A $3 Billion Government Boondoggle?

Congress pushes a fighter jet engine the military says it doesn't want or need.

May 19, 2010, 4:31 PM

May 21, 2010 — -- President Obama says Congress has sunk billions into a military jet engine that the Defense Department says it doesn't want or need, and now the two branches are headed for a showdown over a push by Congressional leaders to spend $3 billion more on the project over the next six years.

"The Bush administration opposed this engine. The Obama administration opposes it. We have recommended for several years now against funding this engine, considering it a waste of money," Defense Secretary Robert Gates told reporters this week. "To argue that we should add another $3 billion in what we regard as waste … frankly, I don't track the logic."

At issue is the engine for the aircraft known as the Joint Strike Fighter, an all-purpose military jet that is expected to become the backbone of American air supremacy for a generation. The fighter already has an engine – built by Pratt & Whitney and in use as the jet is being tested. Some members of Congress want to pay General Electric and Rolls-Royce to develop a second one. ABC News chief investigative reporter Brian Ross will have more on the allegations of wasteful spending tonight in a report on World News with Diane Sawyer.

"It started off with an earmark that was placed into a defense bill years ago," said Laura Peterson, who has been tracking the project for the nonpartisan watchdog group Taxpayers for Common Sense.

The money involved is not insubstantial. By some estimates, Congress has paid $3 billion to GE and Rolls-Royce since first setting aside money for a second engine in the mid-1990s, and it will take close to $3 billion more to have the engines tested, proven and in full production.

And top military brass say they don't want or need it. One navy admiral told reporters it made no sense to try and carry spare parts two separate engines on an aircraft carrier. "Space is at a premium," Adm. Gary Roughead said.

So why is Congress pushing it?

Supporters of the second engine say that with a project of this scale, bringing in a second contractor to build an alternate engine for the fighter jet could actually wind up saving money in the long term. Having two companies compete to put their engines in the plane creates competition, and that forces both contractors to work faster and cheaper, said Rep. Adam Smith, D.-Wash., chairman of the key House Armed Services Committee subcommittee that has reviewed the contract.

Smith pointed out that an independent review by the Government Accountability Office found that over the life of the project, competition could cut the cost of the engine by more than 20 percent – and is similar to an approach used successfully in the development of the F-16 a generation ago.

"This is a policy call, and the policy call is competition works," Smith said.

Analysts with the House Armed Services Committee also point out that there could be a security benefit from having a second contractor. If the Pratt & Whitney engine proves unreliable, the military could find itself reliant on a single, critical jet fighter that it can't get off the ground. Having a second engine is "critical to the operational security of our fighter fleet, not to mention a very worthwhile insurance policy for future repairs that may be necessary when we're working off just one engine," said Jennifer Kohl, the committee's spokeswoman, in an email to ABC News.

But Peterson said she believes something else is also driving congressional interest in having GE and Rolls-Royce duplicate work already being done by Pratt & Whitney.

"It has been really promoted by lawmakers from the states where GE and Rolls Royce have their production plants," she said. "National security is too important to become another jobs program. And that is how Congress is treating this."

Generally, that is true. Key figures pushing the second engine have included Sen. Carl Levin (D-Michigan), who chairs the Armed Services Committee, Sens. John F. Kerry (D) and Scott Brown (R), both of Massachusetts, Sen. Evan Bayh (D-Ind.), and Rep. Ike Skelton, (D-Mo.), who chairs the House Armed Services Committee. Congressional leaders from Ohio, Indiana, Michigan, and Massachusetts have all lobbied aggressively to make sure there was funding for the GE-Rolls-Royce engine, even as successive administrations have pushed harder and harder to kill off a project they consider duplicative.

When President Obama took office, he began including the engine in a short list of costly defense projects that he considered wasteful and unnecessary. In a speech on government waste in 2009, Obama singled out the engine for ridicule. "The Defense Department is already pleased with the engine it has," Obama said. "The engine it has works. The Pentagon does not want and does not plan to use the alternative version. That's why the Pentagon stopped requesting this funding two years ago. Yet it's still being funded."

Congressional supporters of the plane have pushed back. Earlier this week, the House Armed Services Committee included the next $485 million installment for the GE-Rolls-Royce engine in their defense authorization package. The measure is expected to come to the House floor for a vote next week.

Lobbying on the hill has been fierce on both sides. GE has three former U.S. Senators pushing the cause for them, and a review by the Center for Responsive politics showed the three main companies involved in the engine wars have spent more than $60 million on lobbyists over the past 2 ½ years. GE has also launched an advertising campaign to decry the notion of giving one defense contractor a monopoly over the engine's production.

GE spokesman Rick Kennedy told ABC News that he believes it is the job of Congress to take the long view of the program – and recognize that short term costs may be high, but long term savings more than make it worthwhile.

"You know we have been reinstating year after year after year, in the budget, because the case for competition is simply too compelling for a program this size," Kennedy said. "For that reason we feel like we're standing on the side of the angels."

That's not what Gates believes. "Only in Washington does a proposal where everybody wins get considered a competition."

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