U.S. House Passes Defense Bill as White House Threatens Veto

U.S. House Passes Defense Bill as White House Threatens Veto
27 May 2011

The U.S. House of Representatives approved a $690 billion defense bill even as the Obama administration is threatening a veto over

lawmakers’ support of a plan by General Electric Co. (GE) and Rolls-Royce Group Plc (RR/) to self-fund the development of a

secondary engine for the F-35 Joint Strike Fighter.
The House voted 322-96 to pass the fiscal 2012 defense authorization bill, which sets spending targets and military policy. The bill

authorizes $553 billion for the Department of Defense’s base budget and $119 billion for overseas operations including the wars in Iraq

and Afghanistan. It also authorizes $18 billion for the Department of Energy’s atomic weapons programs.
The bill would require the secretary of defense to allow continued development and testing of the secondary engine for Lockheed

Martin Corp. (LMT)’s F-35 jet if it is self-funded and would not incur any cost to the federal government.
The Defense Department last month terminated the second engine program, which Defense Secretary Robert Gates says is unneeded

and wasteful spending. Pratt & Whitney, a unit of United Technologies Corp. (UTX) of Hartford, Connecticut, is the primary engine

supplier for Bethesda, Maryland-based Lockheed Martin’s F-35 jet.
“If the final bill presented to the president includes funding or a legislative direction to continue an extra engine program, the

President’s senior advisers would recommend a veto,” the White House Office of Management and Budget said in a statement today.
$100 Million Self-Funding
GE, of Fairfield, Connecticut, and U.K.-based Rolls Royce said that they are willing to self-fund development of the alternative engine

for the rest of this year and next year. That would cost more than $100 million, GE Aviation spokesman Rick Kennedy said. The

company’s goal is to compete with Hartford- based Pratt & Whitney starting in 2016, Kennedy said.
The House bill is the first step in a several-months-long process to approve Pentagon policy and spending for the fiscal year starting

Oct. 1. The House and Senate will have to negotiate the final defense authorization bill to be sent to President Barack Obama for his

signature.
As part of the bill, the House approved adding $272 million to the Pentagon’s requested $181.3 million for Abrams battle tank

production, to help General Dynamics Corp. (GD) avert an Army plan to temporarily shut down the plant.
Lawmakers are also mandating that the Pentagon hold a competition for the Air Force’s new bomber propulsion system, instead of

having the airplane’s maker choose the subcontractor.
Future Bomber
The U.S. Air Force is requesting $3.7 billion in its five- year budget for research and development of a new class of long- range strike

systems that may include a bomber, missiles and drones. The Air Force budget request for fiscal 2012 includes $197 million to begin

developing a bomber.
The new bomber design would be the first in almost three decades, since Northrop Grumman’s B-2 was designed. Lockheed Martin

and Boeing Co. (BA), based in Chicago, said in 2008 that they would form a partnership to compete against Los Angeles-based

Northrop.
The White House’s Office of Management and Budget also opposed the requirement for the bomber-engine competition in a

statement of administration policy issued on Tuesday.
“The prime contractor’s design concepts may differ so widely that it would be impractical to have a separate engine competition and

then insert the winning engine into the winning airframe,” it said. “Mandating such development would likely result in increased cost and

risk.”
War Debated
Both Republicans and Democrats tried to use the defense authorization bill to force the Obama administration to speed up the troop

withdrawal from Afghanistan. Measures introduced by Representatives Jim McGovern, Democrat of Massachusetts and Walter Jones,

Republican of North Carolina, as well as one introduced Republican Jason Chaffetz of Utah and Democrat Peter Welch of Vermont

failed.
“If you get a decent vote it’s wind at the president’s back that come July when he makes his announcement” about the future of

Afghan deployment “that he can do more than just offer a token drawdown, that it’s actually a meaningful drawdown in terms of our

troops,” McGovern told reporters yesterday. His amendment failed by a vote of 204 to 215.
Apart from the engine issues, the defense authorization bill has also triggered White House veto threats over provisions that challenge

administration policies regarding nuclear weapons and military detainees.

To contact the reporter on this story: Roxana Tiron in Washington at rtiron@bloomberg.net
To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net

(Source: Bloomberg)


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