After debate over procurement last year, the Virginia-class submarine program is on track to maintain its two-per-year cadence for the upcoming fiscal year.
But U.S. Rep. Joe Courtney, D-2nd District, and other lawmakers warned that there are funding gaps in the White House budget request.
Courtney is seeking to fill in that gap as Congress hashes out its annual defense policy bill that authorizes, among other things, shipbuilding needs. That money could help Groton-based Electric Boat and others address the growing costs of materials and backlogs in production as the submarine industry tries to meet the long-term goals of both the Navy and a U.S. submarine deal with Australia.
To shore up support for two nuclear-powered vessels in fiscal year 2026, Courtney proposed an amendment for an additional $1 billion that went into the House’s version of the National Defense Authorization Act. The House Armed Services Committee easily passed it in a voice vote in mid-July, though the bill is still working its way through Congress before it’s likely finalized later this year.
“We worked with the Navy. We basically went through 24 different line items in the Navy’s budget to basically scrub and squeeze funds to pay for that billion dollars,” Courtney said, noting it got done in time for the committee markup of the NDAA last month. “I think there’s real urgency to make sure that the program keeps the momentum up and gets the right production cadence.”
Courtney, the ranking member of the Seapower and Projection Forces Subcommittee, said the shortfall comes amid the administration’s two-pronged approach to funding the procurement of two Virginia-class for the new fiscal year: paying for one boat through the standard budget process and covering the other through the budget reconciliation process used to pass President Donald J. Trump’s “big beautiful bill.”
That bill, which was signed into law in early July, included $4.6 billion in funding for a second boat for fiscal year 2026. An initial version of the legislation had the money designated for fiscal year 2027.
Now that Congress has moved on to the NDAA and regular appropriations process, they are sorting out the funding for the other submarine. The White House’s FY26 base budget request sought about $816 million for standard procurement plus a few billion for advanced procurement of long lead-time materials for future submarines.
To address what was viewed as inadequate funding for two submarines, the House committee ultimately approved the NDAA by combining the $816 million with the $1 billion from Courtney’s amendment for standard procurement for FY26.
Lawmakers in both parties took issue with the Trump administration’s approach to funding the nuclear-powered submarines and the way it relied on the special budgetary process to pass Trump’s tax bill that also included substantial defense funds.
Senate Armed Services Committee Chairman Roger Wicker, R-Miss., expressed dismay over the process during a June hearing with Navy officials, a few weeks before Congress approved the reconciliation bill.
The shipbuilding component in the White House’s defense budget request for FY26 is $20.8 billion, which lawmakers pointed out was well below the nearly $37 billion sought last year under the Biden administration.
Wicker said the Navy’s shipbuilding request “falls far short to protect our country” and “game[s] the budget in anticipation of budget reconciliation, which was intended as a supplemental, not a substitute.” Since that hearing, the reconciliation bill has become law and the White House released its FY26 defense budget plan in full.
Navy officials said they are committed to getting the industry back on track to carry out the service’s shipbuilding needs and bolster capacity. U.S. Navy Secretary John Phelan said he visited 10 shipyards since he took the helm, including trips to Electric Boat locations in Groton and Quonset Point in Rhode Island back in April.
“For too long, we’ve allowed our shipbuilding industry to erode, hollowing out the very capacity we need to maintain credible naval deterrents. That must change. Rebuilding our maritime industrial base is not just a matter of economic policy, it is a national security imperative,” Phelan said at the June hearing before the Senate Armed Services Committee. “We do need to act with urgency, and this will take a whole-of-government approach to rebuild our capacity and expertise.”
The Navy and Electric Boat declined to comment on the FY26 Virginia-class funding.
Courtney similarly raised concerns about a “fragmented” budget process for the Virginia-class program split between reconciliation and the base budget bill. But he credited the bipartisan work on the House’s NDAA for addressing the issue.
He also pointed out that the director of the White House’s Office of Management and Budget will have discretion over the sub funding covered in the reconciliation bill since that agency oversaw the process.
“It just created more confusion about the normal budget process, and that’s why it was such a scramble, because no one really had any clarity about the budget,” Courtney said. “And we still kind of don’t already, because we still haven’t completed NDAA and we still haven’t completed the appropriations process.”
“Once the reconciliation bill got passed, at least there was some clarity that you could go into the programs and try to clean up the gaps that were exposed,” he continued. “There’s definitely going to be more work to be done to make all these pieces sort of fit together.”
But between the funding through the various legislation — reconciliation, the NDAA and defense appropriations legislation — and his amendment, Courtney argued the Virginia-class program is “very secure.”
“Honestly, for FY26, there was never a question that there was going to be two subs whether there was a budget reconciliation bill or not,” he said. “And it just shows there’s just huge consensus about the fact that there was going to be two subs in FY26.”
His eastern Connecticut district includes Electric Boat’s Groton shipyard and many of the suppliers that work with the General Dynamics company. Electric Boat locations in Groton and Quonset Point, R.I., handle much of the Virginia-class program, along with Huntington Ingalls Industries’ Newport News Shipbuilding in Virginia.
But these sub costs are changing because some of the contracts were authorized before the pandemic, and prices for materials have grown. Plus, some of the subs under construction are different models and require more to build them.
Courtney noted some of the newer vessels will feature a payload module that includes more missile tubes and thus are bigger and more expensive. Ships built over the last two decades displace about 7,800 tons submerged, while the Virginia Payload Module surpasses 10,000 tons.
“It’s new design and new size, and so that’s where the cost issues arise,” he said.
Wicker also raised concerns at the June hearing that the upcoming Columbia-class submarines are also underfunded. Electric Boat is also the lead contractor on the nuclear-powered ballistic missiles vessels to replace its Ohio-class submarines. It is similarly working with Newport News Shipbuilding on the construction.
The House’s NDAA would authorize incremental funding for one Columbia submarine, which Courtney said “is the way to keep the lights on.” The GOP’s reconciliation didn’t include any funding for that program.
The goal of the Navy is producing two Virginia-class and one Columbia-class a year. But the actual production rate has been below that for Virginia, around 1.2 boats per year since 2022, according to a March report from the Congressional Research Service.
That has resulted in a backlog, though the report said the Navy and the sub industry are aiming to get the production rate to two a year by 2028 and eventually up to 2.33 boats a year. If they can hit those markers, that’ll allow contractors to keep up with the pace of Virginia-class procurement. And it’ll help meet the needs of AUKUS, the trade agreement between Australia, the United Kingdom and the U.S., so Australia can buy between three and five Virginia-class submarines starting in the early 2030s.
While it passed out of both House and Senate committees this month, the annual defense policy bill is still in the early stages. The NDAA authorizes defense spending, but lawmakers will still need to go through separate appropriations bills to allocate such funding.
In the coming months, Congress is likely to use another short-term bill, or a continuing resolution, to keep the government running. While that will keep most federal funding at current levels, lawmakers can use what’s known as anomalies to make adjustments and provide more funding in certain cases.
Last December, lawmakers passed a short-term funding bill that included $5.7 billion in emergency funding for the submarine industrial base. In the fiscal year 2025 defense policy bill, Congress provided full funding for one Virginia-class submarine and “incremental” funding for a second.
Courtney commended the Navy at a June hearing for releasing the submarine industrial base funds approved last year. He said it played a role in helping to resolve contract issues between Electric Boat and the Marine Draftsmen’s Association, whose membership was preparing to go on strike in the spring.
He said it “boost[ed] wage rates of metal trades workers in southern New England by 30% over a five-year span.”
The Connecticut Mirror/Connecticut Public Radio federal policy reporter position is made possible, in part, by funding from the Robert and Margaret Patricelli Family Foundation.
This story was originally published by the Connecticut Mirror.
