Boeing, Lockheed Martin Win in Half-Trillion Dollar Defense Bill

  • Compromise measure covers the rest of fiscal year 2017
  • Bill seeks to stave off troop cuts, increase military pay

Boeing Co. would get the money to build more Super Hornet fighters than the Pentagon requested while Lockheed Martin Corp. would receive a boost for the Joint Strike Fighter as part of a military spending bill worth more than a half-trillion dollars.

The House today passed 371-48 a defense appropriation for the remainder of fiscal year 2017 that would favor a larger U.S. military as well as major weapons programs ranging from ships to helicopters and fighter aircraft.

It’s the first salvo in a looming battle over national security funding and the financing of the rest of the U.S. government. The Trump administration is working on a $30 billion supplemental funding request to boost defense spending without busting budget caps in law for the fiscal year which ends Sept. 30.

That’s in addition to the budget request for next year that the administration plans to release in mid-March and still-to-be-scheduled votes on funding other federal agencies for the rest of this year.

Rebuilding “our military starts today,” House Appropriations Committee Chairman Rodney Frelinghuysen, a New Jersey Republican, said on the floor before the vote.

Pentagon leaders “need this bill passed to ensure our military is as strong
and as effective as possible,” said Kay Granger, the Texas Republican who
leads the Appropriations Defense Subcommittee.

The fiscal 2017 defense measure, H.R. 1301, faces an uncertain fate in the Senate. The government is financed under a stopgap bill that runs through April 28 and Democrats may see a strategic advantage in delaying action until Republicans show what they plan to do with the money needed to run other government agencies.

Dick Durbin, the Senate’s No. 2 Democrat and the ranking member on the Appropriations Defense Subcommittee, said in interview that he supports the House-passed bill. He stopped short of saying whether Democrats would allow a swift vote on the measure or push for a deal to finish the other appropriations bills as well.

OVERALL FUNDING: The measure would provide $577.9 billion in discretionary spending, including $61.8 billion for overseas contingency operations funds not subject to budget caps. Appropriators are also counting $5.8 billion in supplemental spending already in current stopgap spending legislation for a total of $583.7 billion as money available for the fiscal year. The bill text was the product of bipartisan, bicameral negotiations among appropriators. Anticipating a separate emergency supplemental spending bill, Republicans dropped their effort to increase regular accounts through the back door by boosting uncapped war funding.

TROOPS: In an effort to stave off planned reductions, the measure would fund an active-duty U.S. military force of 1,305,900 and a Guard and Reserve force of 813,200. In order to do that appropriators added $1.6 billion. They also included a pay raise of 2.1 percent for the military after the Obama administration requested an increase of 1.6 percent. The measure also stipulates that there are sufficient funds for a civilian pay raise of 2.1 percent.

AIRCRAFT: The measure would provide $1.1 billion for the purchase of 14 Boeing Super Hornet fighter jets, while Lockheed would receive $8.2 billion for 74 F-35 Joint Strike Fighters, 11 more than requested by the Pentagon. A Lockheed unit, Sikorsky, also would benefit from the measure, with $1.1 billion for 61 UH-60 Black Hawk helicopters. Meanwhile, Boeing would also benefit from $774 million for 52 re-manufactured AH-64 Apache attack helicopters and $190 million for five new Apaches. The measure also includes $187 million for 28 Lakota light utility helicopters made by Airbus Group.

SHIPS: The bill would provide $1.78 billion to accelerate the production of an additional LPD-17 amphibious ship made by Huntington Ingalls Industries; would add $433 million for an additional DDG-51 destroyer made by General Dynamics Corp. and Huntington, and would add $475 million for a third Littoral Combat Ship not requested by the Navy. The LCS is built in two versions by teams led by Lockheed and Austal Ltd. In a nod to the Arctic-- a strategic region where the U.S. competes with Russia-- appropriators also included $150 million for the advance procurement of materials for an ice breaker. The ice breaker would be operated by the Coast Guard, which isn’t covered by the defense appropriations bill.

ISRAEL: The spending bill would boost Israeli missile defense programs by $455 million over the Pentagon’s budget request, according to the the House Appropriations Committee press release. The measure would fund a total of $600.7 million for Israeli missile defense programs, including $332 million for equipment procurement and $269 million in research and development.

UKRAINE: The measure would provide $150 million for lethal and non-lethal assistance to Ukraine to counter Russia’s incursions.

IRAQI OIL: The bill contains a rider that would prevent funds from being used "to exercise United States control over any oil resource of Iraq.” The language comes after Donald Trump on the campaign trail called for the expropriation of Iraqi oil, and said shortly after his inauguration as president that it was a “mistake” not taking that country’s oil.

SAVINGS: The compromise measure claims savings that include $1.15 billion from lower-than-expected fuel cost and $4.76 billion in rescissions of unused prior-year funding.

    Before it's here, it's on the Bloomberg Terminal.
    LEARN MORE