UPDATE 1-Pentagon again omits funding for 2nd F-35 engine

* Fourth year of Pentagon effort to kill program

* Congress keeps adding funding back in (Adds details, byline)

By Andrea Shalal-Esa

WASHINGTON, May 7 (Reuters) - Defying Congress for a fourth straight year, the Pentagon on Thursday submitted a budget proposal for fiscal 2010 that once again zeroed out funding for an alternate engine for the F-35 being developed by General Electric Co (GE.N) and Rolls-Royce Group Plc (RR.L).

In each of the past three years, the Defense Department has pressed Congress to scrap the second engine for the F-35 fighter to save funds, but lawmakers have repeatedly added in funding to keep the alternate engine program alive.

The F-35, or Joint Strike Fighter, is the newest family of advanced fighter planes being built by Lockheed Martin Corp (LMT.N) for U.S. forces and eight partner countries.

The market for the F-35 engines is estimated to be worth $100 billion over the life of the program -- a huge boon for engine maker Pratt & Whitney, a unit of United Technologies Corp (UTX.N), which developed the engine already in use in early production models of the aircraft.

Congress initiated the second engine program in 1996, and has provided approximately $2.5 billion in funding for the program since 1997, according to a February 2009 study by the Congressional Research Service.

The nonpartisan research arm of Congress said the alternate engine program was expected to need an additional $900 million through 2013 just to complete development of the F136 engine. Including expected procurement, the program is valued at $7.2 billion, according to government watchdog groups.

Proponents of the second engine program argue that maintaining competition for the engines will drive costs lower in the longer run, and will give the Pentagon a viable alternative in the event of a failure of the Pratt engine.

Problems with the fan blades on the Pratt engine, which have delayed flight tests of the Short Takeoff Vertical Landing version of the F-35, are now resolved, according to program officials. The first flight test in the vertical mode is now due in September, months later than expected even after the problem was first addressed.

A spokesman for the GE-Rolls-Royce team said that, in the longer-term, investment in the F136 engine would "more than pay for itself -- as opposed to a monopoly and all of the cost consequences that come with it."

The nonpartisan government watchdog group Citizens Against Government Waste last month urged the Obama administration to cancel the alternate engine project, calling it "an egregious waste of taxpayer dollars."

"The funding of the alternate engine project is the poster child for what's wrong with the defense budget," the group said, urging the Obama Administration "to stand up to the pork barrel spenders in Congress this year." (Reporting by Andrea Shalal-Esa; Editing by Tim Dobbyn)