Opening Statement (As Prepared)
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Thank you, Chairman Kelly.
And thank you to our witnesses – Assistant Secretary Seidle, Dr. Labs, Ms. Oakley, and Mr. O’Rourke – for being with us today. Dr. Seidle, it was great to meet with you last week to discuss today’s topic.
At last year’s Seapower subcommittee hearing on shipbuilding, I noted that our subcommittee had perhaps its most pressing task in years – this remains unchanged. In the present national security environment, our sea services are central to securing true peace. In every combatant command, the demand for Navy ships and submarines outstrips supply. Whether in Northern, Southern, Europe, Africa, Indo-Pacific, or Central Command, the message is the same: we need a capable fleet of subsea and surface vessels to provide effective deterrence to protect the international rules-based order. Today’s hearing will focus on the challenges our domestic shipbuilding industry must overcome to achieve this goal.
I want to emphasize at the outset that there is strong, bipartisan agreement on confronting the issues facing our domestic shipbuilding industry. This subcommittee has long focused on this task and Members have worked across industry and the Department seeking to improve the capacity of critical suppliers and our shipyards. Over the last decade, this subcommittee has been the originator of unique authorizations and funding strategies, such as the National Sea Based Deterrence Fund (NSBDF), which has proven to be a successful tool for the Navy to increase efficiency and reduce costs as we recapitalize our fleet of?ballistic?missile submarines. We also originated the Vessel Construction Manager (VCM) concept that utilizes commercial style contracting and enabled the Maritime Administration (MARAD) to affordably procure the National Security Multi-Mission Vessels (NSMV) for the State Maritime Academies.
In 2018, this subcommittee created a new line item: the “Submarine Industrial Base”, or SIB, that has grown from a one-year appropriation of $20 million to a total of $6.6 billion up until FY24 and an additional $4 billion for FY25. The SIB today has been instrumental in expanding the workforce, facility, and supply chain capacity to grow the submarine industrial base capacity. Whether it is new factory space in Virginia, Alabama, New England, or Philadelphia, new equipment for small machine shops, or expanding career and technical high schools and community: real tangible progress has been made.
We must continue to pursue innovative ideas such as these to accelerate the delivery of Navy warships. One such idea is the Shipbuilding and Accountability and Workforce Strategy, or SAWS, that the Navy devised last year. I have been supportive of this effort and understand that DoD may still be considering it as an option to improve submarine construction and output. I look forward to hearing from Assistant Secretary Seidle whether this is indeed still an option and, if not, what the alternatives are.?
It is critical that we, as Congress, support education and training in the metal trades for young adults and secondary and grade school students to provide meaningful pathways to enter the shipbuilding workforce. In the 2nd?District of Connecticut, education and training pipelines have been successfully attracting skilled workers, overcoming the impact that COVID had on retention and production rates. In 2023, 5,300 new workers were added to shipyards in Rhode Island and Connecticut, with another 4,000 in 2024. These pandemic impacts cannot be overstated. However, we are finally rounding the bend on these effects, with an expected delivery of three Virginia-class submarines in the 12-month period between December 2024 and 2025. We have also seen a faster turnaround in PSA, or post-shakedown availability, indicating an increase in not only the cadence of delivery, but quality too.
The President last week stated that his administration will be prioritizing Navy shipbuilding efforts. That is welcome news. The creation of the new shipbuilding office in the White House to focus on this goal is a good first step. I have and will continue to work across the aisle to expand our shipbuilding capacity to face a deteriorating maritime threat environment. Although, some very big warning flags are still looming with prominent voices in the Administration. The current director of the OMB – Russell Vought – was a chief architect of “Project 2025” which sought to fully repeal the Jones Act. Given the importance of this legislation to our domestic shipbuilding industry, it is concerning that the President has given no public assurances on the matter.
Further, the President’s back-and-forth threats to impose steel and aluminum tariffs on our allies, such as Canada and Australia, are completely counterproductive to shipbuilding. These tariffs will increase the cost of contracts paid by the Government – and the taxpayer –and delay commercial contracts, inevitably risking shipyards business. Even without the tariffs currently active, the price of steel continues to climb, affecting not only shipbuilding, but manufacturing at large. The trade publication – “Steel Industry News” – reported on February 20th?that the impeding section 232 tariff reinstatements are driving double digit increases for the price of steel – both domestic and imported.
As we wait for the text of the President’s shipbuilding executive order, I will be looking to protect our domestic interests by protecting the Jones Act and reinforcing our shipbuilding capacity.
With that, I yield back.