Phelan: ‘The Era of Excuses and No Accountability Is Over’

This month, businessman-turned-Secretary of the Navy John Phelan testified before the House Appropriations Committee.

The testimony—which also included acting Chief of Naval Operations Adm. James W. Kilby and Commandant of the Marine Corps Gen. Eric M. Smith—reinforced key policy agendas aimed at cutting waste, increasing naval procurement, and promoting the “warrior culture” President Donald Trump’s administration has pursued under Defense Secretary Pete Hegseth and Elon Musk’s Department of Government Efficiency.

Phelan’s business-oriented mindset makes him well-suited to rid the Defense Department of both ineffectual spending and counterproductive diversity, equity, and inclusion initiatives—which do nothing to enhance America’s security.

In his testimony, he highlighted the need to rid the Navy of bureaucratic waste as part of a larger policy of rebuilding, reforming, and refocusing America’s Navy toward what matters: “readiness, accountability, and deterrence.”

This refocused approach is especially necessary given the increasing dominance of China’s shipbuilding industry, which constitutes a major security concern. Today, China fields the largest navy in the world, and while the U.S. still has technologically superior ships, quantity has a quality all its own. History provides numerous examples of the battlefield advantages of a larger number of relatively less advanced technologies.

If the U.S. hopes to deter Chinese aggression, it must increase its ship production—a tall order that will take years to accomplish. Today, our Navy has fewer than 300 ships—compared to more than 400 modern Chinese warships.

For years, The Heritage Foundation has recommended addressing China’s threat by building out the Navy’s fleet to include at least 400 ships. Balancing shipyard and budgetary realities, naval leaders have set a goal of 381 warships achieved by 2052—an aim that will require revitalizing America’s shipbuilding industry.

Trump has already sought to do this via his April 9 executive order aimed at restoring America’s maritime dominance. In that order, he highlighted the need to improve procurement and government efficiency, create shipbuilding financial incentive programs, and engage allies and partners to align trade policies.

Phelan’s testimony echoed this executive order, describing the rebuilding of the U.S.’ shipbuilding industry as a “top priority.” Specifically, the secretary emphasized partnership with the private sector, pointing to a desire “to pursue a more balanced and shared-risk philosophy with our private sector partners.”

Adopting a business-oriented approach, Phelan expressed his desire for the ships to be built on time and without delays, commenting, “We’re not writing checks for promises. We’re demanding results.”

These are bold words, and they express the bureaucratic overhaul that Trump has continually pursued to reindustrialize America’s defense base.

Such initiatives are critical if the U.S. hopes to remain secure and prevent war with China. Our lack of industrial capability has presented itself as a national security threat, and, if left unaddressed, the Defense Department’s overly bureaucratic structure will delay the production and procurement of new ships.

To fix this, the Navy will need to adopt an increased partnership with the private sector to increase ship procurement—a partnership that will require the U.S. government to play an active role in promoting production.

The private sector is skilled at effectively running industry, but it ultimately reacts to the market signals being sent by the government. If reforms and investments aren’t matched with a strong demand signal in the form of increased ship orders, they won’t have their intended effect.

The Heritage Foundation has put forward a number of policy proposals aimed at increasing defense industrial output—e.g., adopting output capacity-based grants, expanding the use of multiyear contracts, implementing full and immediate expensing for all capital investments, and increasing demand signal via block buys of warships.

All in all, Phelan is right to call for increased accountability in the Defense Department. That’s necessary to reindustrialize America’s defense industrial base. But ultimately, if the Navy and Congress want more ships, they’ll need to order more ships.

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