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Northrop Grumman Exploits Taxpayers With $500 Million Earmark

Company’s insurance provider should pick up the tab

We already know our federal government has a fancy for paying for bridges and railroads to nowhere. But there’s another earmark being debate on the Senate floor today that may take the cake.

Northrop Grumman, a defense contractor that specializes in building ships for the Navy, managed to slide an earmark into the emergency spending bill making its way through Congress. The price tag — $500 million — covers “disruption costs” incurred by Hurricane Katrina.

What is so egregious about this particular slice of bacon is that Northrop Grumman has predicted its insurance company, which it is currently in litigation with, will cover these very costs! The federal government is effectively telling the insurance company, “Don’t worry about it, our guys will foot the bill.” (Those guys being you, the taxpayer.)

The White House, which has threatened to veto the bill, said it would, “[create] an incentive for insurance companies to deny payments,” and called for its removal.

Sen. Tom Coburn (R.-Okla.), who has aggressively led the charge in the Senate to crack down on earmarks, has authored an amendment to snuff out the provision. “The American people are sick of wasteful government spending,” Coburn said. A vote on the amendment is expected later today.

Shameless lawmakers have found attaching pork to expansive appropriations bills that carry such earnest monikers as “Iraq” and “Katrina” is just too easy to resist no matter how brazen it may be. Sen. John Cornyn (R.-Tex.) said the bill “should not be used as a Christmas tree to hang extraneous spending measures on. There’s very much a consensus building that that’s bad.”

Americans for Prosperity’s Ending Earmark Express, a nationwide grassroots bus tour intended to bring attention to egregious earmarks, held a news conference in front of Northrop Grumman’s office building in Arlington, Va., yesterday.

“We have a great deal of respect for what Northrop Grumman does to keep our military strong and our nation safe, but with $30 billion in revenues last year and private insurance that they expect will cover their losses, they certainly don’t need a $500 million ‘emergency’ bailout from the taxpayers,” said Tim Phillips, president of Americans for Prosperity.

Joining them in Arlington were other free-market groups, including the National Taxpayers Union, Club for Growth and the American Conservative Union, whose executive vice president, Bill Lauderback, said what the Senate is doing is “dead wrong.” “Northrop Grumman has had a 25% increase in its stock price since Katrina,” Lauderback said. “In other words, they are in no need of a half a billion dollar bailout from the tax payers.”

NTU’s Vice President for Communications Pete Sepp pointed out that “The $500 million that is immediately at stake with this earmark could trigger a much bigger disaster for taxpayers if it becomes law. By forcing the Navy to cover one firm’s business costs for contracting delays, Congress will virtually ensure that more snouts will be coming to Washington’s trough of tax dollars for the same sweet treatment.”

Senate Appropriations Chairman Thad Cochran (R.-Miss.) has fought against removal of the Northrop Grumman earmark and others that Coburn has attempt to strip from the bill. Meanwhile, the federal budget deficit continues to balloon. It stood at $760 billion last year.

UPDATE — 5:09 a.m.: Not that it should come as a surprise, considering the degree of fiscal recklessness that has our federal government in a spending tizzy, but the Senate today once again showed off its elephantine stature of imprudence by voting down Coburn’s amendment to remove the $500 million dollar earmark for defense contractor Northrop Grumman, 52-47. Sadly, 28 of those 52 spendthrifts were Republicans.   

Lets not forget who’s paying for this.

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Written By

Mr. Casey interned at HUMAN EVENTS during the spring of 2006.

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