By Emelie Rutherford

The House is set to take up a Pentagon policy bill next Thursday that defies the White House’s wishes on aircraft programs including the F-35 alternate engine and was deemed unacceptable yesterday by Defense Secretary Robert Gates.

However, though, the House Armed Services Committee (HASC) approved a $567 billion defense authorization bill Wednesday night that funds the F-35 Joint Strike Fighter alternate engine program, lawmakers from Connecticut are expected to rally behind Gates in opposing the program next week in the House.

Rep. John Larson (D-Conn.), the powerful chairman of the House Democratic Caucus, has the General Electric [GE]-Rolls-Royce engine program in his crosshairs. The primary F-35 engine it competes against is made by Pratt & Whitney [UTX] in his state.

“A vote against the extra engine program is an excellent opportunity for us to show the American people whose side we’re on,” Larson said this week. “Are we on the side of protecting taxpayer dollars and ensuring they are spent wisely and carefully, or are we on the side of padding the profits of big corporations, particularly foreign corporations? I’m on the side of the American taxpayer. The President (Barack Obama), Secretary Gates and I are of one mind on this and I intend to work with them to end this wasteful program.”

Amendments to the HASC-approved bill for fiscal year 2011 only will be cleared for House floor votes if the House Rules Committee, chaired by Rep. Louise Slaughter (D-N.Y.), allows them to proceed during a meeting next Tuesday or Wednesday.

Gates told Pentagon reporters yesterday he was “very concerned” about what he knew about the HASC-passed bill. He highlighted the committee’s continued support of the alternate engine as well as “detailed conditions” it wants impose on the overall F-35 program, which he charged would “make it essentially unexecutable and impose unacceptable schedule and budget costs.”

He said he would “strongly recommend” Obama veto defense legislation if Congress adds unrequested funding for the alternate engine, “direct changes that seriously disrupt the JSF program,” or calls for buying more of Boeing‘s [BA] C-17 cargo planes.

Gates made similar threats last year, and Obama nonetheless approved a defense budget that funded the second engine and more C-17s that the Pentagon did not want. Yet the duo did succeeded in forcing lawmakers to relent and strip funding for Lockheed Martin‘s [LMT] F-22 jet fighters from defense bills.

Asked yesterday if he thinks Obama would actually veto the defense policy bill this year, an election year, Gates said he “obviously” did not make his statement without talking with the president first.

“Frankly I think if (Obama) were not prepared to substantiate that he probably would have waived me off at the time,” Gates said.

On the alternate engine, the HASC-approved bill highlights that a recent Pentagon analysis found the cost of developing both or just one F-35 engine would be roughly the same on a “net present value basis.” It says analysis by the Pentagon’s Cost Assessment and Program Evaluation (CAPE) states $2.9 billion more is needed to finish the engine program over six years. The panel also notes non-financial benefits, including “better engine performance, improved contractor responsiveness, a more robust industrial base, increased engine reliability and improved operational readiness.”

Gates said regarding “the argument that we should add another $3 billion to what we regard as waste to protect the $1.5 billion that we believe already has been wasted, frankly I don’t track the logic.” He said Pentagon officials believe the alternate engine proposal “is based on unrealistic cost estimates.” They also are “deeply concerned” the current engine design “may not meet the performance needs” of the F-35, he said.

HASC members said very little about the alternate engine during Wednesday’s all-day bill markup session. Air and Land Forces subcommittee Chairman Adam Smith (D-Wash.) didn’t discuss his backing of the second engine, only mentioning it in a prepared written statement.

Support for the alternate engine remains generally strong in the other defense panels in Congress. On the Senate Armed Services Committee (SASC), though, members Sen. John McCain (R-Ariz.), the SASC’s ranking Republican, and Sen. Joe Lieberman (I/D-Conn.), the SASC Air Land chairman, are strongly opposed to the engine effort, while Chairman Carl Levin (D-Mich.) supports it. The SASC subcommittees will begin marking up their versions of the defense authorization bill next week.

The HASC also moved Wednesday night to pressure the Pentagon on the Air Force’s KC-X aerial-refueling tanker program. With no debate, the committee approved an amendment from Smith mandating the defense secretary submit an “interim report” to Congress on government subsidies received by companies in the tanker competition that are deemed illegal by the World Trade Organization (WTO).

The report would said “whether the covered subsidy would provide an unfair competitive advantage to any bidder in the source selection process,” the successful amendment states. Smith’s measure builds on similar tanker-related language in the FY ’09 defense authorization act.

The WTO found in a March report that some European government aid to European firm Airbus was illegal. European Aeronautic Defence and Space Co. (EADS), Airbus’ parent company, is competing for the tanker contract against Boeing, which would build the tankers in Smith’s state of Washington. The EU is expected to appeal the WTO’s March report, and the trade organization also is weighing the EU’s counter-complaint that Boeing unfairly benefitted from U.S. government support.

Boeing backer Rep. Rick Larsen (D-Wash.) labeled Smith’s amendment, which he cosponsored, as one that would “help level the playing field for Boeing in the tanker competition.”

The HASC also voted Wednesday night to buck the Pentagon’s request for Boeing’s F/A-18 E/F fighter jets, and to buy eight more than requested. Rep. Todd Akin (R-Mo.) succeeded in winning Democrats’ support for an amendment to shift around more than $500 million to pay for the eight aircraft. The purchase would be partially supported by $103.5 million of excess F/A-18 E/F funding estimated to be available because the Pentagon agreed last week to a money-saving multi-year contract for the aircraft.

The HASC approved amendments that require an array of reports from the Pentagon, including a report from the Air Force secretary on the appropriateness of requirements for a light-air-support aircraft for the Afghan military.

The panel also wants the comptroller general to review past reports the Pentagon was required to submit to Congress; those reports were to be on Air Force fighter shortfalls, procurement of so-called 4.5-generation fighter jets, and combat air forces restructuring. The Air Force and Air National Guard would be banned from retiring fighter aircraft in FY ’11 until 180 days after the report is received on Capitol Hill, under the approved amendment from Rep. Frank LoBiondo (R-N.J.).