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House Passes Defense Bill With Funds for Helicopter (Update3)

By Tony Capaccio

July 30 (Bloomberg) -- The House today approved legislation providing $636.3 billion for defense in fiscal year 2010, including funds for at least four weapons programs the Obama administration doesn’t want.

The measure that passed the House by a vote of 400-30 adds $485 million to buy the first five Lockheed Martin Corp. presidential helicopters, $560 million for a General Electric Co.-Rolls-Royce Group Plc backup engine to the Lockheed F-35 fighter and $495 million for nine Boeing Co. F-18E/F fighters. It also includes $674 million to buy three Boeing C-17 transport jets.

The administration opposes all this spending, and immediately after the House vote today spokesman Robert Gibbs repeated a threat to veto the entire defense bill if it contains money for either the helicopter or the backup engine.

The budget passed today is $3.8 billion less than the administration requested and includes $128.3 billion for the conflicts in Afghanistan and Iraq. It includes a 3.4 percent pay increase for the military, 0.5 percent more than the administration sought. It also includes $30 billion for the military’s health programs, $2 billion above the request.

The House appropriations bill isn’t the last word on the Defense Department’s budget for next year. The Senate still must pass its appropriations bill; it must be reconciled with the House version passed today, and both chambers also negotiate the differences on their separate measures that authorize spending and set defense policy.

Challenge to Gates

Still, the House action today is a challenge to efforts by the White House and Defense Secretary Robert Gates to rein in and restructure defense spending.

The White House urged House lawmakers in a message July 28 to cut funds for items that “duplicate themselves or that have outlived their usefulness.”

The House today rejected a series of amendments offered by Republicans Jeff Flake of Arizona and John Campbell of California to block spending for so-called “earmarked” projects the Pentagon didn’t request.

Taxpayers for Common Sense, a non-profit watchdog group, said the bill contains more than 1,100 earmarks for about $2.75 billion.

In spite of the inclusions, the bill contains victories for Gates who proposed program terminations and truncations in April.

Support on F-22

Among the biggest, the House voted 269-165 to strip $369 million intended as a down-payment on 12 Lockheed F-22 fighters. The Senate removed the money last week in the face of a threatened White House veto and the House vote today likely ends congressional debate over the Pentagon’s decision to cap the program at 187 fighters.

The House also agreed with the Senate to support the major restructuring Gates proposed of the $159 billion Army Future Combat Systems network to include termination of the $87 billion manned-vehicle portion. Chicago-based Boeing is the lead contractor on the program.

The House also passed largely untouched Gates’s proposal to accelerate production of Bethesda, Maryland-based Lockheed’s F- 35 fighter, the Pentagon’s largest weapons program, to 30 aircraft in fiscal 2010 from 14 this year. The House reduced the request by two aircraft. The Senate has approved funding for 30.

Tanker Victory

The House also didn’t buck Gates’s decision to award the contract for a new aerial refueling tanker to a single contractor.

John Murtha of Pennsylvania, chairman of the House panel that controls defense spending, favored splitting the work between Boeing and Northrop Grumman Corp. He backed off in the face of vigorous opposition from Gates, who said this approach would be “bad public policy and bad acquisition policy.”

The House measure directs the Pentagon before formally opening a new competition to report to Congress on lessons learned from a failed effort last year to buy new aerial refueling tankers.

The study should include a “full description of the corrections made” after the competition collapsed, said the report accompanying the legislation.

Los Angeles-based Northrop Grumman and teammate Airbus SAS parent European Aeronautic, Defence & Space Co. were awarded the contract for the $35 billion tanker program over Boeing in February 2008.

Boeing successfully protested, and Gates in September postponed a re-bid until a new administration took office.

The presidential helicopters survived in the House largely at Murtha’s insistence. He has told the Pentagon it must get some benefit from the $3.2 billion already spent on the program. The appropriation also was pushed by Democratic Representative Maurice Hinchey, whose district includes Owego, New York, home to the Lockheed Martin chopper assembly facility.

To contact the reporters on this story: Tony Capaccio at acapaccio@bloomberg.net.

Last Updated: July 30, 2009 18:02 EDT

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