To revitalize American shipbuilding and grow our Navy, we must expand orders of warships

OPINION:

The “big, beautiful” reconciliation bill passed by the House and now with the Senate includes $150 billion in defense spending. This is an outstanding opportunity to gain escape velocity from normal defense budget processes and buy and build above what we would have otherwise.

In defense circles, the shipbuilding portion of this bill has garnered significant attention since President Trump made it clear that revitalizing shipbuilding and the U.S. Navy is one of his biggest national security priorities. The reconciliation bill does a good job of funding auxiliary ships and amphibious warfare ships, both of which are critical. It also funds, at a very high level, potentially promising but operationally untested unmanned surface vessels.

However, for the manned warships that will be fighting wars for the foreseeable future, the reconciliation bill funds only two destroyers, one submarine and zero frigates. If the goal is to expand the size of the Navy’s surface fleet and make it more lethal, a third destroyer, a second submarine or a couple of frigates, with at least one at a new, second shipyard, ought to be funded through the reconciliation process as well.

Unfortunately, it seems likely that some of these ship orders will not be in addition to those that Congress would have bought anyway in the next few National Defense Authorization Acts and that Congress may use these ship orders as an excuse to fund other projects in the regular defense budget. If this is the case, the total number of warships in the Navy will not grow and the stagnation will continue.

Opponents of dramatic increases in procurement orders will say the industry is not ready to handle these orders. They will say there will be delays and that the government should invest in expanding infrastructure at the shipyards and clearing the shipbuilding backlog before buying more ships.

This does not deal with the reality of shipbuilding and how it is financed. Backlogs and predictable orders are the foundations on which infrastructure and workforce investments are planned and made. As such, it would make a lot more sense to buy larger numbers of warships in bulk to send a massive demand signal to industry and incentivize shipbuilders to pay for infrastructure and labor on their own. Block buys often reduce costs overall.

Private-sector companies build American warships and operate American shipyards. When they have a steady demand signal that incentivizes them to do so, these companies are perfectly capable of attracting capital to invest in infrastructure and labor.

Focusing on paying for infrastructure and not buying many more ships than would have been funded ignores basic economic principles. If followed, it will result in a Navy that is about the same size as or, more likely, smaller than the one we have now, well into the 2030s.

Of course, new ship orders, which send a strong demand signal, could also be funded through the fiscal year 2026 National Defense Authorization Act, and they should be. Unfortunately, recent history has shown that this will be a difficult battle, as the procurement of warships tends to be more controversial than, say, the ever-expanding list of white papers and centers of excellence in the research and development budget.

Every year for the past few years, the congressional authorization and appropriations committees have had monthslong, often heated debates about how many ships to order. Usually, a ship or two gets cut (at best, the minimum is maintained), and the Navy either stays the same size or shrinks and critical infrastructure investments and workforce growth are further deferred.

For that reason, supporters of Mr. Trump’s shipbuilding goals should look to get as many new warships funded through reconciliation or some other novel method, such as a naval act with a separate block buy of ships. At a certain point, if you want more ships, you have to buy more ships, and it may be a very long time before Congress again has the opportunity that reconciliation offers to revitalize the American shipbuilding industry and expand the number of warships in the U.S. Navy.

• Wilson Beaver is a senior policy adviser for defense budgeting at The Heritage Foundation.