WEB EXCLUSIVE: Q&A With Adm. Karl Schultz, Commandant of the Coast Guard

Adm. Karl Schultz, the commandant of the Coast Guard, speaks during the 2021 State of the Coast Guard Address in San Diego March 11, 2021.

US Coast Guard Photo

Like the other armed services, the U.S. Coast Guard is ending the calendar year dealing with COVID-19 issues along with the perennial problem of not having a 2022 budget in place because Congress hasn’t passed a Department of Homeland Security spending bill.

For Adm. Karl Schultz, leader of the Coast Guard, dealing with the continuing resolutions is nothing new. He spoke to National Defense magazine Editor in Chief Stew Magnuson Nov. 20 on the sidelines of the Halifax International Security Forum about the budget and a range of other issues. The following Q&A has been edited for clarity and brevity.

I'm going start with the same old question I have to ask every year about a continuing resolution. But the analysts are predicting that this year’s budget delay might last longer than previous ones. How is that affecting the Coast Guard?

We haven't had a normal budget year in some time, even when the Defense Department got a normal budget a couple of years back in the 2019 budget. We ended up having a shutdown there for 35 days without pay. So that was pretty palpable for us.

The CR expires Dec. 3. I’m reading about many different scenarios where they may do another short term CR that takes us deeper into December. There are rumors of a full year CR.

For an operating organization like the Coast Guard, there are limitations on new starts [for programs] and things like that. We've actually conditioned our thinking because we've had so many unpredictable starts to the fiscal year where we do very little contract maintenance or shipyard repair work in the first quarters, sometimes even into the second quarter. We haven't had any annual budgets sometimes until February, so that's not ideal. And we're in a competitive market for shipyard availability — we don't spend the kind of money the Navy does — yet we need some of the same yards. So this is challenging for us. 

One sort of upside is that we got some two-year authorities for our maintenance that allow us to be a little more agile there. We’ve got to get those renewed. That's not a standing authority. But I will tell you for an organization, not starting the fiscal year with a budget, being under a CR is suboptimal. The 2022 budget that the president proposed for us is a solid budget that builds on 2021. I would like to see the budget enact those things … [The proposed budget for] 2022 puts us on a trajectory to be the Coast Guard the nation needs.

You mentioned new starts. Are any of those at risk if the CR goes longer?

Because of how we think through this, there are no new starts this fall that are at risk under the current circumstances. We hope to do a recompete for the Offshore Patrol Cutter in the spring or early summer of 2022. We're going to award the Waterways Commerce Cutter’s detailed design and construction contract, which is up to 30 boats that replace an aging fleet of up to 35 river tenders and construction tenders. The oldest is almost 75 years old. So those are important acquisitions, milestones, procurements that will occur toward the end of spring, mid-spring, late spring. So right now, that's a little bit of a condition from our experience of not having a normal start to the fiscal year that we push most of those kind of big, big procurement decisions and announcements to March and beyond.

What if a CR extends into March or later?

The full year CR, I think if we're ending up in that kind of a scenario, then we're working with the Congress on anomalies and things like that. So I would tell you, the Homeland Security appropriation committees in the House and Senate, they understand our challenges. We have been able to historically work the anomalies. We need to still get the business done. But it just takes your attention off of other priorities that the Coast Guard faces. It takes our attention off of building the 2023 budget …  And then there are various supplementals — all the different bills that are out there now like Build Back Better is hanging out there. Then how do you execute on the recent infrastructure bill? … For an organization like the Coast Guard, getting a budget on time or early in the fiscal year is much more advantageous.

You mentioned shipyard availability, which kind of brings me to another question on COVID-19. How did that affect last year? Were there any issues with the labor force?

 I think the [program] that had the most challenges is VT Halter with the Polar Security Cutter that was still finishing up detailed design work. There's a lot of international collaboration. … It's an international consortium of partners that are doing things with Canadians, the Finns. Some of those things that lend themselves to in-person detailed design kind of work got waylaid a little bit. … So I would say that's probably the acquisition that was most adversely impacted. … We've been waiting for this Polar Security Cutter for a long time. I think it will be cutting steel sometime early in 2022. And I think once you start cutting steel, you're hopefully off to the races. The contracted acceptance date for that ship has slipped into 2025. And that's a function of this [COVID] piece and a couple of engineering changes that we're looking for here.

As for the vaccine mandate, how is that going with your personnel and contractors?

I just I just saw an article this morning that [Huntington Ingalls Industries] in Mississippi announced that they weren't mandating vaccinations. But they seem to be managing building ships. I sort of say that's not in my swim lane of concern down here. I have a workforce down there that interfaces with our shipbuilders, the project resident office, our folks there are vaccinated. So, we will make sure we take our appropriate precautions in that environment.

Vaccinations writ large back in the Coast Guard, I think we've eclipsed 95 percent of the active force that is vaccinated with at least one shot, I think 93.5 percent. We've got somewhere less than 2,000 folks, a portion which have religious accommodations, medical accommodations, We're working through those. Our reserve force is 85 percent vaccinated. The reserve aren't in every day. They're a little harder to reach. But we've been really closing that gap fast. And then now we're working like all the other organizations with federal employees and our federal employees. It's tricky capturing that data from the workforce, but initial indicators are we're going to be north of 80 percent or 83 percent as we get all the folks enrolled, and then it's just about closing the data. [Nov.] 22 is the first real target date that pops up for federal employees, which is next week. So that will start to shape behaviors of those that are unvaccinated even more.

What happens to those who don't have an exemption and just absolutely won’t comply with the vaccine mandate?

We are trying to educate. We're trying to take a values-based approach. I would like to not lose a single Coast Guard [member]. That may be delusional, but I think we're going to continue to try to educate. I don't have a formal “no later than day” right now. The guidance we put out was this past Monday, Nov. 15 that basically said the window for applying for an exemption, for religious exemption, is the 30th of this month. And we also indicated that we are now starting to process those religious exemptions. I think we're under 1,000 of those. So I think once we understand the timing, we got to do due diligence on all those. I think if you look around the other services, what I've seen so far, I'm not sure I've seen many, if any, religious exemptions granted. But that said, we will review each one. We have a process for that it starts with a chaplain and it goes up through our human resources directorate. 

So we got some work ahead of us. But I think as we as we hone down that group and figure out where we're at, I think we're going to be in pretty good shape. I'm hoping it's a small number. Then, ultimately, if a uniformed member elects not to be vaccinated, there could be a choice that could potentially take a separation from service and general separation. We're sort of holding fire on those sort of final acts. And I think the service knows we're serious. I think the service knows that is the potential end state. We're trying to close that remaining gap of about 2,000 or less through education, through engaged leadership.

Let's get back to the Polar Security Cutter. How many have been authorized by Congress now?

The program of record is three. The first two are fully funded through Congress, which is a great story. And the 2022 budget has some monies towards long lead material. So I think that's a strong signal that both sides of the aisle are committed to building out the program. I've been having a conversation for most of my tenure that we really need a minimum of six icebreakers. Of that six, three will be Polar Security Cutters. We'll have a hot production line, I hope that conversations is really about more than three Polar Security Cutters, but we're also talking about maybe something a little less than a medium icebreaker. We've done some work at the behest of the last National Security Council in the Trump administration that has played forward for this administration. They seem very interested. So, I think we're having the right conversations about a fleet of maybe six or nine that can work in the high latitudes both the High North and down in Antarctica.

So now you're thinking nine icebreakers?

My talking point was a 6-3-1. I said a minimum of six, right? And then a minimum of three of that needed to be heavy breakers — Polar Security Cutters — and one was not. ... The good news is we're going to be starting construction on one pretty soon here.

Subsequent to that I've tried to evolve the conversation to say, we did some analysis work — and in the Antarctic — you don't need year-round presence down there. You probably need to be down there six- or seven-tenths of the year to do the McMurdo breakout and maybe pay attention to treaty inspection work.

In the High North in the Arctic, we've been predominantly Pacific based. We've been up off the Alaska Arctic … but I think what we really need long term is two in the Arctic. So you got a Pacific Arctic breaker, you got an Atlantic breaker out there for almost year-round coverage. To do that, you need a fleet ,and then also to do the south work you need a fleet that's a minimum of six — probably six-plus — seven, eight, nine.

What’s the latest thinking on arming them?

We built the ship with the space, weight and power to have those conversations. I think the United States Coast Guard, the United States government through the Arctic Coast Guard Forum, through the Arctic Council, we still champion a free, open, safe, environmentally sound Arctic.

So I think the conversation about armament … I've sort of held fire on really speaking to the armaments in the Arctic right now because I think we really want to keep the Arctic a free and open space that's about the environment. And it's about safety. And so in the Arctic Council, or the Coast Guard Forum, we try to go back to the charters which takes you down environmental response, if you had spills, disasters, if you have rescue type cases. … That's what we're trying to focus on. I'm not saying that conversation about arms in the future is closed. But it's not sort of front and center of my sight picture right now.

Are you monitoring the Army's future vertical lift initiative to modernize your helicopters? 

We will pay attention to what DoD is doing with future vertical lift. But when we get into that, you're probably talking the middle part of the next decade, 2032, 2033 or 2034.

While the troubled Deepwater Integrated Systems program came to an end years ago, today it seems like you’re on track to recapitalize all the ships that program called for. Comments?

The backbone of [ship recapitalization] is the Offshore Patrol Cutters. There are 25 of those. So our No. 1, the Argus, is about 60 percent complete down in the Eastern Shipbuilding Group. So when you say, "Hey, we're kind of there," I would tell you we're in a really good spot on the National Security Cutter that was going to be eight. Congress saw fit to buy us three more, so 10 and 11 are under construction. That was to replace 12 high endurance cutters, Arguably, it's hard to have 11 ships replacing 12 ships, but at the end of the day, they're more capable ships and eight was the program record. We're very pleased with the three additional. I think that's the right place for us.

Fast Response Cutters was going to be 58 total. We worked with the Congress for six to replace the six we have forward deployed in Bahrain and in patrol forces in Southwest Asia. That program of record is fully funded, including those six. That's on a very strong trajectory.

But the OPC is a big part of that. So three ships are under construction. The fourth is in the 2022 budget and long lead [procurement] for the fifth. So I think there's a strong interest.

We have a recompete here in 2022 on that. We had an initial award of nine ships plus two options for Eastern, and then Hurricane Michael struck the shipyard within 10 days of the contract being awarded. Eastern looks to be building a good ship. They're coming back to the table to bid on the recompete. But we scoped down that nine plus two [options] to four just to make sure they had the workforce. That region got hit hard and there was a lot of competition for skilled labor. Some of the Air Force facilities at Tyndall got damaged, but Eastern has found the workforce. The quality looks good. So, I think they're going to be a very viable competitor — along with others — and we're going to make a decision in the spring on that.

So that's pretty much the whole Deepwater program of record?

I don't mean to refute that. I'm just saying everything's in there. We're executing. I would just say the 25-ship OPC is a big part of that. That's kind of like the skeleton, and the arms and legs are the other things. We’re talking about a 25-ship program of record. I think we're going in a good direction.

A big topic here this weekend at the Halifax International Security Forum is China. The Coast Guard is best known as participating in the so-called “home game,” but you do have assets a little farther out. What are you doing farther out in the Pacific?

We've been a Pacific Coast Guard for a century and a half-plus. If you’re talking near in Pacific, the Eastern Pacific on any given day there are three to five patrols, vessels, major cutters, doing counter-narcotics work down there.

We've got law enforcement attachments on allied ships and Navy ships. So I think your focus is take us a little farther out to the Indo-Pacific region. That's the question. We just placed three new Fast Response Cutters in Guam. … These are brand new 154-foot, 26 crew members, long legs, stern launch boats, really enhanced [command, control, communication, computer, intelligence, surveillance and reconnaissance] capabilities. So they're going to be game changers out there. We've teamed them with the buoy tenders out of Guam and Hawaii. So you use a little bit of a mothership operation. They bring logistics, fuel, additional food supplies. And we've gone out and done multi-weeks of the 30-plus-day patrols.

We got in touch with the Federated States of Micronesia, the outlying areas, and I think that's a competitive space. When the Coast Guard shows up, we train the host nations. They, like us, are concerned about protecting their [exclusive economic zones]. … We also push some NSCs out to the Oceania region.

And then out to the Indo-Pacific, a little more East China Sea, South China Sea, we've been sending National Security Cutters over there on a sort of episodic battle rhythm. The Monroe, which is a National Security Cutter, just returned about two weeks ago from a 102-day deployment there.

Over her 102 days, she exercised a [memorandum of agreement] with Taiwan that was signed in late March. We did some training with the Taiwanese Coast Guard. She did some operational engagement, training, partnering, building capacities with the Japanese Coast Guard. She sailed with the Australian carrier and two other Australian combatants for multiple day engagement with our Aussie partners there. She did work with the Philippine Coast Guard. … We also worked with the Indonesians. … We did a lot of capacity building and joint operations, interoperable training. The Monroe also did a Taiwan Strait [passage] along with a [Navy] DDG. They did a two-ship 180 degree reciprocal Taiwan Strait transit. They did a lot in 102 days. That includes in-transit time. … When I look at that region, or I surveil that region, I see a lot of nations that want to do Coast Guard things. They want to protect their [exclusive economic zones]. and do law enforcement. … They have search-and-rescue requirements. They look at us as a preferred partner. So I think for us over there, you know, the ASEAN partners are key partners. We're helping them. We've sent some excess defense articles. Vietnam has ... have high endurance cutters, former high endurance cutters, or Sri Lankans just got a high endurance cutter. They have a former 210-foot cutter. So it sort of pieced it all together. … It's helping them build the capacity. It's going over and training and exercising with them. And I think at the end of the day, you hope the allies and partners are really basically firming up their resolve to push back against the China threat.

The U.S. military is really focused on the joint all-domain command and control (JADC2) concept that calls for a network to autonomously link sensors and shooters in a mix on manned and unmanned systems. Is the Coast Guard involved in this effort?

We have some smart comms, technical folks that are plugged into that. We're watching JADC2. … I would say we are not deep in that. But ultimately, when I sail a National Security Cutter to the Indo-Pacific, we need Link 16 connectivity. We need to be able to fight the ship. We need to be able to plug and play with a DDG, a cruiser or a carrier. We need to be able to do that with allied partners. So we're clearly interested. I would say we're following it a little bit. We're paying attention. We're making sure the Coast Guard's voice as a member of the Joint Force team is in the conversation. But I will tell you, we’re not on the leading side of that at all. But in the cognitive awareness, let's stay plugged in so we can bring capacity to the fight.

Have you done any operational tests with the Navy or anything on this?

Not specific to JADC2. We've been invited to their demonstrations. There was some stuff at the leadership level that I've been invited to. We're invited to the war games, exercises. … But I would tell you in terms of the tech side of it, we're probably a couple of rings out from the center of gravity. They're just making sure. When it comes to operating jointly, we know what's going on, and we're part of the discussions.

Topics: Budget, DOD Budget, Defense Department