Jan. 21, 2011 -- Despite vocal cries for austerity and belt-tightening on Capitol Hill, Congress and the White House, budget officials have quietly continued to pay for the development of a multi-billion-dollar military jet engine the Pentagon says it doesn't need and the defense secretary himself called a wasteful boondoggle.
"The Secretary of Defense [and] the President have made the point that this is not something we need," White House press secretary Robert Gibbs said today. "I think that whenever the military tells you something that -- the military is spending money on something the military doesn't need, especially in these times, it's important we pay heed to that."
The green light to continue spending on the engine's development came from the Office of Management and Budget last month at the urging of congressional leaders. The decision arrived on the heels of a $9 million lobbying push and an equally aggressive advertising campaign by General Electric, the corporate giant that has argued that the nation benefits by having two different versions of the engine that will power the Joint Strike Fighter. And it comes as President Obama named General Electric's CEO chairman of his new Council on Jobs and Competitiveness.
Nine months ago, the Pentagon and the White House publicly lashed out at the engine program, identifying it as one of the nation's most wasteful defense projects. Defense Secretary Robert Gates decried the notion of paying two giant defense contractors billions to build two different engines for the same plane. One engine, he said, would be plenty.
"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," Gates told reporters back in May. "To argue that we should add another $3 billion in what we regard as waste ... frankly, I don't track the logic."
President Obama promised he would veto the entire defense spending bill if Congress insisted on including money for the GE engine and Gibbs said today that veto threat still stands. But Congress adjourned last year before the spending bill could come to a final vote. In December, the director of the Office of Management and Budget wrote to members of Congress to inform them that the money for the alternate engine would continue to flow unabated, at least until March 4, when the stop-gap funding bill expires.
Now, those on both sides of the debate say that despite mounting anti-spending rhetoric from conservative House Republicans, the new Congress is poised to spend even more money on the alternate engine. A spokesman for General Electric told ABC News that newly elevated leaders are even more likely to keep the engine program afloat.
The debate over how to power the all-purpose military jet has brought into sharp relief the challenge faced by members of Congress who campaigned on vows to cut spending in Washington, but who now must confront a swirl of competing pressures, including the need to sustain jobs in their districts.
Pratt & Whitney, which won the initial contract for the Joint Strike Fighter engine, argues that the government gains little by paying a second company to build an alternate. But General Electric contends in advertising placed on political websites and in Capitol Hill newspapers that having two companies build engines creates competition that will ultimately drive down costs. It's an argument, the company notes, that was supported in an independent study by the Government Accounting Office. The company's executives believe their efforts to persuade key leaders are working.
Support For Second Engine Stronger After Election, Says GE
"As we go into the new year, if you look at the House and the election and the changes, you would have to say we have come out in a [strengthened] position," Rick Kennedy, General Electric's spokesman, told ABC News. "We have more people in chairmanship roles in the committees who support the engine."
In addition to arguing that an alternate engine could eventually push costs down, analysts with the House Armed Services Committee have also pointed out that a back up could keep the aircraft program aloft even if the primary engine for the aircraft, which is being built by Pratt & Whitney, proves unreliable.
Experts who have followed the debate say an even more critical driving force behind General Electric's bid may involve geography. GE and its partner on the engine, Rolls Royce, have a physical presence in dozens of congressional districts, and the representatives of those districts see a direct link between the engine contract and jobs.
Kennedy can rattle off the names of numerous key committee members and House and Senate leaders who support the alternate engine. A GE aviation facility is just a few miles from House Speaker John Boehner's Ohio district. House Majority Leader Eric Cantor's district is near a Rolls Royce plant.
Kennedy also hinted the White House may have softened its stance, a belief that will not be contradicted today when President Obama visits a General Electric factory in New York to talk about jobs and to meet with General Electric CEO Jeffrey R. Immelt. Immelt has developed a close relationship with Obama, sitting on the president's Economic Recovery Advisory Board, and scoring an invite to this week's state dinner with the president of China. Today he became the head of the Advisory Board's successor, the President's Council on Jobs and Competitiveness. Obama released a statement praising Immelt's "experience at GE and his understanding of the vital role the private sector plays in creating jobs and making America competitive."
"The White House really hasn't verbalized a position [on the engine] for a long time," Kennedy noted. "They had stated very early in 2010 that, if funding the competing engine disrupts the [joint strike fighter] program, he would veto it. It has been quiet since."
Kennedy added that he did not expect Immelt to raise the issue of the engine's funding during Friday's presidential visit. "That's just not Immelt's style," he said.
White House officials would not directly answer when asked if the president's veto threat still holds. But Meg Reilly, a spokeswoman for the Office of Management and Budget, wrote in an email to ABC News: "There's no position change here. The Administration continues to oppose long term funding for the alternate engine."
Joint Strike Force Program Among Most Costly In History
The competing engines are just one component of the F-35 Joint Strike Force program -- one of the most costly weapons programs in U.S. history. The original plan called for the development of 2,443 "fifth generation" planes of three different types: planes using conventional landings, planes capable of use by the U.S. Navy on aircraft carriers, and planes capable of vertical take-offs similar to that of the famed Harrier jet.
Each of the planes ordered from aeronautics manufacturer Lockheed Martin in 2002 was originally projected to cost just over $40 million. That figure has risen nearly 25 percent, according to Lockheed Martin, to closer to $49 million, accounting for inflation over the past nine years. With inflation added, as well as additional production, maintenance and spare parts costs, the total cost per plane tops out at $92 million.
The program has also been delayed several times and recently the contract with Lockheed Martin was extended from its original 2011 deadline to 2016.
"I think what you have to recognize is this is by far the most complex aircraft ever built," Lockheed spokesperson John Kent told ABC News. "We all acknowledge that we underestimated the complexity of developing the airplane. Hindsight is always very clear and I'm sure there are things we would've done differently.
"Yes, we're behind schedule. Yes, we're over budget on developing the airplane, but we exceeded flight test milestones last year. A lot of the problems that were dogging [the project] have been fixed," he said.
GE has pointed to the delays, and what it says are $2.5 billion in cost over-runs with the Pratt & Whitney engine, as proof that an alternative is needed. Warren Boley, president of Pratt & Whitney's military engine division, calls the figure misleading and says he finds it "disappointing" that "they are throwing rocks at us."
As for whether the fighter will emerge with one brand of engine or two, Boley says he has stopped trying to predict.
"I'm not sure I'm smart enough to handicap that race," he told ABC News. "The secretary of defense is very determined. But there are those in Congress who are also very determined."