General Dynamics profits suffered in the most recent quarter due to a decline in orders for their Gulfstream business jet units. While there has been some uptick recently in customer interest the whole market for such aircraft is not supposed to recover for several months. The global downturn in the world's economy has hit luxury businesses in a big way with this being just one example.
Of course one entity that has not suffered in its ability to spend money on itself despite the economic problems faced by the United States and the world is Congress. The House inserted an earmark for about $300 million into the 2010 Defense Budget to purchase for the U.S. Air Force four new Gulfstream executive jets on top of the four asked for by the Defense Department.
These aircraft will go to the units stationed at Andrews AFB near Washington, D.C., one of whose primary missions is ferrying Congressmen around the world. These possess a variety of sized aircraft from Boeing 737 to smaller executive jets. They not only fly Congressman but Executive Branch officials, senior military officers and other VIPs.
Within months of taking control of the House Speaker Nancy Pelosi (D-CA) was complaining that there were not enough aircraft available to support her and the House's needs. The use is prioritized and there are not enough to go around. The problem was exacerbated because after 9/11 President Bush allowed the Speaker of the House to use these aircraft for security reasons. Pelosi has a much longer trip then previous Speaker Dennis Hastert and required more support.
The Pentagon and Obama Administration have pushed back on the additional funding claiming it has better uses for it. The earmark also sets a bad precedence for the restructuring of acquisition and contract reform that Secretary of Defense Gates and Obama are trying. Congress is countering that there is a need and that the Air Force really wants them.
Earmarks have over the last twenty years developed into a price of doing business between Congress and the Executive Branch. Some have to be allowed to get support for the overall budget and plans. This is why you often see the leaders of the key committees with the most. It is not that other Representatives do not want to ad them it is just they are not important enough to do it. One of the ultimate ones under the Republican run Congress was Congressman Young (R-AK) adding funds to a transportation bill for an interchange in Florida. He could do it as head of the committee even though no Florida Congressman, Senator or local government really wanted it.
As long as the Federal Government has so much money to hand out to the states, cities and towns there will be earmark issues. Congress has the right to build all of the financial legislation under the Constitution and they ultimately decide how it is distributed. There is no real way they will accept the funding requests from the President without putting their stamp on it. All a President can do is threaten a veto or negotiate with Congress. It is hard to veto a funding bill as they are normally done in a rush to keep the government going.
All this really doesn't matter to General Dynamics, though, as they are probably happy with the idea of four more aircraft next year.