commitments

• Platforms are not as ready as they need to be (goal: 80% combat surge readiness by 01/2027).
• Reducing maintenance delays and improving manning, training, modernization, and sustainment.
• Navy has 22,950 gaps at sea (plan to reduce significantly by the end of 2026).
• Commitment to attracting and developing innovative personnel.
• The Navy contracted over 40,000 sailors last year, the most since 02/2003 and expects to reach 42,000 contracts by the end of the fiscal year.
• Ordinance expenditures in the Red Sea have strained the munitions industrial base.
• Need consistent and predictable funding.
• A whole-of-government effort is essential to our security and prosperity.