OMT One Man's Trash...from Norman Leahy



Wednesday, May 03, 2006 :::
 

Virginia's Senators Vote to Bailout Northrop

The latest of Sen. Tom Coburn's amendments to strip pork out of the "emergency" spending bill now before the Senate centered on a proposed $500 million relief package for Northrop Grumman. The amendment failed by a vote of 51 to 48. So how did Virginia's senators cast their ballots?

Both Allen and Warner voted in favor of the Northrup bailout.

Now how on God's green Earth can a self-described "Jeffersonian conservative" like Allen justify throwing half a billion taxpayer dollars at one of the nation's largest and most financially sound defense contractors?

Politics, for one:

Shipbuilding alliances along the East Coast helped deliver the Virginia and Maine delegations for the provision. Mr. Lott painted the insurance industry as the villain in the piece by not stepping forward to cover more of Northrop Grumman's storm losses.

And let's not forget elections...Northrop is a major regional employer, and Allen is probably loathe to cast a vote that would upset either the company or its employees.

So while there are any number of political rationalizations available to cover his vote, they cannot mask the abandonment of principles -- not only on grounds of fiscal responsibility, but on contracts as well. Trent Lott cast this as a battle between greedy insurance companies and long-suffering Hurricane victims in need of relief:

Opponents led by Sen. Tom Coburn (R., Okla.) made the opposite case: That the provision itself endangered free enterprise by bringing the government into a fight between Northrop Grumman and its insurer, Factory Mutual Insurance Co., of Johnston, R.I. "This is just a step too far," Mr. Coburn said. Northrop Grumman must reimburse the government for what it recovers in its suit against Factory Mutual, but the Navy's short-term exposure could be at least $140 million to $200 million.

I'm very interested to see Allen's justification for this vote (nevermind Warner's...that was a given). Considering his oft-repeated fidelity to free-market principles, limited government and fiscal responsibility, it ought to be a doozy.



::: posted by Norman Leahy at 5/03/2006 0 comments





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