Hagel might have final say on controversial missile defense program

That throws the fate of the missile defense program — a joint venture between the U.S., Italy and Germany — into doubt, congressional aides say, as contradicting interpretations of the two measures will likely mean the Defense Department has the final say.

Pentagon officials aren’t tipping their hand yet.

On Tuesday morning, spokeswoman Lt. Col. Melinda Morgan said it would be “premature” to discuss the measure because it was not yet signed by the president. She did not respond to a request for comment after the bill was signed by Obama in the afternoon.

Officials at Lockheed Martin, the main U.S. contractor for MEADS International, say they are expecting the money will be used to fund the program in 2013, although the company has not yet received any guidance from the Pentagon.

“Clearly we were very pleased when Congress passed the FY13 omnibus,” Marty Coyne, director of business development for MEADS International, told The Hill.

“We haven’t been told anything yet, but we’re optimistic that we’ll be authorized those funds to complete the development.”

MEADS was intended more than a decade ago to replace Raytheon’s Patriot Missile system. The Army decided in 2011 it was not going to put the system into operation, but it still wanted to complete the project’s “proof of concept” development for the technology and to fulfill obligations to Italy and Germany.

Raytheon and Lockheed Martin have engaged in an intense lobbying battle over MEADS as lawmakers have attempted to kill the project, industry sources say.

Sen. Kelly AyotteKelly AyotteOPINION: Democracy will send ISIS to the same grave as communism Kelly Ayotte joins defense contractor's board of directors Week ahead: Comey firing dominates Washington MORE (R-N.H.) lambasted the program last week as the “missile to nowhere,” as she launched an unsuccessful attempt on the Senate floor to remove funding from the appropriations bill. Her amendment was not allowed a vote.

Her nonbinding amendment to eliminate funding for MEADS was included in the Senate’s 2014 budget resolution, which passed 94-5.

Sen. Dick DurbinDick DurbinGraham gets frustrated in public ‘unmasking’ debate Senate Dems set principles for potential budget negotiation Dem senator: GOP's healthcare approach will 'devastate Medicaid' MORE (D-Ill.), the Senate Defense Appropriations subcommittee chairman, argued on the floor that the costs of terminating the program were roughly equal to the costs to finish development, because the U.S. would have to pay Italy and Germany for breaking its contract. Thus, the Pentagon might as well fund the program, he said.

MEADS is funded by unused 2012 funds through the end of March, meaning the Pentagon will likely need to make a decision soon on what to do in 2013.

DOD won’t get much help from Congress. The congressional committees that handle defense issues disagree over what the Pentagon can do with the $380 million it’s been given for MEADS.

House appropriators say that the NDAA has precedent because it sets Pentagon policy, and therefore the money can only cover termination costs. Appropriations Committee Chairman Hal Rogers (R-Ky.) made a point of stating that during debate on the House floor earlier this month.  

But Senate appropriators argue the CR gives the Pentagon discretion. An aide to Senate Defense Appropriations ranking member Richard Shelby (R-Ala.) — one of five senators to vote against Ayotte’s budget amendment — said the appropriations bill has precedent because it was the latest measure passed by Congress.

Even the Armed Services Committees, which initially passed the prohibition on funding MEADS, are split.

A House Armed Services aide said that the funding tables in the CR were made “binding,” which means they are considered legislative language and have equal weight as the authorization bill provision that banned funding for the medium-range missile program.

But a Senate Armed Services aide said the appropriators could not overrule the prohibition.

“That provision is in the law and DOD has to abide by law — they’re not going to ignore the fact that this is the law, even if there’s money in CR-Appropriations bill,” the aide said.