Skip to Content Facebook Feature Image

Trump turns to outsider to shake up Navy, but his lack of military experience raises concerns

News

Trump turns to outsider to shake up Navy, but his lack of military experience raises concerns
News

News

Trump turns to outsider to shake up Navy, but his lack of military experience raises concerns

2024-11-28 05:45 Last Updated At:05:50

WASHINGTON (AP) — President-elect Donald Trump's nominee to be secretary of the Navy, John Phelan, has not served in the military or had a civilian leadership role in the service. While officials and defense experts said the Navy is in sore need of a disruptor, they cautioned that Phelan's lack of experience could make it more difficult for him to realize Trump's goals.

Trump late Tuesday nominated Phelan, a major donor to his campaign who founded the private investment firm Rugger Management LLC. The Trump transition team did not respond to a request for comment on his qualifications. According to his biography, Phelan's primary exposure to the military comes from an advisory position he holds on the Spirit of America, a non-profit that supports the defense of Ukraine and the defense of Taiwan.

Not all service secretaries come into the office with prior military experience, but he'd be the first in the Navy since 2006. Current Secretary of the Army Christine Wormuth similarly does not have prior military service. She, however, has spent her career in a host of defense civilian positions.

The appointment comes at a critical moment for the Navy, which has been stretched thin with deployments around the world and must contend with a shrinking fleet even as the naval forces of its main rival, China, are growing. Trump has campaigned on expanding the Navy and would need to fight bureaucratic inertia to do so. But it’s uncertain whether a secretary with no military experience — either in uniform or as a defense civilian — would be well-positioned to lead that effort.

“It will be difficult for anyone without experience in the Pentagon to take over the leadership of a service and do a good job,” said Stacie Pettyjohn, a senior fellow and director of the defense program at the Center for a New American Security. “Services are sprawling organizations with distinct cultures, subcultures and bureaucratic interests, and where decisions are made through many formal processes. To change a service’s plans, one must understand this Byzantine landscape.”

Experts said Phelan's nomination reflects that Trump is seeking service branch heads who will not push back on his ideas — but that Phelan's lack of experience is likely to create issues and delays of its own, They say the Navy can't afford to lose time. One of the Navy’s biggest challenges is preparing for a potential military confrontation with China over Taiwan, a self-ruled island that China claims as its own.

" The stakes are high," said Brad Bowman, senior director of the Center on Military and Political Power at the Foundation for Defense of Democracies. “The success or failure in addressing key problems in the U.S. Navy over the next couple years may have a decisive effect on war and peace in the Taiwan Strait and elsewhere.”

Trump has called for a 350-ship Navy since his 2016 presidential campaign, but he experienced first-hand the difficulty in realizing that goal, given the challenges to shipbuilding and the erratic and often delayed congressional budget process.

There are just under 300 battle force ships in the fleet — vessels that have a direct role in conducting combat operations.

“The Navy is stretched covering Europe, the Middle East and the Pacific. Strategists have wanted to pull back from Europe and the Middle East, but recent conflicts have prevented that,” said Mark Cancian, a senior adviser at the Center for Strategic and International Studies. “So the next secretary will have a shrinking fleet, expanded overseas commitments, and an uncertain budget environment.”

The Marine Corps has called for 31 amphibious warships to help it maintain a close-to-shore presence around the globe. The Navy regularly has had to extend the deployments of its aircraft carriers and escorting destroyers, for example, to respond to the unstable security situation in the Middle East.

Each extension can create rippling effects: Ships don’t get maintained on schedule, and forces get tired of the lack of predictability for their families and leave the service.

Service branch chiefs spend vast amounts of time not only responding to the White House but also appeasing members of Congress in frequent hearings on Capitol Hill, shaping budget requests, holding constant meetings on service member issues, attending industry conferences and filling speakers requests. That all requires a nuanced understanding of the service that a secretary is leading, because major change in any of the branches often involves a lengthy process to review directives and past policy. Any changes to the many weapons systems the Navy and Marine Corps need and pursue are subject to lengthy contract award challenges.

“The Navy’s problem here is money,” Cancian said. “Even if the defense budget goes up, there will only be a relatively small increase available for shipbuilding. (If) the budget stays steady or goes down, then the Navy will have a major problem. The fleet will continue to shrink."

Trump has signaled through multiple appointments, such as his selection of SpaceX founder Elon Musk to co-lead a nongovernmental Department of Government Efficiency, that he seeks to cut through red tape. But the service secretary can't do that without moving through Congress, which has produced many of those regulations and processes the military must follow.

“It might help that he has a personal relationship with the president. However, his lack of experience in defense and the Pentagon will hurt the Navy," Cancian said. "It will take him a while to learn the levers of power.”

The Nimitz-class aircraft carrier USS Abraham Lincoln is docked during a media tour in Port Klang, on the outskirts of Kuala Lumpur, Malaysia, Tuesday, Nov. 26, 2024.(Fazry Ismail/Pool Photo via AP)

The Nimitz-class aircraft carrier USS Abraham Lincoln is docked during a media tour in Port Klang, on the outskirts of Kuala Lumpur, Malaysia, Tuesday, Nov. 26, 2024.(Fazry Ismail/Pool Photo via AP)

U.S. Navy officers walk inside the USS Abraham Lincoln during a media tour in Port Klang, on the outskirts of Kuala Lumpur, Malaysia, Tuesday, Nov. 26, 2024.(Fazry Ismail/Pool Photo via AP)

U.S. Navy officers walk inside the USS Abraham Lincoln during a media tour in Port Klang, on the outskirts of Kuala Lumpur, Malaysia, Tuesday, Nov. 26, 2024.(Fazry Ismail/Pool Photo via AP)

Next Article

Stock market today: Losses for Big Tech pull US indexes lower

2024-11-28 05:28 Last Updated At:05:30

Technology stocks helped pull stocks lower on Wall Street Wednesday, handing the market its first loss in more than a week.

The S&P 500 fell 0.4%, even though more stocks in the index notched gains than ended lower. The loss snapped a seven-day winning streak for the benchmark index.

The Dow Jones Industrial Average fell 0.3%, its first loss after five gains. The Dow and S&P 500 remain near the all-time highs they set on Tuesday.

The Nasdaq composite, which is heavily weighted with technology stocks, fell 0.6%.

Losses for tech heavyweights like Nvidia, Microsoft and Broadcom were the drag on the market. Semiconductor giant Nvidia fell 1.2%. Its huge value gives it outsized influence on market indexes. Microsoft fell 1.2% and Broadcom finished 3.1% lower.

Several personal computer makers also helped pull the market lower following their latest earnings reports.

HP sank 11.4% after giving investors a weaker-than-expected earnings forecast for its current quarter. Dell slid 12.2% after its latest quarterly revenue fell short of Wall Street forecasts.

Gains for financial and health care companies helped temper the market's losses. Berkshire Hathaway rose 0.9% and Merck & Co. added 1.5%.

All told, the S&P 500 fell 22.89 points to 5,998.74, while the Dow dropped 138.25 points to 44,722.06. The Nasdaq fell 115.10 points to 19,060.48.

Traders also had their eye on new reports on the economy and inflation Wednesday.

The U.S. economy expanded at a healthy 2.8% annual pace from July through September, according to the Commerce Department, leaving its original estimate of third-quarter growth unchanged. The growth was driven by strong consumer spending and a surge in exports.

The update followed a report on Tuesday from the Conference Board that said confidence among U.S. consumers improved in November, but not by as much as economists expected.

Consumers have been driving economic growth, but the latest round of earnings reports from retailers shows a mixed and more cautious picture.

Department store operator Nordstrom fell 8.1% after warning investors about a trend toward weakening sales that started in late October. Clothing retailer Urban Outfitters jumped 18.3% after beating analysts’ third-quarter financial forecasts. Weeks earlier, retail giant Target gave investors a discouraging forecast for the holiday season, while Walmart provided a more encouraging forecast.

Consumers, though resilient, are still facing pressure from inflation. The latest update from the U.S. government shows that inflation accelerated last month. The personal consumption expenditures index, or PCE, rose to 2.3% in October from 2.1% in September.

Overall, the rate of inflation has been falling broadly since it peaked more than two years ago. The PCE, which is the Federal Reserve's preferred measure of inflation, was just below 7.3% in June of 2022. Another measure of inflation, the consumer price index, peaked at 9.1% at the same time.

The latest inflation data, though, is a sign that the rate of inflation seems to be stalling as it falls to within range of the Fed's target of 2%. The central bank started raising its benchmark interest rate from near-zero in early 2022 to a two-decade high by the middle of 2023 and held it there in order to tame inflation.

The Fed started cutting its benchmark interest rate in September, followed by a second cut in November. Wall Street expects a similar quarter-point cut at the central bank's upcoming meeting in December.

“Today’s data shouldn’t change views of the likely path for disinflation, however bumpy," said David Alcaly, lead macroeconomic strategist at Lazard Asset Management. "But a lot of observers, probably including some at the Fed, are looking for reasons to get more hawkish on the outlook given the potential for inflationary policy change like new tariffs.”

President-elect Donald Trump has said he plans to impose sweeping new tariffs on Mexico, Canada and China when he takes office in January. That could shock the economy by raising prices on a wide range of goods and accelerating the rate of inflation. Such a shift could prompt the Fed to rethink future cuts to interest rates.

Treasury yields slipped in the bond market. The yield on the 10-year Treasury fell to 4.25% from 4.30% late Tuesday. The yield on the two-year Treasury, which more closely follows expected actions by the Fed, fell to 4.22% from 4.25% late Tuesday.

U.S. markets will be closed Thursday for Thanksgiving, and will reopen for a half day on Friday.

A sign marking the intersection of Wall Street and South Street is shown in New York's Financial District on Tuesday, Nov. 26 2024. (AP Photo/Peter Morgan)

A sign marking the intersection of Wall Street and South Street is shown in New York's Financial District on Tuesday, Nov. 26 2024. (AP Photo/Peter Morgan)

FILE - People pass the New York Stock Exchange on Nov. 5, 2024, in New York. (AP Photo/Peter Morgan, File)

FILE - People pass the New York Stock Exchange on Nov. 5, 2024, in New York. (AP Photo/Peter Morgan, File)

People walk past the New York Stock Exchange on Tuesday, Nov. 26 2024. (AP Photo/Peter Morgan)

People walk past the New York Stock Exchange on Tuesday, Nov. 26 2024. (AP Photo/Peter Morgan)

A person walks in front of the Tokyo Stock Exchange building at a securities firm Tuesday, Nov. 26, 2024, in Tokyo. (AP Photo/Eugene Hoshiko)

A person walks in front of the Tokyo Stock Exchange building at a securities firm Tuesday, Nov. 26, 2024, in Tokyo. (AP Photo/Eugene Hoshiko)

Recommended Articles