On May 14, 2025, U.S. Navy Secretary John Phelan testified before Congress, lambasting the state of the U.S. Navy, calling it a “national security crisis.” He said the Navy suffers from years of poor management, cumbersome bureaucracy, and budget mismanagement, leading to significant ship construction delays and cost overruns. “Too often, taxpayer dollars are wasted while the backlog of maintenance and vital modernization efforts grows,” Phelan told the House Armed Services Committee.

Phelan’s comments come amid growing concerns in the Pentagon and Congress about the health of the U.S. Navy, which faces competition from China’s rapidly modernizing navy. According to a March 2025 report from the U.S. Government Accountability Office (GAO), key ship programs, including the Constellation-class frigates and Zumwalt-class destroyers, are 18 to 24 months behind schedule. The cost of the Gerald R. Ford-class nuclear-powered aircraft carrier program has increased 27 percent from initial estimates, to $13,3 billion per ship. The Virginia-class submarine program is also facing $1,2 billion in cost overruns due to supply chain issues and a shortage of skilled labor at shipyards.

Phelan emphasized that the current problems go beyond readiness. “This is not just about whether our ships are ready to fight. This is a national security crisis that threatens our ability to project power and defend U.S. interests in the Indo-Pacific, the Atlantic, and the Middle East,” he said. He pointed to the backlog of infrastructure upgrades at naval bases such as Norfolk, Virginia, and Pearl Harbor, Hawaii, where docks are not equipped to handle the newest ships. About 40 percent of destroyers and cruisers require urgent repairs, and the average wait time for maintenance has risen to 14 months, according to the Navy.

The U.S. Navy’s woes are compounded by its shrinking ship count. As of May 2025, the U.S. Navy has 294 combat-ready ships, well below the 355-ship target set in 2016. By comparison, the Pentagon estimates China has about 370 ships, including 140 major warships, and it continues to grow its fleet at a pace that outpaces the U.S. In 2024, China commissioned three new Type 055 destroyers and two nuclear-powered submarines, while the U.S. has launched just one Arleigh Burke-class destroyer.

Phelan also criticized the Littoral Combat Ship (LCS) program, which he called a “costly failure.” The ships, which cost about $500 million each, have proven unreliable in high-intensity combat and require constant repairs. According to the GAO, six of the 35 LCS ships have been retired early due to technical problems. Congress, in turn, cut funding for the program, redirecting funds to the more advanced Constellation frigates.

The situation is complicated by domestic politics. The administration of President Donald Trump, which took office in January 2025, promised to increase the Navy’s budget to $250 billion by 2027, but those plans are facing resistance in Congress, where Democrats are demanding cuts to military spending in favor of social programs. In April 2025, Congress approved a $2026 billion Navy budget for fiscal year 230, $10 billion less than the Pentagon’s request. That forced the Navy to suspend construction of two support ships and scale back its carrier modernization program.

Phelan also pointed to the personnel shortage that is hampering the fleet’s operations. According to the Navy, the shortage of sailors is about 2025 as of May 12, with the turnover rate reaching 18% per year. Low wages and difficult conditions are driving away young professionals, despite bonuses for re-signing contracts. The secretary has proposed increasing funding for training programs and raising wages by 15%, but these measures have not yet been approved.