WASHINGTON — The US Navy is absorbing a $7 billion reduction in fiscal 2017 funding – about 3.5 percent over last year's plan, according to newly released budget documents. The service is reducing the number of ships it's buying while adding more aircraft, and uniformed personnel also are being cut, up to as many as 6,400 sailors below previous forecasts.

The Navy Department's top line drops to $152.9 billion in baseline funding against last year's projection of $159.9 billion. The 3 percent dip below projection is planned to last just this year, rising in 2018 to $159.7 billion. Projected baseline funding drops again to about $158 billion in 2019, to $155.7 billion in 2020 and up to $157.5 billion in 2021.

Overseas contingency operations (OCO) funding remains steady, $9.5 billion in 2017 against $9.4 billion last year, and includes six aircraft – two F/A-18 Super Hornets and four RQ-21 Blackjack drones for the Marines.

The Navy is planning on a uniformed force of 322,900 sailors in 2017, down from 327,300 authorized in 2016 and last year's forecast of 326,500 for 2017. Personnel levels continue well below previous forecasts through 2021 – 322,200 in 2018, down 6,000 from 328,200; 324,400 in 2019, down 5,400 from 329,800; 323,600 in 2020, down 6,400 from 330,000; and 323,100 in 2021 – the year added to this year's Future Years Defense Plan (FYDP).

The personnel reductions appear to stem from two major developments, the permanent elimination of a tenth carrier air wing and four aviation squadrons, and a new request to take seven cruisers out of service in 2017 to undergo modernization – a major change to previous congressional directives.

Carrier Air Wing 14 already was temporarily deactivated in 2013, a move taken in conjunction with the temporary lowering of the number of active carriers from 11 to 10, necessary because the elderly carrier Enterprise was at the end of her service life before her replacement, the George H. W. Bush, could enter service. The wing had not deployed since a 2011 cruise aboard the carrier Ronald Reagan.

A Navy source said the decision was made due to fiscal pressures, and claimed the service can meet operational requirements with nine active wings.

Four aircraft squadrons are being deactivated or canceled, the Navy confirmed, with another shifting from sea to ground-based operations. The squadrons being deactivated are Strike Fighter Squadron 15 (VFA-15) from Naval Air Station Oceana, Virginia, flying legacy F/A-18 Hornet aircraft; Carrier Airborne Early Warning Squadron 112 (VAW-112) out of Naval Base Ventura, California, flying E-2C Hawkeyes; and Helicopter Sea Combat Squadron 15 (HSC-15) from Naval Air Station North Island, California, flying MH-60S helicopters. The planned standup of Helicopter Maritime Strike Squadron 76 (HSM-76) will be canceled.

Electronic Attack Squadron 134 (VAQ-134) from Naval Air Station Whidbey Island will transition to become a land-based expeditionary squadron.

Four aircraft squadrons also will be deactivated, the source said – one VFA strike fighter squadron, one VAQ electronic attack squadron, one VAW carrier airborne early warning squadron, and one HSC helicopter sea combat squadron.

The service is also seeking to modify its controversial cruiser-modernization plan, needed to upgrade 11 cruisers to remain effective into the 2030s. Four ships have already been funded – two in 2015 and two in 2016 – and Congress has instituted a so-called "2-4-6" directive, where only two are budgeted per year, each ship can remain out of service for no more than four years, and no more than six may undergo modernization at any one time.

Under the new scheme, the Navy wants to fund all remaining seven ships in 2017, a scheme that would mean that by the end of that year all 11 ships would be out of service. The move, a Navy spokesperson said, would save $926 million across the FYDP and overall would save more than $3 billion in operations and maintenance, including money saved while the ships were out of service.

The Navy notes that the request is not consistent with existing law and needs Congressional approval.

It is not clear from early budget documents what the status of three LSD landing ship docks is, although they are also part of modernization plans.

In shipbuilding, the Navy is asking for seven new ships, essentially down one from last year's plan, when Congress brought two ships scheduled for 2017 forward into 2016. The service reduced its ship buy by one Littoral Combat Ship, asking for two ships instead of last year's plan for three or Carter's December direction to buy just one. The LCS plan through the FYDP now reflects Carter's direction, one ship per year form in 2018-2020 with two in 2021.

Asked Tuesday why the change to two LCSs from Carter's December direction to request only 1, Deputy Defense Secretary Robert Work noted that Carter "is very flexible on these points. The Navy said in terms of competition it would help if both [shipbuilding] yards had a ship in '17, both could compete. It doesn't change the 40" -- the total number of LCSs Carter directed to be built - "it was just a slight change in profile."

Two Virginia-class submarines, two Arleigh Burke-class destroyers and one LHA(R) amphibious assault ship round out the 2017 shipbuilding request – all previously scheduled.

Shipbuilding plans through the FYDP remain mostly steady, with two submarines and two destroyers planned for each year through 2021. In that year, however, only one attack submarine is planned, but the first Ohio-Class Replacement Submarine makes its debut. The next carrier remains in 2018, but the first T-ATS salvage ship tug has been pushed back from 2017 to 2018. The T-AO(X) fleet oiler remains in 2018, and the LX(R) amphibious ship replacement continues as planned in 2020.

The overall number of manned and unmanned aircraft planned to be purchased for the Navy and Marine Corps in 2017 remains at 94. The most significant aviation plan change is the insertion of 14 F/A-18 Super Hornets planned for 2018, a move directed by Carter that reverses an earlier Navy decision to end procurement of the Boeing-built aircraft.

Buys of the F-35C carrier versions of the Joint Strike Fighter show no overall changes until 2020, when the planned purchase of 12 aircraft jumps to 18, with 24 forecast for 2021. A total of 64 F-35Cs are planned through the FYDP. Buys of the F-35B Marine Corps variant rise by two aircraft in 2017 to 16, but remain as planned in later years, with a total of 97 through 2021.

Procurement of the MV-22B Osprey drops by two aircraft per year through 2020, with six aircraft per year for the Navy's new carrier onboard delivery version.

A key aviation development is indicated under the research and development portion of the Navy's funding request, where the CBARS Carrier-Based Aerial Refueling System supplants the UCLASS Unmanned Carrier-Launched Airborne Surveillance and Strike as the new unmanned jet intended to operate from aircraft carriers. The Navy is asking for $89 million for CBARS R&D -- down dramatically from the $435 million for UCLASS in 2016. Navy officials have yet to talk publicly about CBARS, an apparent compromise between advocates for strike or intelligence as the primary mission of the new drone.

Weapons procurement remains fairly steady, although the Navy now plans to buy 100 Tactical Tomahawk cruise missiles in 2017, a change from last year's plan to buy none. The move is in line with a congressional plus-up in 2016 from the 100-missile Pentagon request to 149 missiles. Procurement of the missile is to end, however, after 2017.

Procurement of the SM-6 fleet air defense and ballistic missile defense missile continues at 125 weapons per year. Annual buys of the AMRAAM air-to-air missile increase between nine and 22 weapons per year through 2020. Purchases of the AGM-88 Advanced Anti-Radiation Guided Missile take a major hit, dropping by 43 weapons in 2017, 20 in 2018, 114 in 2019 and 163 in 2020.  Buys of the LRASSM Long Range Anti-Ship Missile end after 2019, with the Navy zeroing out 28 weapons planned for 2020.

The service is also reducing the planned buys of the over-the-horizon surface-to-surface missile for the LCS, holding at 110 weapons per year from 2018 through 2021.

Work, at Tuesday's press briefing to present the budget, spoke about the decision to reduce the overall LCS buy from 52 to 40 ships.

"LCS is a perfect example of what [Carter] meant by focusing on shape rather than size," Work said.

"This is not an indictment of the LCS. If we didn't like the ship we would stop buying it." Rather, he said, reducing the number of ships "allowed us to put more money into torpedoes, P-8s, tactical ammunition. It's more about achieving that balance."

Adm. John Richardson, chief of naval operations, issued a statement shortly after the budget was publicly released.

"As described in 'A Design for Maintaining Maritime Security,' our maritime system continues to expand and become more heavily used by the United States and the world as a whole," Richardson said in the statement. "The global information system is increasingly pervasive, enabling a greater multitude of connections between people and at an ever-falling cost of entry. At the same time, the rate of technological creation and adoption continues to increase exponentially. These three forces and their interplay have profound implications for the United States Navy and our budget submission begins a broader shift in response to these changes.

"Our four lines of effort are aimed at reinvigorating our naval power, strengthening our people, enhancing our partnerships, and, most importantly, learning faster. These priorities are captured through our investments in both present and future capabilities, and most importantly in our sailors, Navy civilians, and their families.

"Today's budget environment is forcing tough choices but must also inspire new thinking as we seek to achieve balance," Richardson continued. "The margins of victory are razor thin, and only the team that fights for every inch wins. Our budget request supports this urgent business."

Staff writer Meghann Myers contributed to this story.

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