CT Dems push back on Pentagon plan to cut submarine production

Federal lawmakers are warning about the potential “ripple effect” that a proposed reduction in submarine procurement could have on Connecticut-based companies like Electric Boat that produce Virginia-class subs as well as on the industry at large.

As part of President Joe Biden’s budget request submitted this week, the Pentagon proposed cutting one Virginia-class submarine for fiscal year 2025, which begins on Oct. 1. This would reduce the number from two to one nuclear-powered submarine a year and cut spending by $2.6 billion compared to the current fiscal year.

Members of Connecticut’s congressional delegation are raising concerns about the plan and what it would mean if implemented for Electric Boat as well as the smaller suppliers around the state. They also warned about the potential ramifications on the security pact between Australia, the United Kingdom and the United States (AUKUS).

The submarine industry plays a major role in Connecticut’s defense sector and economy, especially in the southeastern part of the state, represented by U.S. Rep. Joe Courtney, D-2nd District.

Electric Boat locations in Groton and Quonset Point in Rhode Island handle much of the Virginia-class shipbuilding, along with Huntington Ingalls Industries’ Newport News Shipbuilding in Virginia.

Courtney earned the nickname “Two-Sub Joe” when he first came to Congress in 2007 by increasing the production cadence from one to two subs per year. As the ranking member of the House Armed Services’ Seapower and Projection Forces Subcommittee, he said the budget request “makes little or no sense.”

A combination of disruptions have put a strain on the U.S. submarine industry and procurement: the pandemic, supply chain issues and a workforce that is aging and retiring. Companies like Electric Boat are hiring to fill those gaps and add to the ranks as production grows over the next decade.

Mike McCord, the comptroller of the U.S. Department of Defense, was asked at a Monday briefing about whether the decision was made because of spending caps negotiated in Congress for the current fiscal year or issues with production cadence and delivery schedule. He said it was the latter.

“Virginia-class, to be clear, was trying to get to a better, more healthy dynamic where we can get to the two submarine a year production rate, and we thought that going a different direction was our best move in that case,” McCord said, noting that boats that are supposed to be delivered this year were months behind.

Courtney noted that some funding has already been approved — while other money is pending in the current government funding bills — that would go toward a nuclear reactor for a second Virginia-class sub in fiscal year 2025. He is hoping to get more answers from the Pentagon at a hearing about the budget plan likely for next month.

“If such a cut is actually enacted, it will remove one more attack submarine from a fleet that is already 17 submarines below the Navy’s long stated requirement of 66,” Courtney said. “Given the new commitment the Department of Defense and Congress made last year to sell three submarines to our ally Australia, which I enthusiastically support, the ramifications of the Navy’s proposal will have a profound impact on both countries’ navies.”

The White House budget noted the Pentagon’s submarine industrial base study to help with the “recapitalization of the submarine force needed to increase the United States’ ability to build and sustain attack submarines to meet U.S. military requirements” as well as the Biden administration’s commitments to AUKUS.

Biden also echoed his call for $3.4 billion in additional funding for the submarine industrial base to bolster security assistance in the Indo-Pacific region by improving the U.S. Navy’s public shipyards. That is part of his larger emergency national security package, which includes funding for Ukraine, Israel and humanitarian aid for Gaza, which has stalled in Congress.

Presidents are required by law to submit budget plans to Congress, but they are rarely enacted and are used to help with agenda setting and messaging. Congress is ultimately tasked with appropriating money to fund the government and its agencies.

But Courtney said lawmakers were starting to get glimpses of the possibility of sub reductions back in November. He penned a letter along with three other members on the House Armed Services Committee, asking the administration to maintain the two Virginia-class subs per year, especially after Congress enacted the most recent defense policy bill that enacted parts of AUKUS.

As part of AUKUS, Australia will initially buy three Virginia-class subs from the U.S. But the first transfer is not expected to happen until the early 2030s.

“For years, Congress, the Department of Defense and workers and small businesses in Connecticut have been working hard to restore the submarine industrial base, and we cannot afford to take a step backward now,” U.S. Sen. Richard Blumenthal, D-Conn., and U.S. Sen. Chris Murphy, D-Conn., said in a joint statement.

“Dialing back submarine procurement in fiscal year 2025 threatens to slow progress in strengthening our nation’s submarine supplier base and workforce, making it more difficult to upgrade our submarine fleet and meet mounting global threats on the timeframe our national security requires,” they added.

Even with the specter of proposed cuts, Courtney said Electric Boat will not change its hiring goals for the year. The company hired more than 5,300 people in 2023 and plans to grow its workforce with more than 5,000 hires again for 2024.

It is not the first time lawmakers in Congress have pushed back on similar budget requests. Courtney said they confronted the same issue in 2013 with former President Barack Obama as well with former President Donald Trump’s budget proposal released in 2020.

“I don’t want to downplay [restoring the number],” Courtney said. “This requires a lot of effort because it’s trying to move money back into that line item, [which] is a lot of money. But we have done it.”

Other CT priorities intersect with Biden’s budget

While lawmakers flagged concerns about sub production, many of the Connecticut delegation’s other priorities were part of Biden’s budget, including restoring the federal child tax credit to monthly payments and new initiatives to lower housing costs.

The budget would bring back the expanded child tax credit to 2021 levels that was part of pandemic relief legislation that expired at the end of that year. The enhancement increased the rebate up to $3,600 per child under age 6 and $3,000 per child age 6 to 18, depending on annual income.

In January, the U.S. House passed a larger tax bill that includes a smaller boost to the child tax credit along with tax breaks for businesses. U.S. Rep. Rosa DeLauro, D-3rd District, voted against it and has been advocating for the full expansion that would resume larger monthly payments.

“By proposing historic investments in child care, lowering drug prices and health care costs, increasing access to affordable housing and helping people access higher paying jobs, President Biden is focused on helping the middle class and working Americans,” DeLauro, who is ranking member of the Appropriation Committee, said in a statement.

On housing, Biden’s budget includes funding to increase inventory, new tax credits to help with mortgages, and programs to help afford down payments. His administration proposed two new tax credits of up to $10,000 to encourage current homeowners to sell starter homes and another $10,000 for first-time home buyers. In terms of rental assistance, he would provide funding to help those in foster care aging out of the system as well as low-income veteran families.

The budget would also create a new program to make child care more affordable for families who make up to $200,000 a year, protections for Medicare and Social Security, and an increase in taxes for larger corporations. But many of these proposals will not go anywhere and face steep hurdles in a divided Congress.