House Appropriations Committee Approves Commerce, Justice, & Science Budget

The House Commerce, Justice, & Science Appropriations, or simply CJS, Subcommittee FY 2014 budget, which includes funding for NASA, was approved by the full House Appropriations Committee on July 17. In the House version of the NASA budget, every program takes a funding haircut, although some more so than others. The House FY 2014 CJS budget now awaits a vote by the full House and then reconciliation with its Appropriations counterpart in the Senate.

While the House CJS budget takes into account the budgetary impact of sequestration, the Senate’s draft CJS budget does not. Senators curiously believe that sequestration will cease before, or early enough in, FY2014 to have little budgetary impact on that year’s funding; Representatives do not. In some senses, this makes the House budget more realistic, even honest, given the political realities of Washington today. And at the very least, the House CJS budget marks the lower-bound of spending. By budgeting for sequestration, the House reveals the full impact of sequestration. And it’s not a pretty picture for any government agency.

The House Subcommittee’s NASA’s FY 2014 budget[1] is in Title III, beginning on page 57. Details from the budget report[2] on NASA funding begin on page 59,

Program FY12 Budget FY13 Budget White House H.R. 133
Science $5,090.0 $5,144.0 $5,017.8 $4,781.0
Aeronautics $569.0 $570.0 $565.7 $566.0
Space Technology $575.0 $642.0 $742.6 $576.0
Exploration $4,152.0 $3,770.8 $3,915.5 $3,612.0
Orion $1,200.0 $1,200.3 $1,026.8 $1,050.0
SLS $1,860.0 $2,119.4 $1,384.9 $1,775.0
SLS Construction $1,454.2 $1,339.8 $1,476.0
Exploration Gnd Systems _ $402.8 318.2 $299.0
Commercial Space Flight $406.0 $525.0 $821.4 $500
Space Operations $4,233.6 $3,953.0 3,882.9 $3,670.0
ISS $2,830.0 $2,958.0 $3,049.1 $2,860.0
Space & Flt Support $830.0 $925.0 $833.0 $810.0
Education $138.4 $125.0 $94.2 $122
Cross-Agency Support $2,995.0 $2,823.0 $2,850.3 $2,711
Inspector General $37.3 $38.0 $38.2 $35.3

The SLS program faces a proposed cut of $344.4 million from its FY 2013 appropriated amount of $2,119.4 million. The White House had proposed cutting the program by $734.5 million, which wasn’t surprising given the White House’s past opposition to the Space Launch System program.

The Orion program also faces a proposed budget cut of $150.3 million, but that stands in contrast to the White House’s proposed cut of $173.5 million.

The House budgeters cap Commercial Crew funding at $500 million, a far cry from either the proposed $821.4 million the White House requested or the approximately $700 million the Senate is considering.

The biggest problem facing NASA’s FY2014 budget is the disconnect between the House and the Senate concerning how much to fund the government. The House is working under its chamber’s Budget Committee’s numbers, which fund the government at a lower level than anything the Senate is considering. There is some doubt as to whether a reconciled appropriations bill that does not hew to the House Budget numbers will pass the House.

AmericaSpace will provide updates as the budgets of both the House and Senate percolate and brew. Stay tuned …


  1. The full text of the House Appropriations Commerce, Justice, & Science Subcommittee’s FY2014 budget can be downloaded as a PDF.  ↩
  2. The full text of the House Appropriations Commerce, Justice, & Science Subcommittee’s Report on the FY 2014 Budget can be downloaded as a PDF.  ↩

18 comments to House Appropriations Committee Approves Commerce, Justice, & Science Budget

  • Good summary.

  • Thanks Mike.

  • Karol

    Jim, in your opinion, what will be the reaction of Sen. Shelby (R. Al) to the proposed cuts to the Space Launch System and Orion? With your expertise and inside perspective on the inner workings on The Hill, do you have any initial estimates as to the final outcome of the impending NASA budget compromise?

    • I just don’t see how the House and Senate Commerce, Justice, & Science numbers come together. As far apart as those numbers are, the House and Senate authorization bills are even farther apart.

      I think we’ll see NASA funded by a Continuing Resolution through at least the first quarter of FY 2014, but I wouldn’t be surprised if that were the case through most of FY2014. I say that because to get the House leadership to allow a vote on a reconciled CJS appropriations bill means, under the Hastert rule (my goodness, can’t they just kill that thing?!?), the majority of the GOP House caucus must support the bill. But for a bill to have that sort of support by the GOP in the House will mean that Dems in the Senate will be aghast. And visa-versa.

      As for authorization, the gap is so wide as to be, in my opinion, nearly insurmountable. And then there’s the history of the 2010 NASA Authorization Act. House members were promised on Sept. 29, 2010 that if they accepted the Senate version of the 2010 NASA Auth. Act that changes would be made that would improve the bill. Remember that at that time, the Congress was for the first time giving the President’s proposed space plan to outsource America’s human space flight program the big heave-ho. But those promised changes were never made. I’m sure that many House members who voted for the Senate bill now wished that the Gorton version of the NASA Authorization Act had been approved, that the then Science Chair’s investigation of NASA had continued. So I don’t know if House members are feeling very trusting of their Senate counter-parts enough to accept the Senate’s ideas of fully authorizing funding of Commercial Space to $800 million, an increase of nearly 52% increase over previous appropriated levels, while holding SLS and Orion constant. If the Senate will not agree to cut Commercial Crew, then I don’t see how the two authorization bills are reconciled.

      • Karol

        Thank you for the very informative response Jim. Your insight and analysis has always proven to be extremely accurate. Like it or not, you’re going to “hear it as it is” at AmericaSpace! Given what you have said, there is no doubt that the 2014 election, and the very real possibility of a shift of power in the Senate with seats in states like Michigan and Montana in contention, will be even more interesting for the pro-NASA community. Please keep up the great work, especially at this very important time.

        • Thank you very much for your kind words, Karol. I have my failures, like anyone, but do try to be as accurate as possible.

          Take care.

          • Leonidas

            I concur with Karol, Jim. It is a priviledge to be a part of AmericaSpace’s readreship.

            • Thank you for your encouraging words. It’s active readers such as you and Karol that keep us going.

              We may not be writing what some want to read, but we are covering the facts. Over the course of the years, I’ve made my fair share of mistakes, but I do not believe they were ever such that they detoured the point being made.

  • yg1968

    The sticking point is unlikely to be commercial crew. They will probably just meant somewhere in the middle. However, the funding for Earth science might be more problematic. But the biggest hurdle by far is how to deal with the sequester and the Budget Control Act.

    • I agree. Commercial Crew has no powerful appropriator backing it while Science and Orion/SLS do. The BCA, which brought us sequestration, is making a mockery of our government.

  • Matt McClanahan

    How to make commercial crew just another expensive, slow-moving government program:

    “This will require pursuing all development and certification work beyond the Commercial Crew Integrated Capability (CCiCap) base period through Federal Acquisition Regulation (FAR)–based contracts;” (Report, page 65)

    Space Act agreements produced two inexpensive cargo craft on two new rockets. The additional cost and bureaucracy of a FAR contract almost guarantees that commercial crew will not fly by the current expected date, if it flies at all, and seems to be an unambiguous statement from the House that they don’t believe COTS/CRS was a successful model to be followed in the future.

    • Here’s the problem with Space Act Agreements—there was no collateral. Should SpaceX or Orbital Sciences go belly-up, although the gov’t funded very nearly 100% of the development of their LEO cargo hardware, the gov’t would not assume ownership of that hardware. Instead, creditors of those companies would, even though none provided near the funding levels of the gov’t. Hundreds of millions would be lost. There was no way Congress was going to stand for that for very long. When something is too good to last, it won’t.

      Should the CCiCap participants not like the terms of FAR contracting, they are certainly within their rights under the Space Act agreements they signed to leave. Then they can act like real commercial entities and find private investors to fund the development of their crewed spacecraft. But those investors will demand their pound of flesh, an ownership stake, likely management oversight, and seats on a company’s Board. Sort of sounds like what the new contracting environment for Commercial Crew will evolve into. TANSTAAFL!

      Those of us who work in real market-based industries, that is those not funded by collateral-free financial give-always in the hundreds of millions, along with a well-funded service contract to boot, are not sympathetic to the new “plight” of the “commercial” space companies. It would be as if the gov’t paid me to drill an oil well, of which I will none-the-less maintain full ownership, and then paid top-dollar for the oil that gushed-out. Isn’t going to, and shouldn’t ever, happen…not for me, for anyone here, and not for the “commercial” space conpanies.

      • Neil Shipley

        Well Jim, I guess that if any of the COTS or CCiCap companies go belly up, it’ll still be literally billions of dollars LESS lost that what NASA has lost on it’s own failed ventures over that last few decades under, if I’m not mistaken, FAR contracts.
        So far, there has been one success under COTS and it should be noted that all the CCiCap companies are meeting their milestones. That is pretty transparent unlike the current NASA flagship missions where nobody, NASA Administrator included, don’t understand the current progress until there’s a budget overrun and more funds are required. Of course, just going over budget doesn’t give any indication of actual work done. It simply means that they want more money.
        Cheers.

        • Reread your comment – do you have any idea how arrogant what you posted makes you sound? You essentially said you know better than everyone at NASA including the NASA Administrator.

        • As for transparency, I think Joe Fragola would beg to differ. It turned-out that Joe Fragola was right about what he was claiming concerning the SpaceX flight. Or have you forgotten Bowersox’ “oxidizer-rich shutdown” nonsense? It took the AAS and the ISS Safety panel to get SpaceX to come clean on the anomalies of that launch. And then SpaceX dropped the suit, said everything was fine. And not more than a month or so later, SpaceX Astronaut Safety VP Bowersox quit. The ever transparent SpaceX said nothing. Normally, when a company’s VP moves-on, there’s an announcement. Instead, everyone found-out about this quit by accident. If you think this is transparency, I have to ask…do you work for the NSA?

          COTS has been a success? You’re putting the cart far, far in front of the horse. Let’s see, SpaceX isn’t 1/3 of the way through its CRS contract but has been paid 1/2 of that contract’s funding. I think it wiser to wait to see how it and Orbital do when they are 1/2 the way through and see how they are holding-up under a fixed-price regime before proclaiming that we have a success.

      • Matt McClanahan

        First, I’d point out that my remarks were not calling for sympathy for any implied hardship or “plight”. What I’m doing is questioning the rationale, motives and wisdom behind the House committee’s decision to prohibit further use of Space Act agreements for the commercial crew program. Attempting to address your points:

        “Here’s the problem with Space Act Agreements—there was no collateral. Should SpaceX or Orbital Sciences go belly-up, although the gov’t funded very nearly 100% of the development of their LEO cargo hardware, the gov’t would not assume ownership of that hardware.”

        Second part first (funding level): I’m not sure any third party can speak with authority about what percentage of development costs are being paid by the government. To the best of my knowledge, it’s proprietary information which nobody is releasing. We do know from NASA’s CCiCap Selection Statement last July that proportionately speaking, between the three companies, SpaceX is investing the most, Boeing the least. That could be a difference between 2 and 5 percent or it could be a difference between 10 and 30 percent. I haven’t seen anyone reputable claim to know those figures, but if they’re out there, I’d certainly love to see them.

        As for ownership, nobody should deny that it’s a gamble for the government to invest in a company which is developing something the government doesn’t own. But isn’t this is also a fairly routine event? If we see “commercial manned spaceflight” as a new industry, then it’s not unlike (just a few examples) fuel cell buses, large scale wind turbines, or new methods of solar cell production (all of which have received collatoral-free money from the government). Investments by the government have succeeded and failed, and while the failures may indeed end up being a total loss, the succeeses can yield significant return on investment to the economy. Of course, some failures become extensively publicized (Solyndra, $500M-ish) despite being just a small part of the investment program that provided that failed investment (ARRA, $800 billion)

        Indeed, during COTS, failures to meet obligations during development did happen, but since payments to these companies was driven by milestones, the company was simply cut off at that point (RpK was paid only $32M of the $200M contract they got). A conventional contract, on the other hand, would’ve been paid regardless of progress (as we’ve seen with any number of other government projects), and sometimes paid even moreso in response to poor progress. In addition, it would likely include hefty termination liability fees.

        “Should the CCiCap participants not like the terms of FAR contracting, they are certainly within their rights under the Space Act agreements they signed to leave.”

        Part of me actually thinks this is the preferable outcome for SpaceX and Sierra Nevada. Boeing, already doing just fine with its cost-plus SLS contract, has not been shy about how unintersted they are in developing CST-100 without the likelyhood of a NASA contract, so they would almost certainly drop the project.

        NASA would continue to pay increasingly comical fees to Roscosmos, and if DragonRider or Dream Chaser do become commercially viable on their own (obviously some years later than if NASA keeps funding commercial crew) they can always come back at that later point and offer to sell their then-established transportation services. Soyuz per-seat prices after the expiration of the 2017 agreement will almost certainly rise above their $70M levels, making it that much easier for either company to offer a better deal.

        “But those investors will demand their pound of flesh, an ownership stake, likely management oversight, and seats on a company’s Board. Sort of sounds like what the new contracting environment for Commercial Crew will evolve into.”

        This, I think, is going to end up being a key point where we disagree. Investors in a commercial effort like SpaceX don’t necessarily care about the design details of Dragon; how big the seats are, what colors the panels are.. they care about a return on their investment. The multiple layers of authorization, certification, and design review/adjustment that come with a FAR contract, I would argue, have many other motives and less straightforward players such as managers of various departments in different agencies (and the legislators that oversee them) vying for influence and funding. I’m reminded of how the USAF involved itself in the design of the Space Shuttle with the express purpose of ensuring that the Shuttle would meet various military mission requirements, thus obligating it to incorporate complexity and expense that served none of NASA’s objectives.

        If the argument in favor of moving to FAR contracts boils down to “Well, their independence of operation and ability to innovate is going to be inevitably compromised by private investors anyway, so it doesn’t matter if it happens due to government bureaucracy or corporate bureaucracy”, then it seems like a rather craven stance which assumes all attempts to improve the status quo are doomed and not worth even pursuing. I hope that’s not the argument, so what is it? Of course the people I’d really like to answer that aren’t here, they’re on the House committee. But I’d be happy with speculation.

        “Those of us who work in real market-based industries, that is those not funded by collateral-free financial give-always in the hundreds of millions..”

        I probably shouldn’t bother responding to this paragraph since it doesn’t relate to my concern (the rationale for discarding Space Act agreements), but.. It’s interesting that you mention the oil business, since even conservative estimates of government subsidies of oil production are over ten billion annually (the higher estimates placing it in the $50B region). Plenty of “real market-based industries” also rely on what is essentially free government money (US farm bills, Essential Air Service, corn ethanol..) whether it comes in the form of R&D contracts, subsidies, loan guarantees, or tax incentives. I won’t argue that all of that is a good thing, but if commercial space is to be vilified here for being kickstarted by the government, then it should be getting in the back of a fairly long line of greater offenders.

        • In testimony before the Senate in 2012, SpaceX noted that it had paid nearly 10% of the development costs of Dragon and Falcon 9. That certainly is the high-water mark of CCDev financial contribution by participants. If anything, in the course of Commercial Crew, we’ll be lucky if the “commercial” space companies contribute anywhere near 10% of the funding needed to develop their crewed vehicles.

          As for ownership, nobody should deny that it’s a gamble for the government to invest in a company which is developing something the government doesn’t own. But isn’t this is also a fairly routine event?
          I know of no other program where the government has paid for very nearly the full cost of DDTE of a product, allowed the contractor receiving DDTE funding to own that, and all subsequent, items, and have to pay the contractor for use of that capability.

          I would have less of a problem if the government subsequently owned and controlled its Dragon or Falcon 9 hardware. But what we have now is very nearly full-out corporate welfare, a case where the gov’t has paid for a company to develop a capability and then pays the company in order for the gov’t to make use of that capability.

          Indeed, during COTS, failures to meet obligations during development did happen, but since payments to these companies was driven by milestones, the company was simply cut off at that point
          Not true. Yes, RpK was cut-off. If you look at GAO-09-618, you will note that the CCDev contractors were already seriously behind schedule. By mid 2010, it was clear to NASA that the CCDev contractors would not make it to the finish line with the hundreds of millions they were awarded and paid on time, as promised. So what to do? Well, according to the May 2011 GAO-11-692T report, NASA came-up with a new set of milestones, ostensibly to alleviate risk, with an award of an additional $118 for each of SpaceX and Orbital Sciences. By May 2011, NASA had paid SpaceX $258 million under the original CCDev, or 93% of its CCDev funding, and another $40 million between Nov. 2010 and March 2011 for a total of $298 million. Even then SpaceX was over 18 months behind schedule. Orbital was even worse. By May 2011, it had been awarded $157.5 million, or just over 93% of its promised CCDev funding, and another $69 million under the new milestones between Dec. 2010 and April 2011, for a total of $226.5 million.

          Even then, even after this bail-out by NASA, both SpaceX and Orbital were in trouble. Eventually, NASA front-loaded the remaining milestone payments before the milestones were done. And then, SpaceX could not have completed the individual Demo 2 and 3 flights due to lack of funds so NASA collapsed two milestones into one for SpaceX. It helps to have friends in high places.

          Investors in a commercial effort like SpaceX don’t necessarily care about the design details of Dragon; how big the seats are, what colors the panels are.. they care about a return on their investment.
          I don’t think I implied investors were going to be measuring seat sizes or crew arrangements, except as to ensure that the product coming out meets the needed standards for its acceptance, only that they would ask what any investor will, collateral, a seat on the Board, all pretty standard things when you’re putting-in hundreds of millions in to a start-up. And unlike FAR contract rules, investors can, and often do, change management if they feel the company is being run in a manner adverse to the best possible ROI.

          …conservative estimates of government subsidies of oil production are over ten billion annually…
          What I’m about to do to you isn’t personal…

          I have been in the business for 23 years and don’t for the life of me know what subsidies you’re talking about. You’re likely thinking of the Depletion Allowance, which is a tax-deduction. When I pump-out a barrel of oil, I get an allowance for that loss, which can never be replaced. It’s meant to keep people like me from hoarding oil until the prices are ridiculously high before producing. At best, it’s like any other tax deduction, it’s a percentage of the tax rate. So that means the DA allows some lowering of my taxes, but no more than the mortgage-interest deduction and other tax breaks factored in as per the tax-rate. I’m still paying far, far more money to the gov’t than I’m deducting.

          But there’s a hickey to the depletion allowance that no other industry faces; should I sell that field for which I have taken the DA, I have to repay the government the amount I took as a DA deduction. So while the depletion allowance may look good to you, imagine your reaction if, upon selling your house, you had to repay the U.S. Treasury some or all of those amounts you took for the mortgage-interest deduction? Some subsidy!

          But a bit more about the oil & gas business. People talk about risk. So try this on for size. Imagine that every time you went onto a job, you had to plunk cash down, with zero likelihood of getting it back, before you could expect at some point months down the line to start earning? Oh, and there’s a greater than 1:10 chance that, despite that money you have just put down and can no longer take back, your job won’t result in income production because, in our parlance, it’s a dry hole. And if it is a “dry-hole”, guess what? You have to put more money on the table to leave the job, what we call abandoning the well. That job, by the way, doesn’t produce steady income; no, it gives you a few months of flush income production and then begins a nice decline, one you can plot, so you can predict your decline of income. Or the income may be so low that you are happy just to break-even with abandonment costs. And then, when that job has finished producing income for you, guess what? You have to pay more money to close it down. A typical well requires removing the tubbing, several (>6) plugs, and other expensive tasks.

          And then there’s the ever-changing regulatory regime, which costs yet more money. We had an EPA change that dramatically lowered the margins on a field not long ago, even though we were by agreement grandfathered-in. And we won’t even go in as investors in a frack job because it’s a foregone conclusion that some Administration will, likely decades down the road, retroactively change, just as this one did, the regs such that we are on the hook for a lot of money. It would be like the gov’t coming back to you and demanding you pay money because the code you wrote isn’t ANSI 2030 compliant. Still think I’m subsidized? I could go on, but the point is, the only folks around here who are subsidized are the so-called “commercial” space companies. They are pampered!

          When I try, usually unsuccessfully, to explain how the “commercial” space business work, where there is promised money upfront from Uncle Sam, promised purchases of services, will experience very little to no financial downside to the so-called “commercial” space company, people in my business just shake their heads, say that there’s no way that could be true, and think I’m lying only to find-out later all the Sci-Fi stuff I said is true. Only in Washington, DC could such a hair-brained scheme be cooked-up and then presented, voted upon, and funded, and nobody thinks this is absolutely wrong. Want to know why a lot of people in my business have nothing but contempt for Washington? It’s because of scandals like that.

          I seem to recall that our commercial aircraft industry arose without such government payolla, so I can only conclude that the management of the “commercial” space companies can’t hold a candle to Jack Northrop, Mr. Douglas, and those other aerospace pioneers.

          • Karol

            Jim, Thank you so very much for your reply which contains invaluable information that few others have the courage to voice. I have made a hard copy of your reply, have folded it, and sheathed it in my wallet. I shall draw it, like Excalibur, when truth and justice demands. As the heroic Eugene Cernan once said, “Truth needs no defense.” It does, however, need those who do not fear to speak it. Please Jim, keep speaking “truth to power”. I admire you for your integrity and courage Sir, qualities that our beloved United States of America needs now more than ever.