Senate appropriators reduce funding for Lockheed's F-35 Joint Strike Fighter

Senate defense appropriators on Tuesday significantly slashed funding for the F-35 Joint Strike Fighter — the Pentagon’s largest and highest-profile program. 

Sen. Daniel Inouye (D-Hawaii), the Senate’s top appropriator and chairman of the Defense panel, said Tuesday that his committee decided only to fund the production of 32 F-35 fighter jets, 10 fewer than the Pentagon requested for fiscal 2011. The new fiscal year begins Oct. 1. 

Inouye on Tuesday said that some of the recommendations in the new Pentagon bill, including F-35 funding, would be considered “tough measures.” 

“We consider them prudent,” Inouye said on Tuesday. “I would inform my colleagues that the Defense Department has not yet awarded a contract to build the 30 aircraft which Congress funded nearly a year ago.” 

Lockheed Martin, the contractor for the F-35, and the Pentagon are still negotiating a fixed-price contract for 32 early-production F-35 aircraft (30 for the United States and two for international partners). A final contract agreement has been delayed for months. 

The F-35, the Pentagon’s largest and most expensive program to date, has undergone significant reshaping as a result of ballooning costs and development delays. 

The F-35 is meant to replace older aircraft for the Air Force, Navy and Marine Corps as well as international militaries. The cost of the program has risen to $382.4 billion, a 65 percent increase from the projected costs in 2002.

Earlier this year, Lockheed CEO Robert Stevens pledged to keep the program on the right track and indicated the company would assume more risk for cost increases related to F-35 aircraft in early-stage production.

Lockheed officials have stressed that so far the company has been able to beat the government’s projections for the third batch of aircraft in early-stage production by 20 percent and is projecting it would come in more than 20 percent below the Pentagon’s estimate for the next batch, which is the one currently in negotiations.

The F-35 program is not the only high-profile program in Inouye’s crosshairs. The Defense panel also slashed funding for another Pentagon program that has strong backing from Defense Secretary Robert Gates: the Littoral Combat Ship. The LCS is viewed as a key part of the Navy’s push to achieve a 313-ship fleet.

Senate defense appropriators decided to cut funding for one ship for the Pentagon’s request for LCS, Inouye said on Tuesday. 

The LCS program has not been devoid of problems. Almost a year ago, the Navy significantly overhauled the buying strategy for the project after costs escalated. Lawmakers grew frustrated with the program after the cost of one littoral combat ship more than doubled, to at least $460 million.

Teams led by General Dynamics and Lockheed Martin previously built versions of the LCS before the Navy overhauled the program.

Now the Navy is looking to award a large number of ships across several years to one contractor and build competition down the line. But in August, the Navy announced that there would be a several-month delay in awarding a high-profile combat ship contract. Lockheed Martin, teamed with Wisconsin-based Marinette Marine and Alabama-based Austal USA, a unit of Australian Austal Ltd., are competing for the contract.  

“There is virtually no way that the winning contractor would be able to begin construction on four ships in 2011,” Inouye said during his panel’s deliberations Tuesday. “The two ships funded in 2010 have not yet been contracted. With the continued delays, providing funding for one LCS ship in 2011 is more than adequate for this important program.” 

While the Senate panel’s decisions on the F-35 and LCS funding may create heartburn within the Pentagon, defense appropriators have not recommended funding an alternate engine for the F-35 fighter jet. President Obama has threatened to veto any defense bills that contain funding for the engine made by General Electric and Rolls-Royce. The administration has thrown its full support behind the primary engine made by Pratt & Whitney, a unit of United Technologies. 

But Inouye indicated on Tuesday that the tug-of-war between Congress and the administration may not be over yet. Inouye told reporters that an amendment to fund the alternate engine might be offered when the full Appropriations Committee considers the Pentagon spending bill. 

“I would think so,” Inouye said, stopping short of offering more detail.

The House defense appropriators funded the alternate engine despite opposition from the top defense appropriator, Rep. Norm Dicks (D-Wash.). 

Senate defense appropriators decided not to fund more Boeing C-17 cargo aircraft as part of their 2011 budget deliberations. The Pentagon opposes any additional funding for the cargo aircraft. 

Meanwhile, Inouye is setting up for a clash with the Obama administration over funding for the Iraqi security forces. Taking a cue from the Senate Armed Services Committee, Inouye decided to slash the $2 billion request by $1 billion. The administration is fighting the defense authorizers’ decision.

“Some of us feel pretty strongly about this issue: that it's time — given the amount of money that Iraq is taking in oil revenue and the fact they cut their own defense budget in half in the parliament — it's kind of hard to justify putting billions of dollars in for the Iraq army,” Carl Levin (D-Mich.), the Senate Armed Services Committee chairman, said in May.

Overall, the Senate Appropriations Defense panel recommends $680.9 billion to fund the Pentagon’s operations in 2011. That amount also includes $157.7 billion for overseas contingency operations in Afghanistan, Iraq and elsewhere. Overall, Inouye said that his panel’s recommendation is $8.1 billion below the Pentagon’s base budget request. 

Inouye also said that defense appropriators reduced the dollar amount and number of member projects. The panel approved a total of $2.6 billion in earmarks as part of the 2011 bill. By comparison, for 2010, the panel officially disclosed $2.65 billion in earmarks. Watchdog group Taxpayers for Common Sense calculated an additional $4.5 billion in undisclosed projects it considered earmarks. 

House defense appropriators slashed the number of pet projects in the annual Pentagon spending bill by more than half. House Democrats have instituted a moratorium on for-profit earmarks, while Republicans have banned pork-barrel projects from spending bills. As a result of those actions, defense appropriators approved $1.22 billion in earmarks as part of the 2011 Pentagon-spending bill. 

Inouye has not instated any bans or moratoria on earmarks under his leadership.

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