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Letter from June O'Neil, Director Congressional Budget office to John McCain including report: SUBMARINE PROGRAM ISSUES [i] (July 1995)

handle is hein.congrec/cbo9834 and id is 1 raw text is: CONGRESSIONAL BUDGET OFFICE June E. O'Neill U.S. CONGRESS Director WASHINGTON, D.C. 20515 July 28, 1995 Honorable John McCain Chairman Subcommittee on Readiness Committee on Armed Services United States Senate Washington, D.C. 20510 Dear Mr. Chairman: On May 15th of this year, I provided you with preliminary findings from the Congressional Budget Office (CBO) study of issues related to submarine programs now under review by the Congress. In that earlier letter, I addressed the near-term savings that would result from a decision not to fund completion of the third Seawolf submarine. After briefly reviewing those savings, the accompanying attachment focuses on the implications of consolidating construction of all nuclear-powered ships at a single shipyard. CBO's analysis suggests that such a consolidation could result in savings of between $2.4 billion and $3.7 billion (in 1996 dollars) over the life of the new attack submarine program, which is currently slated to acquire some 30 ships between 1998 and 2020. That amount is less than one contractor claims could be saved through consolidation, but more than the Navy's own estimate. Consolidation could also lead to a somewhat smaller shipbuilding work force: CBO estimates that at most some 3,300 shipyard jobs are at issue, and the reduction resulting from consolidation might be substantially less. Essential skills for producing nuclear-powered ships-- many of which reside in the suppliers and subcontractors to the shipyards--would be retained whether or not production was consolidated. CBO is continuing to explore this issue. If we can be of further assistance to you, please do not hesitate to call on me. Sincerely, June E. O'Neill ENCLOSURE cc: Honorable William Cohen, Chairman Honorable Edward M. Kennedy, Ranking Minority Member Subcommittee on Seapower AN IDENTICAL LETTER IS BEING SENT TO HONORABLE JOHN PORTER.

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