Pentagon still determined to cut GE’s $3 billion redundant fighter jet engine, despite Immelt’s new administration post

Jon Ward Contributor
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The Pentagon’s top spokesman on Friday said that Secretary of Defense Robert Gates remains determined to eliminate funding for a $3 billion project contracted to GE, as the White House faced questions on the matter the day that President Obama named the company’s CEO to an uncompensated advisory post on economic affairs.

Critics of the administration raised questions Friday about the timing of a continuation of funding for the F-35 Joint Strike Fighter (JSF) Extra Engine, implying that GE CEO Jeff Immelt may have been named chair of the president’s new Council on Jobs and Competitiveness only after the White House agreed to extend funding for the project through March.

The administration dismissed this, saying that a December 21 letter from White House budget chief Jack Lew to Sen. Sherrod Brown, Ohio Democrat, was not an intervention that changed policy, but rather an explanation of existing policy.

And Pentagon spokesman Geoff Morrell said in an interview that the Defense Department was as intent as ever on eliminating the program in the next several months.

“We’re still wrestling with how to proceed with the extra engine in this [continuing resolution] environment. But we are still committed to ultimately killing it,” Morrell said.

The CR is the means by which Congress has continued to fund government operations since last fall, when the Democratic-controlled House failed to pass any of the annual spending bills it is required to. The current CR expires in March, and Congress will have to decide whether to pass another one for the remainder of the fiscal year through September, or to go another route.

Morrell said that the Pentagon is able to strike the F-35 funding if the government is funded for the rest of the 2011 fiscal year with a CR.

“We don’t believe our hands are tied. We believe we have the latitude to fund or not fund. We are trying to make a decision in the short term how to deal with it,” he said. “Ultimately we are as determined as ever to kill it.”

Morrell pointed out that C-17 cargo planes were bought in past budgets, and could be purchased under the CR, but have not been.

Spending is being done on a “case by case basis,” he said. He said he could not comment on why the Pentagon had not just eliminated the program from the current CR.

But Morrell’s description of the administration having discretion to change and redirect spending under the CR runs counter to the line from the administration, that Lew’s December letter to Brown was simply stating the existing policy, and that all spending continued essentially unchanged from past appropriations.

And ABC News reported Friday that Lew’s letter was a “green light” for the spending project on the heels of a $9 million “lobbying push” from the influential corporation.

ABC also quoted GE spokesman Rick Kennedy as saying the Republican-controlled House is more likely to continue funding the project than the Democrats.

White House press secretary Robert Gibbs was pressed Friday – as Obama flew to Schenectady, New York to tour a GE plant and to announce Immelt’s appointment – about the F-35 second engine’s continued funding.

“The Secretary of Defense, the President have made the point that this is not something that we need. I think whenever the military tells you that something that – the military is spending money on something the military doesn’t need, especially in these times, it’s important that we pay heed to that,” Gibbs said.

Obama threatened in May 2010 to veto a defense spending bill containing the F-35 money, but Congress was not able to get an isolated defense bill done in December, so it was wrapped into the CR. When asked whether Obama’s veto threat still stands on a bill that contains funding for the project, Gibbs said it did.

“We’re going to go through obviously another round of appropriations over the course of the coming year,” Gibbs said. “And the President and the Secretary of Defense will again reiterate as we’re tightening our belts, as everybody is tightening their belts … there are things we simply don’t need. And that’s certainly one of them.”

Gibbs also fended off questions about whether Immelt would be faced with conflicts of interest as he advised and influenced the president regarding matters of economic policy.

“Obviously he’s here to help and has agreed to work through what makes our country more competitive, not something that is a benefit just to one company or to his company,” Gibbs said.

Amanda Carey contributed to this report.

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