U.S. Senators Push to Avoid $7 Billion in Spendng Cuts for Spy Satellites

Lawmakers on the U.S. Senate Intelligence Committee are asking the Obama administration to avoid cutting a more than $7 billion commercial satellite program being developed by GeoEye Inc. (GEOY) and DigitalGlobe Inc. (DGI)

The Defense Department is considering “major” reductions that may damage the EnhancedView program, which provides commercial satellite imagery to the defense and intelligence communities. No amount was specified in the letter.

GeoEye, based in Herndon, Virginia, in 2010 received a $3.8 billion contract from the National Geospatial-Intelligence Agency for the program, and DigitalGlobe, based in Longmont, Colorado, received a $3.55 billion contract. The public-private partnership was designed to support existing government satellites.

“In this period of extreme fiscal restraint, this partnership represents a creative solution that should be applauded and emulated,” a dozen House and Senate lawmakers wrote in a letter to Defense Secretary Leon Panetta and National Intelligence Director James Clapper. “We support the EnhancedView program and urge the department and the intelligence community to sustain it.”

The letter was signed by seven Democrats and five Republicans, including Senators Mark Udall, a Colorado Democrat, Mark Warner, a Virginia Democrat, and Roy Blunt, a Missouri Republican. All three sit on the Senate’s Select Committee on Intelligence.

$1 Billion Committed

The two companies together committed more than $1 billion of private investment to the program based on a 10-year government contract, according to the letter.

A program change may mean “a lasting loss of credibility for the U.S. government when it comes to any similar arrangement in the future” for commercial space launch, telecommunications “or any other area that requires industry to make upfront investments against a long-term need,” the letter states.

The Pentagon faces cuts ranging from $450 billion to $1 trillion during the next decade under the deficit-reduction deal President Barack Obama signed into law on Aug. 2.

“We appreciate the enormity of the challenge you face in attempting to balance projected funding with needed future capabilities,” the letter states. “However, we seek your support to ensure that the department and intelligence community confront this difficult decision in a balanced and objective manner and ensure that the capability needed in the future is not irreparably lost.”

To contact the reporter on this story: Brendan McGarry in Washington at bmcgarry2@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net

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