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House CR includes MEADS funds — to cover termination costs
The government funding measure that passed in the House on Wednesday included $348 million for the Medium Extended Air Defense System (MEADS), but the money is not going to fund the program, appropriators say.
House Appropriations Chairman Hal Rogers (R-Ky.) said that the Appropriations bill follows the ban on funds for the missile defense program that were included in the 2013 National Defense Authorization Act (NDAA).
MEADS has long been on the congressional chopping block, but in past years the Pentagon has been able to prevent attempts to kill the program, a joint missile defense venture between the United States, Italy and Germany.
This year the Defense authorization bill signed by President Obama included a restriction on funding MEADS.
The Pentagon has warned Congress against cutting funds for MEADS because it could lead to penalty costs for breaking its contract with Italy and Germany, and it would also leave the military without anything to show for its investment thus far.
“Unilateral U.S. withdrawal and termination of the program would ensure the Department and its international partners receive nothing for our MEADS investment, at a cost comparable to completing the restructured Proof of Concept effort,” then-acquisitions chief Ash Carter wrote to Senate Armed Services Carl Levin (D-Mich.) in 2011.
The German and Italian Defense chiefs wrote to the Pentagon in January warning that contract termination costs would be paid for the by United States if its actions kill the program.
“We assure you, that this is not negligible. In a first estimate the current U.S. position results in an economic damage to Germany and Italy of more than $400 million,” the Italian and German defense ministers wrote.
MEADS International, the venture behind the missile defense system that’s comprised of Lockheed Martin and several European defense firms, said in a statement that the final verdict on MEADS was not assured.
“The FY'13 funding process is still ongoing and we remain hopeful that the U.S. will meet its [Memorandum of Understanding] commitment to the program and fund the last year of the Demonstration of Capabilities,” the group wrote. “MEADS provides next-generation air and missile defense capabilities that address the current threat environment and reduce demand for manpower and airlift.”
An Appropriations aide said that when the committee included funding in its bill last year, it was not intending to take a position on continuing the MEADS program. The money was included in order to either fund the program or to pay for termination costs, the aide said, because the Armed Services Committees had not finished the NDAA at that point.
The continuing resolution passed by the House included $348 million for MEADS and $53 million for the program's U.S. office.
The issue is not settled yet, as the Senate still has to pass its measure to fund the government through the end of the fiscal year, which it’s looking to do next week.
The White House had listed MEADS as one of the reasons it threatened to veto the NDAA last year, but Obama signed the bill in January.
