“Congress doesn't kill programs, the does.” The adage that defense contractors live by may hold true even in an atypical year.
In 2011, more than 80 freshmen lawmakers came to Washington to scale back government spending and pledged not to care about their reelection prospects. Individual defense committees did zero out several programs and one committee handed down steep reductions to the Pentagon's largest weapons system, the Joint Strike Fighter (JSF).
But by the time differences among those bills were resolved, it became apparent that tea party freshmen were just as resistant to whacking defense programs as colleagues who have operated inside the Beltway for decades. As the end of the legislative session neared, the time for compromise kicked in. Once Congress can reach a deal to finally approve defense spending for fiscal 2012, programs including the(Meads) and the Joint Light Tactical Vehicle are likely to receive money that will keep them alive until 2013. And the Joint Strike Fighter avoids major reductions despite calls by the program office to scale back production.
Next year, the Pentagon can decide whether to swing the ax.
The president asked for slightly more than $800 million over the next two years to wrap up development of Meads, a tri-national missile defense program. The Senate Armed Services Committee teed up Meads for a kill, arguing that the program has been poorly managed and is far behind schedule and way over budget. Sen. John McCain (R-Ariz.) led efforts to shoot down the missile defense system and urged the Pentagon to renegotiate international agreements for developing the program with Germany and Italy.
But after a full-court press from, the Pentagon and Italy and Germany, the Senate Appropriations Committee provided full funding for the missile system. With the powerful spending committee lining up in support of the program, the authorization bill language was likely to go nowhere.
So the final version of the defense authorization bill that passed last week blunted potential cuts, carving out 25% of this year's request and asking the Pentagon to limit the scope of the program or renegotiate termination costs with the Meads's international partners.
And while that's stern language, it's not an outright kill, leaving Lockheed to fight inside the Pentagon and on Capitol Hill for its survival next year. Defense industry officials calmly note that Deputy Defense Secretary Ashton Carter has justified Meads in the past and is likely to go to bat for the program again.
While the Senate Appropriations Committee was Meads's congressional savior, the committee recommended outright termination of the Joint Light Tactical Vehicle (JLTV).
The appropriators view directly contradicts the Army and the, whose top generals argue that the cost of recapitalizing a Humvee will be close to the price of a new JLTV.
While the resolution between the House and Senate language has yet to be released, industry officials are anticipating Congress will support both the JLTV and the Humvee for another year, saving that battle for next year as well.
The Senate Appropriations Committee also backed $695 million in reductions to Lockheed's JSF, citing problems with development while the aircraft is in production. Despite the warning from the committee that was echoed recently by the program manager and amplified by a “quick look review” report (see p. 30) detailing another raft of program woes, lawmakers are not likely to slow production or impose harsh penalties on the contractors.
According to a Republican lawmaker, appropriators have agreed to provide enough cash to make 31 jets, just one less than the House, had recommended.
And a tough provision in the Senate's version of the defense policy bill sought to hold Lockheed's feet to the fire for cost overruns exceeding a certain amount on the fifth lot of aircraft. The new law will only apply to the sixth lot of JSFs, which the Pentagon and Lockheed will negotiate one year from now.
At that time, the Pentagon will be facing the potential for $600 billion less than it had anticipated over the next 10 years unless Congress finds $1.2 trillion in deficit reduction. It will be a new year, and time for another test of the conventional wisdom.