Washington Report

House Fight with EU Might Stall Navy, Marine Programs

House lawmakers this month are expected to introduce bipartisan legislation aimed at crushing the European Union’s (EU’s) plan to lift a long-standing arms embargo against China, a move that could stymie U.S. defense cooperation efforts with Europe, including the Navy’s VXX presidential helicopter program and the international Joint Strike Fighter (JSF).

At press time, details of the pending legislation remained murky, and it was unclear whether the bill would garner any traction among Senate lawmakers. But congressional sources said the White House appeared to be on the same page with House International Relations Chairman Henry Hyde, who is leading the charge against the EU.

Hyde, an Illinois Republican, has long opposed loosening U.S. arms export laws intended to curb the proliferation of sensitive technologies to states of concern. Last month, he joined House Armed Services Committee Chairman Duncan Hunter, R-Calif., in a joint hearing aimed at rattling EU leaders seeking to remove the ban. The hearing came on the heels of several weeks of very public White House opposition to Europe’s proposed lifting of the embargo, which was imposed shortly after China’s 1989 crackdown on pro-democracy demonstrators in Beijing.

With both the executive and legislative branches presenting a unified front against the EU proposal, the legislation is being described as “all stick and no carrot,” according to one congressional source.

In a nutshell, the bill would seek to prevent any European company that sells arms to Beijing from doing business with the Pentagon in the future. It could also bring existing trans-Atlantic production lines — including the Lockheed Martin Corp.’s JSF — to a screeching halt, according to Joel Johnson, vice president of international affairs at the Aerospace Industries Association, an organization that lobbies for aerospace companies and counts Lockheed among its many members.

The legislation faces numerous technical hurdles, Johnson said. Most defense systems are composed of parts and components manufactured all over the world, making it difficult to prevent proliferation of some U.S. technologies to undesirable destinations. The EU ban on sales to China also does not prohibit the export of so-called dual-use items — those with both civilian and military applications.

These factors combined will make it difficult to legislate against the transfer of at least some U.S. military technology to China. Still, while the bill would likely acknowledge such details, it would no doubt harm trans-Atlantic defense cooperation more broadly, Johnson said.

“You would shut down all U.S. and European assembly lines,” he said. “You can’t drill very far down into an American system without finding European components, and vice versa.” As a result, cooperative research and development projects — including the JSF — would likely be put on hold while security arrangements were reviewed.

“It also could affect a number of EU countries lining up to purchase JSF if they’re also participating in shipping bad stuff to China,” according to one House aide familiar with the proposal.

Likewise, the Navy’s presidential helicopter contract awarded earlier this year to an international team led by Lockheed Martin could be in jeopardy if the legislation is enacted. Lockheed’s Anglo-Italian partner in the VXX venture, AgustaWestland, is owned by Finmeccanica, which last year merged its space operations with Alcatel, a European company that sells satellites to Beijing.

Hyde said security concerns outweigh trade issues. “European arms sales to China now raise fundamental questions about whether defense industrial cooperation with Europe is becoming a national security liability for our country,” he said in an opening statement during the April hearing. “It is incumbent upon the Congress to continue to emphasize that it will not be possible for Europe to have it both ways on such a grave matter.”

New Skirmish Over Copter Contract

Senators from New York and Connecticut are gearing up to battle among themselves in the coming months over the presidential helicopter contract. The Navy’s $6.1 billion award will enable Lockheed Martin to create about 750 jobs in upstate New York, which doesn’t sit well with Connecticut lawmakers irked that Stratford-based Sikorsky Aircraft was not selected. Sikorsky has built the presidential helicopter fleet since the 1950s.

Last month, Connecticut Democratic Sen. Christopher Dodd’s bold attempt to derail the contract drew fire from New York Democrats Charles Schumer and Hillary Clinton. Schumer, who referred to Dodd’s last-minute amendment to the State Department’s budget bill as a “sneak attack,” responded by putting a hold on the legislation, which is expected to remain in stasis until Dodd backs down.

Dodd’s amendment, which sailed through the Senate by voice vote, would kill the Lockheed Martin contract by banning any company that has done business in Iran from working on the helicopter. Representatives of Lockheed Martin’s European partner in the venture, AgustaWestland, attended a trade show in Iran earlier this year.

Political Heat May Roil Deepwater

The Coast Guard’s revised plan for its Deepwater modernization effort will be the focus of intense scrutiny this summer as Sens. Susan Collins, R-Maine, and Joseph Lieberman, D-Conn., the chair and ranking member of the Senate Homeland Security and Governmental Affairs Committee, urge accelerating the program by at least five years and investing in new assets rather than maintaining legacy systems.

In a recent joint statement, the senators took aim at the Homeland Security Department’s most recent Deepwater proposal that would focus more spending on legacy assets at the expense of new ones. “The [department] report not only fails to accelerate the Deepwater program, it actually extends the estimate for completion by up to another five years,” Collins and Lieberman said.

According to proposal, 11 1960’s-vintage 378-foot cutters would be maintained through 2010. An earlier plan would retain only five of these cutters. Navy League National President Sheila M. McNeill said in her May “President’s Message” (page 3) that Deepwater should be converted to a 15-year program. The original program was to last 20 years.

Growing Consensus On LHA(R) Ships

A consensus may be growing in Congress to speed construction of the Navy’s LHA(R) amphibious ship program, potentially leading to more money and authority to start construction in the fiscal 2006 budget.

During a House Shipbuilding Caucus meeting in April, Marine Lt. Gen. Robert Magnus told lawmakers and reporters the Navy is ready to start building more ships in U.S. shipyards.

Magnus, deputy commandant for programs and resources, briefed about a dozen members of the caucus on the latest proposals for sea basing. He called on lawmakers to consider the need to maintain a fleet size of at least 300 ships.

“We do not need a 600-ship Navy,” Magnus said, but added that projections for as few as 260 ships are a trend that concerns him.

Doubts Remain On Navy Payment Proposals

Senate Armed Services Chairman John Warner, R-Va., appears increasingly inclined to help the Navy mitigate the rising cost of shipbuilding by allowing the service to pay for ships on the installment plan. However, Senate aides said Chief of Naval Operations Adm. Vern Clark might not get everything he wants.

Although Warner is generally supportive of a major departure from the current approach to Navy ship procurement — paying billions up front for large ship purchases — the chairman is expected to draw the line at Clark’s request for “freedom to manage” a new approach to procuring ships.

Lawmakers and White House budget officials worry that such a move would erode financial oversight of ship construction and bind future Congresses to pay for ships authorized in the past. Sen. Jim Talent, R-Mo., who chairs the panel’s Sea Power Subcommittee, told Clark during a hearing last month that while he supports the change in funding strategy, “it begins to break down when you get into the details.”

The Navy League favors a variety of acquisition strategies, such as spreading procurement costs of capital ships over two years, to place more flexibility in the hands of Navy leaders.

Reporting by Seapower Correspondent Amy Klamper. Assistant Editor David W. Munns contributed to this report.