The Trump administration's nominee for secretary of the Navy says the military service branch is at a "crossroads" and must course correct to expand and improve its maritime capabilities.

"Extended deployments, inadequate maintenance, huge cost overruns, delayed shipbuilding, failed audits, subpar housing and, sadly, record-high suicide rates are systemic failures that have gone unaddressed for far too long. And frankly, this is unacceptable," John Phelan told the Senate Armed Services Committee on Thursday.

While Phelan has not served in the military or in government, committee Chairman Senator Roger Wicker said Trump turned to an "experienced businessperson" to solve the Navy's massive industrial problems, especially in shipbuilding.

"If we threw a zillion dollars at the Department of the Navy today, we couldn't build the ships because we don't have the industrial base. We've got to fix that," Wicker said.

China's military, according to Republican Senator Dan Sullivan, is on pace to have more than 400 ships in its navy this year and will likely have about 120 more ships than the United States by 2030. The U.S. currently has about 300 ships.

"Every shipbuilding delay, every maintenance backlog and every inefficiency is an opening for our adversaries to challenge our dominance. We cannot allow that to happen," said Phelan.

He said that if confirmed he would incentivize industry while learning from "yesterday's fights" to develop a force for the future. Phelan also said the Ships for America Act, a bipartisan bill that aims to establish national oversight and support for the U.S. shipbuilding industry, would help industry better "telegraph demand" for ships.

The Navy typically receives about 30% of the defense budget. Republicans and Democrats in Thursday's hearing criticized what they saw as financial mismanagement in the Navy and in the defense industry, a concern that Phelan said he would investigate while developing plans to tackle shortfalls in the Navy's military acquisitions.

"When I've looked at all these different weapons programs, it seems like the next missile costs more than the first missile, so you have no economies of scale,” Phelan told lawmakers. “That is a prescription for bankruptcy."

Independent Senator Angus King said the U.S. was falling behind its adversaries in technological developments such as hypersonics and directed energy.

Hypersonic weapons can travel at more than five times the speed of sound and can maneuver to avoid detection and countermeasures. Directed-energy weapons cause damage with highly focused energy, not solid projectiles. Examples include lasers and particle beams.

Following the deadly Oct. 7, 2023, Hamas terrorist attack on Israel, Houthi rebels in Yemen launched dozens of drone attacks against commercial and military ships in the Red Sea and Gulf of Aden. The U.S. Navy used missiles valued at hundreds of thousands or even millions of dollars apiece to destroy the drones.

"Directed energy is about 50 cents a shot, once you have the device there," King said.

Hamas and Hezbollah are U.S.-designated terrorist organizations.