The White House said yesterday that it would veto the FY2013 National Defense Authorization Act (NDAA) if it passed Congress in its current form.  The House will begin debate on the bill, H.R. 4310, today.

The White House veto threat was just one shot fired in the escalating debate over the nation’s economic future as the election season ramps up.  Though not an economic issue, one of the provisions to which the White House objects would prohibit the Administration from agreeing to an International Code of Conduct for space activities without the advice and consent of the Senate or unless it is authorized in law.

The NDAA authorizes funding and provides policy guidance for the Department of Defense (DOD) and related activities.   In last year’s Budget Control Act (BCA), Republicans and Democrats on Capitol Hill and the White House agreed to drastic cuts in federal spending in return for congressional approval to raise the debt ceiling.   The House, however, has reneged on that deal.  It passed a bill last week exempting DOD from the spending cuts and imposing those cuts on other parts of the budget, particularly food stamps and other entitlement programs.

In its Statement of Administration Policy (SAP) on the bill, the White House says it will veto the final version of the bill “if the cumulative effects of the bill impede the ability of the Administration to execute the new defense strategy and to properly direct scarce resources” or if it contains language that would “impinge on the President’s ability to implement the new START Treaty and to set U.S. nuclear weapons policy.”

The SAP has a lengthy list of other provisions to which the White House objects.  One is opposition to Section 913, which would prohibit the President from agreeing to an International Code of Conduct for space activities without the advice and consent of the Senate or unless it is authorized by law.   Under the Constitution, treaties are subject to the advice and consent of the Senate, but the Administration argues that the space Code of Conduct would be a voluntary agreement with no enforcement provisions, not a treaty, and thus not subject to congressional action.   The extent to which the White House would consult with Congress before agreeing to a space Code of Conduct has been a sticking point since the concept emerged.

The European Union (EU) drafted a Code of Conduct for Outer Space Activities in 2008 and released a revised draft in October 2010.   In January 2012, Secretary of State Hillary Clinton announced that the United States would work with the EU and other countries on finalizing a version of the agreement after bringing more countries into the discussion, a process expected to take several years.  A major theme of the agreement is space sustainability — ensuring that the space environment remains usable in the future  — by defining responsible behavior so those who behave irresponsibly can be singled out.    A Chinese antisatellite (ASAT) test in 2007 and the accidental collision of an American commercial Iridium communications satellite and a defunct Russian Kosmos satellite in 2009 created thousands of pieces of space debris in the most heavily used part of low Earth orbit.  Those events prompted calls for limiting the creation of space debris and enhancing space situational awareness so countries and companies operating in space know the current and projected locations of satellites and debris so collisions can be avoided.

Some members of Congress, however, are concerned that the Code of Conduct is a back-door approach to arms control in space that could limit U.S. options.  They do not want the Administration agreeing to anything without their approval.   In the SAP, however, the Obama Administration said that Sec. 913 of the NDAA “encroaches on the Executive’s exclusive authority to conduct foreign relations and could severely hamper U.S. ability to conduct bilateral space cooperation actitivies with key allies.”

While important enough to make the list of Administration objections to the House version of H.R. 4310, the Code of Conduct is likely to be a minor issue compared to the funding disputes.   The sharp differences between Republicans and Democrats over how to reduce the federal deficit were once again brought into sharp relief yesterday as House Speaker John Boehner vowed not to approve another increase in the debt limit without deep spending cuts that nonetheless protect the defense budget.  Republicans continue to insist on not increasing taxes and, in fact, say that they will extend the Bush-era tax cuts that will expire at the end of this year.  Democrats want to reduce the decifit by a combination of spending cuts and tax increases and the President insists that he will not approve an extension to the Bush-era tax cuts for wealthier individuals.

The expiration of those tax cuts, and harsh spending reductions to defense and non-defense discretionary spending under the sequestration provisions of the Budget Control Act that automatically take effect on January 1, 2013 unless Congress changes the law, are driving the political and fiscal debate in Washington.  Sequestration could have dramatic consequences for the aerospace industry according to the Aerospace Industries Association (AIA).  It is leading the drive to raise awareness of what could happen to the U.S. aerospace industry if Congress and the White House do not agree on a different course of action.

The House will continue debate today on the FY2013 National Defense Authorization Act (NDAA), H.R. 4310, turning its attention from general debate to a long list of amendments.

One of those many amendments (click on “amendments” tab) could change the export control environment for commercial satellites.  Amendment 152, offered by Representatives Adam Smith (D-WA), Howard “Buck” McKeon (R-CA and chairman of the House Armed Services Committee), Dana Rohrabacher (R-CA), and Kevin McCarthy (R-CA and House Majority Whip) would authorize the President to remove commercial satellites and related components from the U.S. Munitions List (USML).  The Administration would have to submit various determinations and reports, and exports to certain countries are prohibited, but in essence the amendment would restore to the President the authority to make the decision on whether commercial satellites are governed by the USML or the Commerce Department’s Commerce Control List (CCL).   Congress took away that authority in the FY1999 National Defense Authorization Act in the wake of the “Loral-Hughes” controversy where Congress found that those companies had assisted China in developing missile capabilities by helping them determine why several Chinese launches of U.S.-built communications satellites failed.  

China is on the list of countries to which exports of commercial satellites still would be prohibited.  The others are Cuba, Iran, North Korea, Sudan, Syria, and “any other country with respect to which the United States would deny the application for licenses and other approvals for exports and imports under section 126.1 of the International Traffic in Arms Regulations” or ITAR.

The amendment comes in the wake of a long-awaited report from the Departments of State and Defense — the “section 1248 report” — on the national security implications of moving commercial satellites and their components from the USML to the CCL.  The U.S. commercial communications satellite industry has been arguing stridently for more than a decade to ease export controls for their products arguing that European competitors are benefitting by making “ITAR-free” satellites that are not subject to U.S. export control regulations.