Fri, May 08, 2009
$17 Billion Cut... But Trillions More Spent Elsewhere
The Obama Administration, in the process of spending trillions
of dollars for all manner of programs and projects, is trumpeted
the 17 Billion dollars it is trying to cut from the Federal Budget.
Rather than try to digest them all en masse, we'll look at each of
them one at a time and allow you to make up YOUR mind as to the
rationale and wisdom for the decisions included below. Herewith;
another of the programs on the chopping block that has an aviation
or aerospace connotation.
From the 'Terminations, Reductions, and Savings' document
published this week by the OMB, as part of the FY 2010 US
Budget:
Proposal: The Administration has decided not to
fund the Joint Strike Fighter (JSF) Alternative Engine Program
(AEP), because it is no longer needed as a hedge against the
failure of the main Joint Strike Fighter engine program. The
Department of Defense (DOD) proposed cancelling the JSF AEP in the
President's 2007 Budget because development of the main engine was
progressing well and analysis indicated that savings from
competition would not be offset by high upfront costs. DOD did not
request funding for the program in the 2008 and 2009 Budgets.
However, the Congress has rejected the proposed cancellations and
has added funding each year since 2007 to sustain the AEP
development.
Justification: Because DOD wanted to reduce
technical risk in the development of the JSF engine, the Department
has had two contractors developing separate JSF engines. However,
in 2007, DOD proposed to cancel the contract for the second
(alternate) engine because the main engine program was progressing
well, making a second engine program unnecessary. Moreover,
financial benefits, such as savings from competition, have been
assessed to be small, if they exist at all, because of the high
cost of developing, producing and maintaining a second engine. The
reasons for canceling the AEP in 2007 remain valid today.
Studies by both the Government Accountability Office and
Congressional Budget Office have questioned the affordability of
the current defense program, particularly the high cost of
modernizing tactical aviation.1,2 Canceling the AEP will result in
estimated near-term savings of over a billion dollars.
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