Do We Need to Bring Back the Navy Department?
Arthur Herman is Senior Research Fellow at the Civitas Institute, and author of Freedom’s Forge: How American Business Produced Victory in World War II. His newest book, Founder’s Fire: From 1776 to the Age of Trump, will be published by Center Street in April 2026.
Last month, the U.S. Navy celebrated its 250th anniversary, and rightly so. It is without doubt the most powerful military force on the planet. In honor of the occasion, President Trump witnessed a dazzling display of its awesome arsenal. The presidential review off Norfolk, Virginia included Nimitz-class aircraft carriers USS George H. W. Bush and USS Harry S. Truman with their FA-18 fighter wings. There was a sextet of Aegis guided missile destroyers and a Virginia-class nuclear-powered submarine, the deadliest class of fast-attack subs in the world.
Nonetheless, for all the celebrations and displays—which did not include the Navy’s super-advanced F-35 fighter—a nagging question remains. How decisive will these legacy systems actually be, if we find ourselves in a protracted conflict with our superpower rival, China?
Even more important, how far will these systems go in deterring China from committing to such a conflict, if the People’s Liberation Army (PLA) believes its vast anti-ship missile arsenal, hypersonic weapons, and electronic and cyber warfare capabilities—not to mention its fleet of warships, now larger than our own—give it the winning edge?
The answers to both questions might be encouraging. But exactly how our existing naval forces can offset the challenges China poses at sea cries out for more analysis and elaboration—as well as more funding and investment.
That in turn raises another question.
With the Department of Defense renamed as the War Department, its illustrious predecessor before 1947, is it time to turn the calendar further back, and restore an independent Navy Department?
Worries that the Navy, which had been such a decisive and dominating force during World War II, might lose its dominance in a services merger, cropped up at the very start of the debate about creating a unified Defense Department. The very first secretary of defense, James Forrestal—who had been an exceptional secretary of the navy during the war—was deeply worried about over-centralization of the services under the National Security Act of 1947. As Shyam Sankar and Madeline Hart point out in their forthcoming book, Mobilize: How to Reboot the American Defense Industrial Base and Stop World War III, Forrestal “vociferously advocated for maintaining the autonomy of the services and minimizing the influence of any centralized Office of the Secretary of Defense.”
The Navy’s leading admirals also worried that under unification they would be left out of any grand strategy planning, starting with nuclear strategy, and that the Navy would be reduced to an adjunct service to the Army and the newly established Air Force.
During Forrestal’s negotiations with the White House and the other services, he made sure that the new Defense Department had a looser, more “federated” structure than the centralizing merger that unification’s biggest advocates, including President Truman, had in mind. Still, in becoming just “one among many” under the National Security Act of 1947, and losing its separate cabinet-level status, the Navy lost more power from unification than any other military service.
Of course, having an independent Navy Department with a separate budget is no guarantee of excellence or strategic success. During the interwar period, that same Navy Department let the Washington and London naval treaties slash the number of its capital ships. It took President Franklin D. Roosevelt—himself a former assistant navy secretary—to rouse the Navy from its sloth and slumber. Along with Congress, he forced the department to start building new capital ships, including the aircraft carriers that went on to win decisive victories over Japan at Coral Sea and Midway.
In the 1980s, Navy Secretary John Lehman was able to successfully push his 600-ship navy building program that helped to tip the balance of the Cold War, despite operating under the constraints imposed by the unified Defense Department. But after the Cold War, shrinking defense budgets inevitably meant a shrinking Navy. While America in the 1990s and 2000s conducted ground campaigns in Europe and the Middle East, the dearth of a peer naval competitor made it impossible to justify maintaining the Lehman-era armada. When President Barack Obama took office in 2008, the Navy had shriveled from its Reagan-era peak of 594 active ships in 1987 to just 282—a fleet smaller than before World War I. During Obama’s second term, it had dwindled to a low of 271 deployable vessels.
At the same time, the Navy was increasingly relegated to serving as the Uber or taxi service for the Army and Marines during two Gulf wars and in Afghanistan—even as China was building its own version of a navy worthy of a global superpower.
The task of rebuilding a 355-ship Navy began under the first Trump administration and continues today as part of the renamed War Department. Nonetheless, thinking about restoring a separate Navy Department with its own budgetary authority and appropriations schedule might make sense, if it does the following three things.
First, a separate budget ought to promote more competition among defense contractors, lowering costs and boosting productivity. Right now, the War Department is virtually a monopsonist—the sole buyer for defense-related goods and services. This gives the Pentagon enormous power to dictate the prices and terms of contracts. The bracing breath of competition, including with the other services, could force important changes in how we contract and build the warships we need to keep a strong Navy.
That includes having more shipyards that service the U.S. Navy. As recently as the late 1970s, there were 22 large shipyards in the United States. Today only a handful actively build or service U.S. naval vessels. Yet according to Dredgewire, “There are over 300 shipyards which engage in ship repairs and are capable of constructing ships but are not actively engaged in shipbuilding activity.”
A separate Navy budget could be the point of entry for reviving the American shipbuilding industry. Right now its role in that industry has virtually shriveled away, even as the Navy itself is shrinking.
Only five large ocean-going vessels were built in U.S. yards in 2024. The Navy itself managed to deliver exactly one attack submarine in 2024. The 2025 budget set aside money to build ten new warships, with the Navy retiring nineteen—a net loss of nine ships.
By contrast, the PLA Navy is growing rapidly and is now the largest in the world by number of warships. According to a recent CSIS report, a single Chinese shipbuilder built more commercial vessels by tonnage in 2024 than the entire U.S. shipbuilding industry has built since the end of World War Two. Navy sources have concluded that China has 232 times the shipbuilding capacity of the United States, for commercial and naval vessels combined.
If the United States ever intends to close the gap, speeding the entry of new competitors for Navy business without having to worry about sharing costs with the Army, Air Force, or Space Force, could go a long way in raising capacity.
Closing the naval gap also means bringing in new technologies to speed design and construction, as well as new weaponry. A separate Navy Department could also encourage new tech companies to devote more time to raising their technical and industrial standards for the Navy’s operations and capabilities—for example, using Artificial Intelligence/Machine Learning or quantum sensing in new ways. It could also speed the inevitable transition to uncrewed systems for naval aviation and surface or undersea vessels.
Second, a separate Department of the Navy should be focused on winning as well as deterring wars, and on implementing a proactive and aggressive strategy with regard to China, not only in the South China Sea and Taiwan Straits but also in the Arctic.
Third, a hypothetical Department of the Navy could be empowered to see naval and maritime dominance as two sides of the same coin. From a peak of 1,288 ships in 1951, by 2020 only 180 ships of more than 1,000 gross tons remained active in the U.S. Merchant Marine. Since the 1600s, history has shown that there can be no naval dominance without maritime dominance. China understands this, which is why it has built more than 200 times the shipbuilding capacity of its superpower rival, the United States—a capacity in which the line between building commercial and naval vessels is deliberately blurred.
In short, the Navy needs to be the fulcrum for restoring American maritime power. A separate Navy Department might be the way to do it—might even be the only way to do it.
That is, if the Navy’s leadership can fully commit to supporting the Trump administration’s current effort, particularly within the Office of Management and Budget, to restore our national shipbuilding heritage and capacity. I believe the Navy’s current leadership, including Secretary John Phelan, are able to do that.
I’ve been a fan of the Navy for a very long time. In 2009, I helped to write the commemorative volume for the commissioning of the USS New York (LPD21), whose bow was made with steel from the Twin Towers. My book Freedom’s Forge has found fans in Navy ranks and among shipbuilders—not to mention others worried about the future of American sea power.
Maybe the three goals I’ve set out can be realized without carving out a separate Navy Department. But if that’s the only route to get there, I say: let the carving begin.
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