Budgets, Ships, and the CBO, with Eric Labs - on Midrats
...follow the money...
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Summary
In this episode of Midrats, Sal and Mark engage with Eric Labs, a senior analyst at the Congressional Budget Office (CBO), to discuss the complexities of shipbuilding costs, the role of the CBO in providing independent estimates, and the challenges faced by the U.S. Navy in maintaining and expanding its fleet. Eric shares insights on the differences between CBO and Navy cost estimates, the impact of maintenance on overall ship costs, and the importance of a skilled labor force in shipbuilding. The conversation also touches on the historical context of shipbuilding budgets, congressional appropriations, and the future of naval forces in the face of evolving defense needs.
Dr. Eric Labs is Senior Analyst for Naval Forces and Weapons at the Congressional Budget Office in Washington, D.C. He specializes in issues related to the procurement, budgeting, and sizing of the forces for the Department of the Navy. He received his doctorate in political science from the Massachusetts Institute of Technology and graduated from Tufts University, summa cum laude, in 1988. He has worked for the Institute for Foreign Policy Analysis in Cambridge, Massachusetts and, from 1994 to 1995, as a Visiting Scholar at the Center for International Security Studies at the University of Maryland. Dr. Labs has been with the Congressional Budget Office since 1995.
Chapters
00:00: Introduction to the CBO and Eric Labs
03:01: Understanding the Role of the CBO
06:01: Cost Estimation Approaches in Shipbuilding
08:54: Historical Context of CBO Estimates vs Navy Estimates
12:04: Challenges in Shipbuilding Cost Estimates
15:09: The Impact of Maintenance on Ship Costs
18:00: Congressional Budgeting and Shipbuilding Appropriations
20:48: Labor Force Challenges in Shipbuilding
23:58: Future of the U.S. Navy Fleet and Shipbuilding
27:05: Conclusion and Future Considerations
Outstanding episode. One framing that really came through for me, especially in Eric Labs’ answers, is that the CBO isn’t best understood as a “budget referee” or a Navy counterweight, but as an institutional memory node inside the federal system.
Program offices rotate, strategies reset, requirements churn, and narratives evolve. The CBO doesn’t. Its comparative advantage isn’t pessimism, it is CBO’s persistence. By aggregating historical ship costs, industrial base behavior, and long-run sustainment realities, the CBO forces the system to confront second-order effects that no single program, PEO, or sponsor is incentivized to model, or even capable.
In that sense, the CBO plays a critical role in the distributed innovation process within government: not as an innovator or advocate, but as the mechanism that enforces learning across time. Fleet debates that ignore sustainment, workforce inertia, or industrial throughput aren’t “bold,” they are incomplete. The CBO’s work doesn’t kill programs; it sets the boundary conditions under which they can remain credible.
This episode is a valuable reminder that affordability isn’t an accounting exercise—it’s a strategic constraint, and honest arithmetic is a prerequisite for serious naval planning.
Nicely done!
Interesting, thank you.