Merkley takes on tanker contract

Rep. Jeff Merkley is going on the offensive against Sen. Gordon Smith, and what the Speaker regards as the Senator’s implicit part in the awarding of an Air Force tanker contract to the combined forces of Northrop Grumman and the European Aeronautic Defence and Space Co. (EADS) over Boeing, the heavy favorite to win the bid.

Over the past week, the Speaker—a former Presidential Fellow in the office of the Secretary of Defense—has been fingering Sen. Smith’s 2003 vote for Sen. John McCain’s amendment exempting the Department of Defense from the Buy American Act as further evidence of his claim that Smith has continually sided with special interests instead of creating and protecting jobs in Oregon. The Act sprang back into the public eye last month, when Boeing lost the $35 billion air tanker contact.

The contract, which provides a politically charged snapshot of outsourcing – with Europeans building American planes – has become ground for electioneering on all levels. Sens. Obama and Clinton have joined other politicians in suggesting that the outcome reflects the Bush administration’s policies which have resulted in moving jobs offshore.

Rep. Todd Tiahrt (R-Kansas), where some of Boeing tanker assembly would have been located, told the Seattle PI that “It's outsourcing our national security. An American tanker should be built by an American company with American workers."

Merkley, who has been working with Sen. Patty Murray (D-Washington), capped off his own earlier criticism of the contract with a plan intended to reverse the deal. He announced his plan today at the Boeing Manufacturing Facility in Portland, where he was joined by a leader of a union representing Oregon’s Boeing employees.

"American tax dollars should not be used to outsource American jobs and create family-wage jobs overseas," said Merkley. "This is a threat to our national security and it is one more sign that our country and our government in Washington D.C. have gotten severely off track. I am urging Congress to launch a full investigation, strengthen the Buy American Act to ensure that this never happens again, and end the unfair trade agreements that have sent 70,000 Oregon jobs overseas," Merkley said.

Merkley called on members of Congress to join Rep. John Murtha (D-Penn.), Chairman of the House Military Appropriation Committee, to block funding for the contract unless the Air Force, following a full congressional examination, can make a compelling case for the decision.

The Air Force, for its part, insists that it chose the better plane.

Sue Payton, the assistant secretary of the Air Force, at hearing before the Defense Appropriations subcommittee last week, said: "Northrop Grumman brought their A game."

A report from Sen. Murray’s office indicates that had the contract been awarded to Boeing, it would have created 225 jobs in Oregon. Boeing planned to manufacture 85% of the tanker components in America, while Northrop claims they will manufacture 60% in the U.S.

Analysts, however, have suggested that the debate between European versus American jobs oversimplifies the issue; a better question might be whether the 1990s, a period when military spending slowed and defense contractors consolidated, left the government with limited domestic options.

Jon Kutler, chief executive of Admiralty Partners, a firm that invests in defense companies, told the PI that "The Defense Department is sending a message: On major contracts, don't be assuming we have no other options. It's a global marketplace."