By Emelie Rutherford

A Senate panel unveiled a defense appropriations bill yesterday that all but assures continued C-17 aircraft production while leaving the F-35’s alternate engine, F-22 jet, and VH-71 presidential helicopter in doubt and likely subject to House-Senate negotiations.

The full Senate Appropriations Committee (SAC) will take up the $636.3 billion fiscal year 2010 Pentagon spending legislation today, after the defense subcommittee (SAC-D) markup yesterday. The full Senate could debate the bill, which includes $128.2 billion in war funding, as soon as next week.

SAC Chairman Sen. Daniel Inouye (D-Hawaii) told reporters yesterday he backed off his previously expressed support for funding the F-35 Joint Strike Fighter’s alternate engine in the subcommittee bill because of “the administration’s concern plus the fact that there are many members who have expressed concern.”

Inouye and Sen. Thad Cochran (R-Miss.), the chairman and ranking member of both the SAC and SAC-D, signaled they remain open to further consider the engine effort the Pentagon wants to kill.

If the alternate-engine monies aren’t added during further Senate deliberations they will be debated during a bicameral conference committee, because the House-passed defense appropriations bill funds the F136 engine built by General Electric [GE] and Rolls-Royce, which is an alternate to the F135 engine built by Pratt & Whitney [UTX].

“It’s a matter for the conference” committee of House and Senate appropriators, Inouye said. “We would like to discuss this matter further with the administration,” he said, adding he hopes those talks happen this week.

A separate conference committee negotiating a final Pentagon policy bill also must decide what to do with the second-engine funding, which is in the House-passed authorization measure but not in the Senate version.

Senate Armed Services Committee Chairman Carl Levin (D-Mich.), an alternate-engine supporter, told reporters yesterday he was surprised the SAC-D did not fund it. He said while he must represent the Senate authorization bill’s position against the engine effort in authorization conference negotiations, he continues to seek data on it.

“The issue’s whether we should complete the second engine…because there’s a lot of…sunk costs or investment on that,” Levin said about the program Congress kept alive in recent years over Bush administration objections. “How much? What’s the number? We’re trying very hard to get the objective figure for that.” If the percentage of sunk costs is high, he said, that could bolster support for it in the defense authorization conference committee.

The White House has either promised it will or suggested it could veto final Pentagon authorization and appropriations bills that include funding for the alternate engine as well as the F-22 fighter jet and now-canceled VH-71 chopper, both built by Lockheed Martin [LMT].

Inouye said during yesterday’s markup that “the Defense Department has been wrong on several occasions in recommending program terminations.”

The prospect of continued F-22 production for the U.S. military beyond the Pentagon-desired 187 aircraft cap looks slim now that the SAC-D has backed no funds for more of the aircraft.

Yet Inouye said the F-22 is not necessarily dead, because he inserted language and funding into the SAC-D bill to study the prospect of preparing a simplified export version that Japan or other nations including Australia could buy.

“It all depends upon the export version; If that goes through, (the F-22 is) still alive,” he said.

Inouye said before actually initiating foreign F-22 sales, “we have to see if these potential buyers are interested.” He has talked to Japanese officials about them buying the F-22 but has said more analysis is needed to determine the cost.

The House-and-Senate-approved authorization bills both call for studying the feasibility of F-22 foreign military sales, while the House appropriations legislation would keep the F-22 export ban in place.

After President Obama promised in July to veto defense legislation that funds more than 187 F-22s, the Senate voted to remove F-22 funds from its Pentagon authorization bill and the House did the same with its defense appropriations bill. Only the House authorization bill covers additional F-22 production: $369 million in advance-procurement monies for parts. The defense-authorization conference committee is weighing that F-22 funding.

In addition, the SAC-D bill includes “over $560 million for F-22 modernization initiatives,” according to a summary.

For the VH-71, the only one of the three chamber-passed Pentagon bills that calls for further investment in the canceled program is the House’s defense appropriations measure.

The SAC-D didn’t not follow suit in proposing to operationalize any of the already built VH-71s, leaving the House proposal’s fate to defense-appropriations conferees.

“If the president doesn’t want it, I don’t want to force it down his throat,” Inouye said.

Boeing’s [BA] C-17 is the one notable program the administration wants to stop funding that Senate appropriators supported yesterday. The SAC-D proposes adding to the administration’s request $2.5 billion for 10 additional C-17s, a proposal senators will likely reconcile with the House appropriations bill’s call for three C-17s the administration did not request.

“We expect that in 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.

On the closely watched Air Force tanker competition, Inouye rejected the notion a legislative push to compel a split buy between both competitors is dead.

“I don’t think it’s dead,” he told reporters, adding it “could be” an issue for the appropriations conference committee. The House defense appropriations bill and each chamber’s authorization bills do not compel the Pentagon to make a split tanker buy.

The SAC-D bill also calls for:

  • adding monies, in “overseas contingency operations” (OCO) war funding, for nine more Boeing F/A-18E/F Super Hornet aircraft than the Pentagon requested, raising the total to 18;
  • adding $1.2 billion in additional OCO funds for Mine Resistant Ambush Protected All-Terrain Vehicles (M-ATVs);
  • deleting OCO monies for 12 MC-1C Sky Warrior unmanned aerial vehicles;
  • providing the administration’s proposal of $7.7 billion for the Missile Defense Agency, but reducing funding for further-term research and shifting monies to support the Aegis standard missile, TPY-2 radars, and Ground-based Missile Defense interceptors for testing;
  • supporting the Pentagon’s desire to kill the Kinetic Energy Interceptor;
  • heeding the administration’s wish to terminate the Combat Search and Rescue helicopter competition;
  • adding $1.7 billion for a second DDG-51 destroyer to the Pentagon’s proposal;
  • deferring funding for C-130 avionics modernization;
  • reducing monies for the Army’s Family of Medium Tactical Vehicles; and
  • fully funding the administration’s request for V-22 Osprey procurement, Expeditionary Fighting Vehicle development, and Future Combat Systems spin-out equipment procurement.