Business & Lobbying

Senators scrap money for second F-35 engine

The Appropriations Defense subcommittee approved a $636.3 billion Pentagon-spending bill — $3.9 billion below the administration’s request.

{mosads}The Obama administration has signaled for months that funding for a second F-35 engine in the fiscal 2010 defense bill could become veto bait. Gates spent months, most recently at the beginning of September, making the case that the Pentagon does not need the alternative engine, built by a General Electric-Rolls-Royce team.

Senate Appropriations Committee Chairman Daniel Inouye (D-Hawaii) said Wednesday that he decided against funding the engine because he was concerned about the floor vote on the entire defense spending bill.

Inouye indicated, however, that the issue of funding the second engine is far from closed, noting it would become a conference issue with the House, which added $560 million for it.

Inouye signaled the possibility of discussing the funding of the engine with the administration. His committee funded it in the past despite Pentagon opposition.

“I am always open,” Inouye said.

The Obama administration has threatened to veto the defense bill if funding for the second engine  —  which it did not request  —  is seen to jeopardize the development of the entire F-35 program.

Connecticut-based Pratt & Whitney builds the primary engine and has lobbied Congress for months, making the case it should be the only engine producer for the newest fighter jet.

The Senate showed earlier this summer that it had no appetite for funding the second engine when lawmakers cast a voice vote on the 2010 defense authorization bill.

The anonymous vote approved the amendment offered by Sen. Joe Lieberman (I-Conn.), which bars spending on an alternative engine until the Defense secretary certifies that such a program would reduce the fighter program’s costs, improve the plane’s readiness and not disrupt development or result in fewer fighters procured.

GE and Rolls-Royce on Wednesday took the new Senate setback in stride.

“Today’s action by the Senate was expected,” George McLaren, a Rolls-Royce’s spokesman, said in a statement. “In fact, both Inouye and ranking member Sen. Thad Cochran [R-Miss.], along with a number of the members of the Defense Appropriations subcommittee, are longtime supporters of the F136 engine. We look forward to the conference and are confident of a successful outcome.”

Pratt & Whitney, GE and Rolls-Royce are all expected to step up their lobbying in the weeks before Congress completes work on the appropriations bill.

“We hope that the Senate will stand firm in conference with the House and agree to discontinue funding for the alternate engine,” said Erin Dick, a Pratt & Whitney spokeswoman, in a statement.

The stakes are high for the Connecticut delegation, and for lawmakers from Indiana, Ohio, Massachusetts and Kentucky, where the GE-Rolls-Royce team has operations.

GE-Rolls-Royce would compete with Pratt & Whitney for orders on the next generation of fighters, which are expected to be a mainstay for the U.S. military and a host of allies for decades.

Building engines for the F-35 is projected to be a $100 billion market over the next few decades, which could mean serious revenues for both Pratt & Whitney and the GE-Rolls-Royce team.

Critics of the Pentagon’s decision to scrap the second engine argue that having a single engine producer for the entire fleet could be too risky and make the fighters less reliable. Leading defense authorizers and appropriators in the Senate and House, including Rep. John Murtha (D-Pa.) and Sen. Carl Levin (D-Mich.), have made the case over the years for granting funds to makers of both engines in an effort to save money down the line.

The “engine wars” started after several fiascos with the F-15 and F-16 fighter jets, which relied on one engine. As a consequence, Congress started an alternative fighter-engine program that provided funding for rival companies to produce engines for the same planes. One company receives a certain percentage of the engine contract, the other the rest.

House lawmakers argue that the investment in a second engine is needed, because the cost of the Pratt engine had soared by nearly $1.9 billion since 2002. They also argue that two test engines failed and that very little of the planned engine testing has been completed.

In an effort to hold on to Pentagon funding, the GE-Rolls-Royce team last week met with the F-35 program director to offer a fixed-price deal on low-rate production of the second engine.

Missing from the defense subcommittee bill is also funding for more Lockheed Martin F-22 fighter jets — a foregone conclusion after the Senate earlier this year voted against more fighter jets, heeding a personal veto threat from Obama.
The panel provided about $560 million for F-22 maintenance.

Contrary to the House, senators did not fund the now-canceled VH-71 presidential helicopter program.

“The president does not want it,” Inouye said. “I don’t want to force it down his throat.”

But Senate defense appropriators chose a different course on several other programs, most notably handing the Boeing Co. an initial victory. Appropriators agreed to add $2.5 billion for 10 more C-17 cargo aircraft to sustain the aircraft’s production for one additional year. The administration did not request any planes.

“We expect that re-examining its airlift fleet, the Defense Department will eventually conclude that purchasing additional C-17s and maintaining the strategic asset of a hot airlift production line is the right solution,” Inouye said in a statement.
The House approved funding for three additional C-17s in its spending bill version.

Senate appropriators, as in the House, decided to fund nine additional Boeing F/A-18 E/F Super Hornets, bringing the total of Super Hornets for 2010 to 18. The additional nine are funded through the overseas contingency budget for 2010.
Inouye’s panel also decided against funding the closure of the military prison at Guantánamo Bay, Cuba. Obama is aiming to close the controversial prison by the end of January, but is running into serious roadblocks on Capitol Hill, where both Democrats and Republicans want to know what he plans to do with the detainees.

“The administration has yet to produce a credible plan,” Inouye said on Wednesday.

Tags Carl Levin Thad Cochran

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