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GE Confident in F136 Funding Fight


While both sides of the F-35 alternate engine debate have remained fairly silent as Congress tries to write last minute defense funding legislation, a GE spokesman today weighed in on what the Continuing Resolution means for the F136 alternate engine. Bottom line: While a CR doesn't give full funding for the F136 throughout FY-11, it's not likely to kill the program.

"The CR cites programs not to be funded and the F136 is not on that list," writes GE's Rick Kennedy. "That's good. The funding will be determined by the [the White House's] Office of Management and Budget interpretation. It's our understanding that programs from FY2010 will be protected."

However, one little issue here is the fact that the Pentagon and White House want to kill the F136.  This means OMB could put restrictions on the cash they send to the Pentagon to prohibit it from being spent on the second engine, another source familiar with the matter pointed out.

With the death of last week's omnibus spending bill containing cash for the F136 and the FY-11 authorization bill making no mention of the engine, the White House may now have a little more wiggle room to withhold cash for the F136. That being said, the Obama administration has recently softened on its longstanding threat to veto any legislation containing cash for the GE-Rolls Royce-built F136.

Still, the fact that the new Congress will be working on the FY-11 funding levels and that they still support the F136 means, "time is on [GE and Rolls'] side, as the song goes," said Teal Group aviation analyst Richard Aboulafia.

Along these lines, Kennedy chimed in, "it's the constitutional authority of the legislative branch to determine the fate of the F136, not the executive branch."

We'll see how this fight goes. So far, it looks like the GE-Rolls engine will keep on going.

The Senate ended debate on the CR late this morning and is working to vote on it and send it to the House for a vote there before the current temporary funding measure runs out at midnight. The bill is expected to maintain federal funding at FY-10 levels through early March.

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