June 2, 2010: The U.S. Navy has shrunk by 20 percent in the last decade, to a force of 280 ships. The main reason is the high cost of new ships, to replace those that are wearing out and being retired. In the next decade, the fleet is expected to shrink another 20 percent, again because Congress refuses to provide enough money to replace older ships (only about $14 billion a year, at most, is provided for new ships, and this is expected to shrink.) New ships cost, on average, $2.5 billion each. This is made possible because of six billion dollar destroyers, seven billion dollar subs and eleven billion dollar carriers. This is offset somewhat by $1.7 billion amphibious ships and half billion dollar LCS (a little, controversial, ship design).
The U.S. Department of Defense leadership has concluded that the current mix of ships, and naval strategies they support, cannot be sustained. It's not like this sort of thing has not happened before. This would be the third time in a century that the naval world was transformed by new technology. A century ago, the new "all big gun" battleship design had made all existing fleets obsolete. At the same time these new battleships appeared, so did aircraft. Three decades later, the aircraft carrier made the battleship obsolete. Now cruise missiles , UAVs and all manner of new sensors, software and electronics are threatening the aircraft carrier. If you go back and read the popular and professional media at the time of the last two transformations, you will note a lot of uncertainty about whether it was really a transforming moment. That is the case now, but the issue is heating up because the current carrier-centric navy is simply unaffordable. This includes the large amphibious ships (which carry helicopters and vertical takeoff aircraft, and look like carriers.)
The future of the navy is still being debated, but meanwhile, the fleet is fading into something else, and something smaller, no matter what is done. This does not mean that 70 years of American naval domination will end any time soon. The U.S. fleet is still larger than the next twelve largest fleets combined. In terms of naval combat power and capability, the U.S. still possesses most of what is available on the planet. What is rapidly changing is the cost of maintaining these capabilities, and the willingness of Americans to pay for it. The Department of Defense leadership is calling for a reexamination of how the naval domination is used, possible alternative approaches, and new ideas in general.