Senate panel omits funds for second F-35 engine

Visitors look into a Lockheed Martin F-35 combat aircraft is on display to the public at the International Aerospace Exhibition ILA at Berlin's Schoenefeld airport May 6, 2002.

WASHINGTON (Reuters) - A U.S. Senate subcommittee omitted funding on Wednesday for an alternate engine for the F-35 fighter jet in a boost for United Technologies Corp, maker of a fully funded engine.

But General Electric Co and Rolls-Royce Group PLC, partners in developing the second engine, said they enjoyed great support in the Senate and looked to a House of Representatives-Senate conference committee to keep their project alive.

"What happened today is not a surprise," said Rick Kennedy, a GE spokesman.

He described Sen. Daniel Inouye, who chairs the Senate Defense Appropriations subcommittee, as keeping his powder dry to save the second engine after further legislative action.

Inouye, a Democrat from Hawaii, "is going to act in a way that he feels is best to save the engine," Kennedy told Reuters. Inouye made no mention of the project in his remarks at the hearing and aides to Inouye did not immediately return telephone calls seeking a comment.

Kennedy, in a follow-up statement, said GE and Rolls Royce were "confident of a successful outcome because competition and cost discipline in major defense procurement programs have proven to be in the best interest of taxpayers and our armed services."

The Obama administration has threatened to veto the defense appropriations bill if it includes funding for a second engine.

on the ground it is unaffordable and unnecessary. The Pentagon says the F135 engine being built by Pratt & Whitney, a unit of United Technologies, is doing well.

Under the Senate panel's version of the $636.3 billion defense appropriations bill for fiscal 2010, which begins October 1, funding was omitted for alternate engine development, a summary of the recommendations said.

The full Senate Appropriations Committee, also headed by Inouye, is to consider the bill on Thursday.

In July, the House voted 400 to 30 to approve a 2010 defense appropriations bill that included $560 million for the F-35 alternate engine development.

Differences between the House and Senate bill must be resolved in a conference before final passage of a bill that can be signed into law.

The Senate subcommittee also recommended adding $2.5 billion to sustain Boeing's C-17 cargo plane line by buying 10 more in 2010. The administration wants to end the C-17 program without further purchases.

The House approved $674 million in its defense appropriations bill to buy three more C-17s.

(Reporting by Jim Wolf; editing by Maureen Bavdek and Andre Grenon)