For Immediate Release August 2, 2012

Contact:  Leslie K. Paige 202-467-5334 Luke Gelber 202-467-5318

Defense Appropriations Includes Earmark for Wasteful Missile Program

(Washington, D.C.) – Despite its rejection by three-out-of-four relevant congressional committees, the Senate Defense Appropriations Subcommittee on July 31, 2012 included in its version of the Department of Defense (DOD) spending bill $380 million for the widely-criticized Medium Extended Air Defense System (MEADS). Since no authorization exists for MEADS, the funding added by the Senate subcommittee qualifies as an earmark under Citizens Against Government Waste’s (CAGW) longstanding criteria. This development comes on the heels of a letter from Defense Secretary Leon Panetta to the Senate Appropriations Committee urging further funding for MEADS. Panetta cited the age-old excuse that cancelling the program would jeopardize transatlantic cooperation and lead to a dispute over cancellation costs.

However, a confidential April 2012 DOD report obtained by CAGW concluded that the U.S. can withdraw from the contract without committing additional money or paying termination fees. The report cited language in the 2005 Memorandum of Understanding among the three countries stating that if Congress fails to appropriate funding for MEADS, the U.S. can extricate itself from the program without penalty. In other words, the objections of Germany and Italy would not matter. Further, discontinuing funding for MEADS does not seem likely to irrevocably alter defense procurement cooperation between the U.S. and Europe given the skepticism with which Germany and Italy view the long-term viability of MEADS, and the close partnership the U.S. has with European nations on many other defense projects.

The Obama Administration has previously advocated cancelling MEADS after the completion of the so-called Proof of Concept phase that was to run for two years ending after fiscal year (FY) 2013. To this end, the President requested $400.9 million for MEADS.

MEADS’ troubles are well documented. The program has been plagued with cost overruns of nearly $2 billion and is 10 years behind schedule. A March 9, 2010 Washington Post report quoted an internal U.S. Army memo asserting that the program “will not meet U.S. requirements or address the current and emerging threat without extensive and costly modifications.” A March 2011 Congressional Budget Office (CBO) report recommended terminating MEADS in favor of continuing production of the Patriot. CBO cited an internal Army memo that urged “harvesting MEADS technologies and improving the Patriot program it was designed to replace.” It’s been the Pentagon’s policy since February 2011 that it would not continue funding for MEADS beyond FY 2013, and that it had no intention of procuring the system.

Support for MEADS within the subcommittee does not appear to be unanimous. Senate Defense Appropriations Subcommittee member Lindsey Graham (R-S.C.) stated on July 31, 2012 that moving forward the program “…will be a point of contention.” When asked if he would offer an amendment to strip funding for MEADS, Graham said, “to be continued.” However, Senate Defense Appropriations Subcommittee member Richard Shelby (R-Ala.) said, “Funding this final year of MEADS development is the right thing to do for the country.” Sen. Shelby’s stance is eminently unsurprising as the MEADS program office is based in his home state.

“After witnessing the tortured path of the MEADS project, it’s not hard to understand why Congress faces such gridlock when determining solutions to avoid the automatic DOD cuts posed by sequestration,” said CAGW President Tom Schatz. “Members cannot even rid taxpayers of a program that has encountered massive cost overruns, delays, and poor performance. Eliminating MEADS would serve as a fine example of a judicious approach to trimming DOD waste. The continuation of its funding by the Senate Defense Appropriations Subcommittee represents a squandered opportunity.

Citizens Against Government Waste is a nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, mismanagement and abuse in government.