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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: combjelly who wrote (287306)	5/9/2006 7:55:48 PM
From: tejek	Respond to of 1588429

US Senate backs funds for Northrop hurricane losses Tue 2 May 2006 4:44 PM ET By Andrea Shalal-Esa WASHINGTON, May 2 (Reuters) - The U.S. Senate on Tuesday backed a plan to give Los Angeles-based Northrop Grumman Corp <NOC.N> up to $500 million for business disruptions at its Mississippi and Louisiana shipyards after last year's devastating hurricanes. By a vote of 52-47, the Senate defeated an amendment by Sen. Tom Coburn, an Oklahoma Republican, to remove the funding from a $106.5 billion emergency spending bill to finance the war in Iraq and hurricane rebuilding. The Northrop Grumman measure is intended to provide bridge funding while the company battles with its insurance company, Factory Mutual Insurance Co., in court about the money. It would require Northrop to reimburse the government when and if it won reimbursement from the insurance company. Northrop had no immediate comment. The White House and the U.S. Navy oppose the measure, which they say could set a dangerous precedent and decrease incentives for insurance companies to pay out claims. President George W. Bush has threatened to veto the emergency spending bill if it contains too many measures like this one. Fiscal conservatives like Coburn, complaining about the high cost of the spending bill, have been trying to shave around $12 billion from it by arguing the funds were not essential. But the projects, backed by the chairman of the Senate Appropriations Committee, Sen. Thad Cochran, a Mississippi Republican, have survived so far. Last week, Coburn narrowly failed in a similar attempt to kill a $700 million project to move a CSX railroad line in Mississippi. 'LUDICROUS' "The president has requested that we not do this" payment to Northrop, Coburn said. Coburn's spokesman, John Hart said, "He thinks it's ludicrous to force the American taxpayer to bail out a corporation that is awash in profits when people in New Orleans are still trying to remove debris and find housing." But Cochran who initially added the measure to the bill disagreed. "We're seeking to acknowledge that the shipbuilder was impeded by the hurricane from doing contracts for the Navy," he said, and warned that without the emergency funds, the cost of future military contracts could escalate. The Navy fears that the measure could further raise the cost baseline for already expensive shipbuilding programs. The House-passed version of the spending bill did not contain similar language and senators opposing the measure hope to remove it later in the legislative process. Defense analyst Loren Thompson said the measure made sense because the U.S. government was Northrop's only customer. "If it doesn't get the money, at some point down the road, Northrop is going to have to raise the cost of building warships to cover the cost of doing business," said Thompson of the Virginia-based Lexington Institute. Arguing in favor of the funds for Northrop Grumman, Sen. Trent Lott, a Mississippi Republican, said, "This is personal with me. This is my home town. I grew up in the shadows of this shipyard" that he said provided jobs for 13,000, making it the "the biggest employer in the state of Mississippi." (Additional reporting by Richard Cowan) today.reuters.com