House and Senate lawmakers continued to hash out the final versions of the two Pentagon budget bills yesterday in hopes of wrapping up the delayed measures–which dictate the fate of weapons including the F-35 Joint Strike Fighter–in the coming days.
The heads of the Senate Armed Services Committee (SASC) said they and their House counterparts have only a handful of matters left to reconcile in their competing policy-setting fiscal year 2012 defense authorization bills and could strike a final deal as soon as today. Meanwhile, the House and Senate defense appropriators largely agreed this week to provisions of budget-setting FY ’12 defense appropriations bill, which they plan to include in a massive omnibus appropriations bill covering most federal agencies nearing final passage.
For both defense bills, the previous versions endorsed in the House and Senate took different stances on Lockheed Martin’s [LMT] F-35 Joint Strike Fighter program.
SASC Chairman Carl Levin (D-Mich.) and Ranking Member John McCain (R-Ariz.) would not tell reporters yesterday what final differences remain between the House and Senate defense authorization bills. The SASC and House Armed Services Committee (HASC) leaders met Tuesday, an official multi-lawmaker conference committee met Wednesday, and the four panel leaders gathered yesterday and plan to talk again today on the phone.
“We’ll be finished tomorrow,” McCain said yesterday. Levin declined to make such a prediction.
While the SASC leaders would not say if they and their House counterparts agreed on F-35 language, Levin again vented about news from Monday that the Pentagon reached a preliminary contractual agreement with Lockheed Martin for a fifth lot of F-35s. Levin said he does not know the details of the agreement but is concerned it does not jibe with the Senate-passed defense authorization bill.
The Pentagon’s F-35 Joint Program Office (JPO) said in a statement late Monday it reached a “tentative agreement” with Lockheed Martin on “key terms” of the lot 5 contract, calling for a “fixed-price type contract vehicle and a concurrency clause where (the Department of Defense) DoD and Lockheed Martin will share responsibility on costs for concurrency changes–modification costs associated with changes discovered during development.”
The Senate bill, but not the House version, states the lot 5 contract must be fixed-price and the company must pay all costs that exceed the target amount. Some House members have balked at the Senate F-35 language.
Perhaps the most-controversial issue with the defense authorization bill relates to military detainee policy. The White House has threatened to veto the Senate version over language calling for some al Qaeda suspects to be held in military custody. Levin and McCain have met with Obama administration officials in recent days about their opposition.
Meanwhile, yesterday’s House-Senate appropriations conference committee on the multi-agency appropriations bill entailed little other than comments from lawmakers about their continued negotiations. Republicans and Democrats are at odds over policy riders in some of the non-defense appropriations bills in the spending package with a near $1 trillion pricetag.
Senate Appropriations Committee (SAC) Chairman Daniel Inouye (D-Hawaii) said, during the open conference meeting, he hopes lawmakers agree to a final omnibus spending bill next week and do not delay their holiday breaks. A compromise measure is expected to be filed Monday, to ensure both chambers vote on it by week’s end.
Much of the government has been running on a continuing resolution (CR) since FY ’12 began on Oct. 1 that runs out the end of next week, on Dec. 16. That resolution has kept the Pentagon’s FY ’12 funding at 1.4 percent below FY ’11 levels. It prevents the Pentagon from entering into new contracts.
The compromise FY ’12 defense appropriations bill is expected to be more in line with the version the SAC approved in September than the one the House passed in July, before Congress and President Barack Obama OK’d the Budget Control Act of 2011 in August.
The SAC-approved bill, intended to jibe with spending caps in that law, was $513 billion, or $26 billion below the $539 billion Pentagon requested early in the year. The House-Senate compromise version could total $518 billion.
The SAC bill included a $695 million reduction in F-35 funding, intended to delay a ramp up in aircraft production to allow kinks to be worked out in ongoing testing. The House-passed bill called for a smaller F-35 cut, of $75 million in development funds. The final bill is expected to be closer to the SAC version regarding F-35.
Inouye spoke positively about the F-35 program to reporters yesterday, saying “it’s in good shape.”
Also this week, Defense Secretary Leon Panetta and Chairman of the Joint Chiefs of Staff Army Gen. Martin Dempsey met Wednesday night with the so-called big eight lawmakers who head the armed services committees and defense appropriations subcommittees.
“We talked about the challenges ahead and…sequester, but also power shifting for Asia-Pacific, several overall strategy challenges for the future,” McCain said. Sequester refers to the long-term defense cuts of up to $600 billion that may have been triggered by the Joint Select Committee on Deficit Reduction’s failure to craft a deficit-cutting plan before Thanksgiving. Hawkish lawmakers want to change the legal requirement for those defense sequester cuts, which would be on top of $450 billion in cuts to Pentagon spending already dictated by the Budget Control Act.