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SN Blog | With Fiscal Cliff Deal, U.S. Space Programs Dodge Deep Cuts — For Now

Updated at at 12:54 p.m.: The House of Representatives on Jan. 2 approved an amended version of H.R.6586 that extends U.S. commercial launch indemnification by one year. 

WASHINGTON — The U.S. Congress approved a plan Jan. 1 that will delay for two months the deep, automatic spending cuts known as sequestration that would have sucked billions of dollars out of military and civil space programs this year.

NASA alone stood to lose $1.5 billion, or about 8 percent of its $17.8 billion budget, if Congress had failed to head off sequestration. The Senate voted 89-8 to pass legislation, formally known as the American Taxpayer Relief Act of 2012, that postpones the sequester for two months. The House of Representatives gave final approval to the measure late Jan. 1, voting 257-167 to send the bill to President Barack Obama, who says he will sign it.

While NASA, the Pentagon and other federal agencies dodged a bullet, the measure provides only a temporary reprieve from the threat of deep budget cuts and sets the stage for another round of crisis-mode negotiations in Washington. That’s because the bill Congress sent to the White House largely punted on spending cuts and entitlement reform and did not raise the federal government's debt ceiling, a $16.4 billion limit on borrowing that the United States hit Dec. 31. The Treasury Department has said it can stave off defaulting on U.S. obligations for two months or so through actions such as suspending some investments in pension and health benefits funds for federal employees.

The Aerospace Industries Association (AIA), the Arlington, Va., trade group representing U.S. defense and aerospace contractors that depend heavily on federal spending, called on Congress and the White House to end the threat of  across-the-board cuts once and for all. 

"Sequestration is a slow motion catastrophe for our military forces, our space program and virtually every critical function of our government from air traffic control and border security to food inspection and more," AIA President Marion Blakey said in a Jan. 2 statement. "We strongly urge Congress and President Obama to find a permanent bipartisan solution to sequestration; the clock has been reset and is ticking again."

The fiscal cliff wasn’t the only thing the Senate was dealing with in the early morning hours of New Year’s Day. The Senate passed by unanimous consent an amended version of H.R.6586, which the House passed in November to extend commercial launch indemnification by two years.

The House on Jan. 2 agreed to the Senate’s amendment, clearing the way for the bill to be signed.

While that initially sounds like good news for the industry, there’s a catch: Congress passed not the original House bill but instead an amended version proposed by Sens. Bill Nelson (D-Fla.) and Kay Bailey Hutchison (R-Texas). The amendment replaces the text with a scaled-down version of S.3661, the Space Exploration Sustainability Act, that the two senators introduced in December after they failed to get amendments into the defense authorization bill. The amended bill extends NASA’s existing waiver to provisions of the Iran North Korea Syria Nonproliferation Act (INKSNA) from mid-2016 to the end of 2020, and includes a “Sense of Congress” clause that NASA should develop both the Space Launch System/Orion and commercial crew systems in a balanced manner. The amendment also extends commercial launch indemnification by only one year; both the original House bill and the standalone Nelson-Hutchison bill extended indemnification for two years.

Nevertheless, a launch industry trade group applauded the temporary extension.  “The American launch industry has become a highly competitive and important sector, both in the orbital and suborbital markets,” Commercial Spaceflight Federation President Michael Lopez-Alegria said in a Jan. 2 statement. “I commend Congress’s attention to this issue, as it will continue to support high-tech jobs in the launch industry and will allow the U.S. to compete in the international market.”

While the Senate was dealing with the fiscal cliff, the House took up a number of other bills, including H.R.6612, legislation to rename NASA’s Dryden Flight Research Center in California after Apollo 11 commander Neil Armstrong. (The Dryden name would instead be attached to the Western Aeronautical Test Range used by the center.) The bill, taken up under suspension of the rules, passed easily in a roll call vote Dec. 31, 404-0. The bill still has to be passed by the Senate before the new Congress convenes Jan. 3.

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