Cost of Trump’s Battleships Soars to $275 Billion, CBO Says

CBO battleship chart
CBO
By Yuval Rosenberg and Michael Rainey

Good evening! On this date 165 years ago, President Abraham Lincoln signed the Revenue Act of 1861, which imposed a flat 3% annual tax on individual incomes over $800 - the first federal income tax, introduced to help fund the Civil War effort. It included no enforcement mechanism and failed to generate much revenue before being followed the next year with a more progressive tax law that was also more effective because it created the Commissioner of Internal Revenue, a predecessor to our Internal Revenue Service responsible for ensuring the collection of taxes.

Before we get to the day's news, check out these unprecedented new images of the surface of the sun. Science is fun!

Trump's 'Golden Fleet' Battleships Could Cost $275 Billion

President Trump has called for the construction of a "golden fleet" for the U.S. Navy, anchored by new Trump-class nuclear-powered battleships. According to an analysis published Wednesday by the Congressional Budget Office, building 15 of the new warships over the next 30 years would cost an estimated $275 billion.

The first ship, which the Trump administration says will deploy a variety of new technologies, some of which are still under development or do not yet exist, will cost about $23 billion, while the rest of the ships would cost an estimated $18 billion apiece.

CBO estimates that the first ship could take eight years or longer to build, although Trump said last year that he thinks it will take less than half that. In the meantime, Trump has altered a key specification of the ship, changing its propulsion system from gas turbine to nuclear power, thereby increasing the estimated cost of each ship by about $8 billion. Trump has also said that he wants to build as many as 25 of the battleships, and CBO estimates the cost of building the larger number at $455 billion.

Questions about battleships: Trump said he was inspired to build new battleships by "Victory at Sea," a documentary about naval warfare in World War II that was broadcast by NBC in 1952-1953.

"I used to watch 'Victory at Sea,'" Trump told a gathering of military leaders last year. "I love 'Victory at Sea.'"

Some military experts have questioned the desirability of building battleships, which many naval experts see as an outdated military technology. The United States hasn't laid down a new battleship since 1944, during World War II.

However, the new battleships would be quite different from the 1940s version, at least in terms of technology. The Navy's shipbuilding plan calls for a massive ship with a displacement of 35,000 tons or more, stretching upwards of 880 feet in length, capable of cruising at more than 30 knots, with missiles and lasers instead of conventional guns as the main weapons.

"The battleship's main battery would include missile cells for antiship, antiair, and land-attack missiles and, presumably, the ship's nuclear cruise missiles; it would also include launchers for hypersonic Conventional Prompt Strike (CPS) missiles," CBO says. "Other elements would include large lasers, a rail gun, and a variety of defensive systems such as guns, smaller missiles, decoys, and optical dazzlers intended to counter and disrupt unmanned aerial systems."

Some of those technologies may not yet exist in 2028, when the first ship is scheduled to start construction, CBO noted. In that case, CBO says "the Navy could still build the ship, reserving space and power for their later installation."

Uncertainty for the fleet: Given its enormous expense and industrial and design requirements, it's not clear that Trump's "golden fleet," which also includes new destroyers and frigates, will ever be built. And since the Trump battleship is the furthest away from an executable design, it may be the least likely to actually hit the waves or get anywhere close. The drive to develop it, though, could still be very costly. As CBO notes, "Shipbuilding programs that start before a ship's design is well defined often encounter serious cost growth and delays."

There are certainly budgetary concerns about the new Trump battleship. Sen. Jeff Merkley, the senior Democrat on the Budget Committee who requested the CBO analysis, questioned the cost of the program.

"At a time when families are struggling to afford groceries, gas, health care and child care, Congress cannot throw hundreds of billions of dollars at Trump's 'Golden Fleet,' including plastering his name across a new battleship," Merkley said in a statement. "While we continue to see too many Pentagon programs burdened by cost overruns, delays, and unrealistic promises that fail to meet reality, Congress cannot afford to commit to another massive military boondoggle that will only succeed in filling the coffers of the military-industrial complex."

Merkley said he would push to eliminate the project.

Senators Clash Over How to Fix Social Security

The Senate Finance Committee held a hearing on Wednesday to discuss approaches to addressing Social Security's financial challenges, most notably a new bipartisan plan called the PROMISE Act. It got heated at times.

Social Security provides benefits to more than 75 million Americans, including more than 59 million people age 65 and older. But Social Security's trustees said in their latest annual report that the program's Old-Age and Survivor's Insurance Trust Fund will be exhausted in late 2032, which would result in a 22% reduction in benefits unless Congress acts.

That PROMISE Act proposal would have an independent, bipartisan advisory board make recommendations for reforms and introduce a bill that would be required to extend the solvency of Social Security's trust funds for at least 50 years. The plan also lays out the process by which Congress would consider the bill, potentially amend it and bring it to a vote. It was introduced last month by Republican Sens. Bill Cassidy, John Cornyn, Thom Tillis, and Alan Armstrong along with Angus King, an independent, and Democrats Dick Durbin and Tim Kaine.

"Here is our chance to agree on a bipartisan process to rescue Social Security this year," Durbin said in rolling out the plan. "Our bipartisan proposal opens Congress to debate this issue in a transparent, fair, and bipartisan way. We were elected to solve problems-and there's no greater problem than the solvency and future of Social Security."

The PROMISE Act was greeted with optimism from budget watchdogs, who said that they hoped it would jumpstart a process to shore up Social Security's finances.

"This legislation will help Republicans and Democrats debate and craft a credible, bipartisan solution that keeps Social Security sustainable for decades," said Jessica Riedl, a budget expert at the Brookings Institution, a center-left think tank.

Chuck Blahous, a fiscal policy expert at the libertarian-leaning Mercatus Center, praised the bill for not dictating outcomes. "It creates a mechanism for forward progress, and that's what is needed more than anything else," he said when the bill was introduced.

But the proposal also met with some criticism from some on the left who warned that it could open the door to an unelected commission recommending Social Security cuts or privatization.

"The Democratic Caucus must make it abundantly clear that under no circumstances will we support legislation that cuts Social Security benefits, raises the retirement age, reduces Cost-of-Living Adjustments (COLAs), or privatizes this essential program," Sen. Bernie Sanders said in a statement Tuesday.

Sanders, a Vermont independent, and some Democrats have instead called for raising the cap on the payroll tax that funds Social Security, set at $184,500 for 2026, so that it applies to incomes above $250,000.

"At a time when the wealthiest people in America are becoming much wealthier, asking them to pay the same percentage of their income into Social Security as teachers, nurses, firefighters, and construction workers is not a radical idea. It is common sense," Sanders wrote in a letter to Senate Democrats.

Is a bipartisan commission needed? Republican Sen. Mike Crapo, the chair of the Finance Committee, noted at Wednesday's hearing that the last comprehensive effort to improve Social Security's solvency took place more than four decades ago and led to reforms being enacted in 1983. "Those reforms were preceded by high-level bipartisan negotiations, informed and facilitated by the work of the National Commission on Social Security Reform, or what was known as the Greenspan Commission," Crapo said. "That process demonstrated the value of creating a forum where policymakers could work through difficult issues and build consensus on a bipartisan basis."

Sen. Ron Wyden, the top Democrat on the committee, countered that an unaccountable commission - one "that will rubber stamp benefit cuts," such as an increase in the retirement age - is not the answer.

"The concept being discussed today would act as a shortcut for Republicans to carry out their long-sought goal of slashing Social Security benefits for retirees and raising taxes on middle class folks," Wyden said. "Instead of 'talking about talking,' this body should get to work on finding a resolution to the Social Security solvency challenge and having that debate in public view."

Democrats argued that they have already released plans to address the Social Security shortfall.

"We've got bills. You can look at them. Kick the tires. Take your potshots," Sen. Sheldon Whitehouse said. "We have legislation that will make Social Security solvent for as far as the actuarial eye can see without cutting benefits. Where is the Republican proposal? Where is it? It doesn't exist. They want to go into a back room and get wheeler deals done that allow for benefit cuts and things like that that they don't want to own."

Both Crapo and Cassidy insisted that the hearing was meant to consider options and discuss the necessary process. "If the other side of the aisle thinks that they've got a great idea, they should want this process," Cassidy said. "To have it mischaracterized and misrepresented as Republicans cutting things is false."

Cassidy has also proposed the creation of a sovereign wealth fund, separate from the Social Security trust funds, to be used to make up for the Social Security shortfall. He insisted, though, that the PROMISE Act was simply about setting up a process for considering a variety of proposals.

"Let's be good senators," Cassidy said. "Let's vote for a bill that sets up a process in which anybody's proposal can be considered, heard, and voted on and chosen. This is not about a solution. This is about a process to arrive at the solution."

The bottom line: Social Security is about six years away from insolvency, and while lawmakers may be talking about possible solutions to avoid benefit cuts, there's no sign yet that they're ready to take action. AARP Executive Vice President Nancy LeaMond told lawmakers that they should get busy. "The history of special commissions is littered with very good intentions and failed results," she said. "They typically lack the clout, the power and the jurisdiction to do this hard work."

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