Senate Appropriations Chairman Thad Cochran, R-Miss., has added language to the fiscal 2006 emergency supplemental to require the Navy to pay for up to $500 million that shipbuilder Northrop Grumman Corp. could lose as a result of post-Katrina contracting delays.Trent Lott, Mississippi’s other Republican Senator, is predicting the payout will be on the low end:
Payments to Northrop could range anywhere from $150 million to the full $500 million out of up to $2.7 billion in appropriated funds for Katrina-related damage, depending on the outcome of negotiations. That could defer necessary Navy expenditures for a year or more.
Lott says $140 million would be provided by the Navy to Northrop Grumman. He said the money would compensate the shipbuilder for uninsured hurricane-related costs, some of which are still in negotiation with insurers.Ah, the insurers:
Northrop already has received $500 million in insurance coverage to pay for facilities damage, but is suing its insurer, Factory Mutual Insurance Co., for another $500 million for costs resulting from delays at its major shipyards at Ingalls, Miss., and Avondale, La.While Northrop Grumman is waiting for insurance money that might not come, it wants the government to advance the money they would like to receive. Of course, they will pay back whatever they get in insurance payments and, presumably, keep the rest if they get less than $500 million from their insurance company.
They must really be hurting if they need this quick infusion of cash to keep them going. Or not:
In 2004, Northrop Grumman's part-time board of directors paid themselves $81,555 in cash and stock for their duties overseeing the country's third-largest defense contractor.I am sure they worked hard for that raise. How much they worked for it, we don’t know:
They doubled that to $165,060 last year.
This year, they'll increase their pay by more than 20 percent to at least $200,000. Over a two-year stretch, that's a 147 percent increase to their basic annual compensation.
But a study by The Corporate Library found that the average director at publicly traded companies around the country spent 191 hours a year - or about 3.7 hours a week - on their board duties in 2005. That's up from 155 hours a year - or about 3 hours a week - two years ago.Northrop Grumman’s earnings are down this quarter, but they don’t seem too worried:
If Northrop's independent board members spent 3.7 hours a week on their director duties in 2005, their $165,060 average compensation translates into $864 an hour. The $200,000 minimum director pay this year would translate into $1,047 an hour.
"Overall we had another very solid quarter, and we are on track to achieve our fourth consecutive year now of double-digit earnings growth," chief executive Ron Sugar said during a conference call with analysts.I don’t think Northrop Grumman deserves this money. Normally, I would not care if they got it or not. But, this time, Louisiana’s recovery is depending on this bill passing and not getting vetoed, as the President has threatened to do if the overall spending isn’t lowered. And some people are pointing to Northrop Grumman’s money grab as a reason to veto:
Memo to Bush: Veto this porkerPut. The pen. Down.
The White House and the Navy both opposed the measure, which might have passed the Senate only because the chairman of the Appropriations Committee, to whom other senators always want to be able to turn for a pork-barrel favor, is from - you guessed it - Mississippi, Sen. Thad Cochran.
Bailing out the company in this way is a bad precedent. Business owners ought not be given the idea that they can count on the government, instead of carefully selected insurance, for disaster losses.
The president threatened a veto if the “emergency” spending bill exceeded $94 billion. As approved by the Senate (by a 71-21 vote) it stood at $109 billion. House Republican leaders are vowing to hold the line on spending. (Their earlier version of the bill was $17 billion less than the current Senate version.) The nation - and their own president - are depending on them.
And Bush - to preserve his own shaky credentials for fiscal prudence - should get that veto pen ready.
Even if the House doesn’t cut the pork, we in Louisiana need this bill to pass. Maybe Bush can focus his newly found fiscal responsibility in other areas:
The Senate Armed Services Committee on Thursday approved a $517.7 billion 2007 defense authorization bill, including $50 billion for war operations, the panel said in a press release.Make levees, not war.