The Washington Post February 09, 2003
Shuttle History Reveals Years of Shifting Funds
Upgrades Were Shortchanged
By R. Jeffrey Smith, Eric Pianin, James V. Grimaldi and Greg Schneider
Washington Post Staff Writers
It was one of those obscure bureaucratic budget gimmicks that hardly raised an eyebrow when President Clinton unveiled his 1995 budget.
For years, NASA's elite space shuttle operation had its own special spending category in the federal budget, but suddenly it was being lumped in with the International Space Station under "human space flight." With one deft stroke, NASA officials had linked the Columbia and three other aging space shuttles to the fate of the much larger, more expensive and highly troubled joint space station venture with the Russians.
Rep. F. James Sensenbrenner Jr. (R-Wis.), the ranking member of a House space and aeronautics subcommittee at the time, says he bitterly complained that NASA was playing a shell game. "The net effect was less money for the shuttle," he said. "It allowed money to be transferred out of the old shuttle account and into the space station account to cover cost overruns without a requirement of notification to Congress."
Such transfers enabled NASA to shift funds from one budget-busting program to another, keeping struggling programs afloat while shortchanging safety upgrades and technical enhancements, according to lawmakers and independent commissions. All this has abruptly come into view since the loss of seven astronauts aboard the Columbia shuttle on Feb. 1.
Today, the entire U.S. manned space flight program faces paralysis: a grounded shuttle, a threatened space station program, and a cancelled effort to replace the shuttle with a new spaceplane. The notion that the U.S. manned space effort could be hobbled so quickly -- and possibly merely from the impact of 2 1/2 pounds of foam during the Columbia's launch on Jan. 16 -- is staggering.
Looking back, however, the signs of trouble were all around: inside NASA, at aerospace contractors, on Capitol Hill and elsewhere within the federal government. Unrealistic expectations, inadequate resources, incompetent financial management, congressional tinkering and technical compromises all combined to sabotage NASA's goal of economically, routinely, and safely placing man in the inhospitable environs of space, according to former NASA officials, federal budget officials and lawmakers.
The U.S. manned space program has never been short on ambition, just cash and practical results. Its architects have long had a bold dream: a fleet of cheap, reusable spacecraft to ferry satellites into space and scientists to an orbiting space station. The shuttle was conceived in the early 1970s as the first generation of these vehicles. A newer, privately owned "follow-on" vehicle was supposed to be ready a few years from now.
Each of these three -- shuttle, space station and follow-on -- formed one leg of the manned space flight stool. But the 1995 decision to pool their budgets under a single NASA office forced the programs into a fierce and ultimately debilitating yearly competition for just $6 billion.
NASA said it has never compromised safety. "We focus on safety, and it is our number one priority," said Michael Greenfield, associate deputy administrator and former NASA safety official. "We will not fly unless it is safe under any circumstances."
But the implications of the accident are large.
The shuttle is now grounded indefinitely. Since the calamity, the White House has shied away from endorsing its previous plans to keep operating the shuttles -- already the most costly objects the U.S. government has ever made -- for years to come.
The space station, an uncompleted assemblage of cramped capsules slung beneath solar panels the length of two football fields, is now years behind schedule and will eventually cost at least $17 billion more than its initial budget. It now has a crew of two Americans and a Russian, whose labors are devoted almost entirely to housekeeping, not science. But the crew may have to be withdrawn and the station shuttered this summer because its crew, water supply, and other systems need replenishment by both the grounded shuttles and Russian spacecraft.
Finally, the shuttle's replacement, a supposedly cheap aircraft-spaceplane hybrid originally slated to be on NASA's runway by 2005, fell prey to technical problems, excessive costs and the collapse of the commercial space market. An alternative craft is still under study, but the technology exists now mostly in computer diagrams.
On Wednesday, at a planned joint hearing of the Senate Commerce, Science and Transportation and House Science committees, some lawmakers intend to ask whether NASA was "asking for the right amount," said Rep. Sherwood L. Boehlert (R-N.Y.), chairman of the House Science Committee. But he acknowledged Congress may also want to look in the mirror: "Was a statement from NASA that 'yes, what we have is enough for safety,' good enough? Should we have pressed it further?"
NASA's $15 billion annual budget has been flat for a decade. The Bush administration proposed nearly $800 million in cuts last year before reversing field last week -- after the shuttle disaster -- and proposing a $760 million increase for the coming fiscal year. All told, the government has invested more than $60 billion in the shuttle, space station and new spaceplane development.
Few have suggested so far that budget belt tightening during the turbulent past decade of the space program led directly to the Feb.1 catastrophe that took the lives of seven astronauts. But the question remains: Did the nation's leaders overreach in the 1990s by trying to sustain both a space station and a shuttle fleet while simultaneously attempting to develop a new generation of manned spacecraft?
'Faster, Better, Cheaper'
The space shuttle has been the engine driving the space program for nearly 30 years. It initially was sold as the ultimate in versatility. A May 1988 Congressional Budget Office study noted that "virtually every part of the NASA program depends on the shuttle," which lay at the core of the agency's plan for routine space operations.
Until a week ago, the most tumultuous event in the shuttle's history was the January 1986 explosion of the Challenger, which provoked sweeping changes in the shuttle's operations and $1 billion worth of modifications, all meant to guarantee its safety for future flights. The changes were ordered after an independent panel, known as the Rogers Commission, concluded that NASA officials and contractors had ignored hazards, communicated poorly with management, and sacrificed standards to stay within budget limits.
Henceforth, the panel said, NASA should only fly shuttle missions at a rate it could safely afford.
The accident and the resulting hiatus in shuttle flights battered NASA's plans to achieve more than a dozen shuttle flights annually and try to make the shuttle competitive with unmanned rockets in the satellite-launching business. And the agency quickly regained its reputation on Capital Hill for overspending and under-performing. So it was not long before President George H. W. Bush decided that what NASA needed was an infusion of corporate thinking.
Bush recruited a hard-headed California aerospace engineer and executive named Dan Goldin to take over the agency. Then, after the Clinton-Gore ticket swept to victory in 1992, Vice President Al Gore persuaded President Bill Clinton that Goldin should stay on. Charismatic and abrasive, Goldin boasted that he could do things "faster, better, cheaper," and that became his mantra during a stormy, nine-year tenure atop the space agency.
It was Goldin who, in 1996, signed over management of the shuttle program to United Space Alliance, a joint venture of NASA's two biggest contractors, Boeing Co. and Lockheed Martin Corp. Sporting the red, white and blue company colors, United Space promised to save the shuttle $400 million over six years. But the National Research Council would conclude three years later that the alliance's contract contained financial incentives only for investments in efficiency, not in modernization and safety improvements.
The privatization came amid a drive by Goldin to slash NASA's Washington headquarters staff by more than 50 percent, partly through employee buyouts and partly by abruptly transferring shuttle program managers to Texas. Some of those who left were the youngest employees; the manned space flight office ended up with twice as many workers older than 60 than younger than 30, a matter of concern to NASA.
The turmoil helped earn Goldin the NASA nickname of "Captain Chaos" and -- according to some headquarters employees -- sowed such ill will that Goldin installed a special lock at the entrance to his office suite.
Goldin's innovation was to bring private management techniques, including decentralization and rigorous performance targets, to a bureaucracy long viewed as top-heavy and sluggish. "He was dancing around, showing that we were going to be leaner and meaner," said a top former NASA official.
From 1993 to 1997, Goldin proudly cut overall shuttle spending by $1 billion per year -- 25 percent. He also slashed spending on safety and performance upgrades by 50 percent, according to NASA's figures. At the same time, he insisted the agency service the space station's need for parts by maintaining six to eight launches a year.
All the while, NASA claimed that safety was vastly improved -- from 1992 to 1999, it said, the risk of "catastrophic loss on ascent" dropped by precisely 82 percent.
NASA's independent safety advisers expressed concern as early as 1996. But real anxieties did not set in until July 1999. That year post-flight examinations of two shuttles revealed that one had nearly suffered a disastrous engine mishap and the other had nearly deployed its landing parachute during launch. A review panel of the government's top aerospace experts blamed sloppy management and workmanship.
The panel's resulting 120-page critique of NASA and United Space used language reminiscent of the Rogers Commission report 14 years earlier. It faulted the agency for failing to implement key recommendations by independent safety advisers, for relaxing maintenance standards without regard for risk and for showing little curiosity about the aging of critical shuttle parts.
"In spite of the clear mandate . . . that neither schedule nor cost should ever be allowed to compromise safety, the workforce has received a conflicting message due to the emphasis on achieving cost and staff reductions, and the pressures placed on increasing . . . flights" to service the space station, the panel said.
John C. Macidull, an accident investigator who served on the Rogers Commission staff, said safety was a priority after the Challenger accident but that complacency set in over the years. "I think safety just got put on the back burner," he said.
Clinton administration officials today deny they saddled NASA with a risk-taking legacy. Greg Simon, the science adviser to Gore from 1991 to 1997, said the administration's budget cuts did not harm safety. "I totally, absolutely deny that we took money out of the shuttle budget" for other manned space programs, Simon said. "We would never cut back on the safety budget." Leon Panetta, Clinton's budget chief, said the NASA administrator "spent an awful lot of time fighting funding battles on Capitol Hill. That might have distracted his attention as to exactly now that money was being spent."
Goldin declined to discuss policy in the wake of the Columbia disaster. "I believe that it would be inappropriate for me to comment at this time to any members of the media," he wrote in an e-mail to The Washington Post. But an official NASA biography praised him for transforming "a bloated bureaucracy pursuing missions that were too expensive, took too long to develop, and flew too infrequently" into one that provides "high value to the American public without sacrificing safety."
Space Station Overruns
Goldin also played a key role in rescuing NASA's plan for a manned space station. Conceived in 1984 by President Ronald Reagan, who later named it "Freedom," the station experienced substantial cost overruns in its first eight years, with the total price tag ballooning from $8 billion to $14.4 billion.
And so, just as the fabrication of key station components was finally getting underway in 1993, Panetta warned Goldin that looming budget cuts threatened cancellation. Goldin countered that without the space station there was no need for the Space Shuttle program. If both collapsed, there would be no manned space program, and NASA would have little purpose. He asked for more time to propose a slimmed-down space station.
Goldin emerged victorious from a showdown later that month in the Roosevelt Room. Panetta argued that the administration could hardly justify continuing the space station when it was preparing to propose cuts in Medicare, housing and education. This was, after all, the moment when Republican opposition to big government was surging.
But Simon, the science and space adviser, sided with Goldin. He recalls telling Clinton, "Mr. President, the space station is the kind of thing that great nations can do and should do. . . . This is something we can't walk away from."
Over the next several months, Goldin and other officials brainstormed over a new space station design, one that would cut its projected budget by almost $5 billion. But Congress was sorely divided over continuing a project that had dwindled in scope and purpose.
Reagan had advertised the station -- to be built largely by corporations based near his Southern California home -- as a permanently manned lab, space factory and staging platform for missions to Mars. But industry showed little interest in manufacturing in space. Neither Bush nor Clinton had found much support for a costly mission to Mars. That left scientific research as the station's sole function.
On June 23, 1993, the House voted 216-215 to authorize spending almost $13 billion through 2000. Then international politics intervened to add impetus to the project: Gore's national security adviser, Leon Fuerth, seized on the notion of joint U.S.-Russian work on the space station as a way to keep impoverished rocket scientists in the former Soviet Union from selling their skills to rogue nations.
Fuerth conceived the International Space Station -- a joint operation in which the United States, Russia and other nations would share in the cost, construction and operation of the floating science lab. Officials boasted the deal would save the United States $2 billion in salaries and overhead. Goldin and Russian space administrator Yuri Koptev toasted the deal with inexpensive Spanish champagne served in plastic cups in late 1993.
It was around this time that NASA officials began preparing the president's budget for fiscal 1995. In previous years, the space station had been kept in a separate research and development account, away from the shuttle's own reservoir of funds. But the new budget blurred these lines under a new category called "Human Space Flight," which combined the shuttle, the space station, and the budding "US/Russian Cooperative Program."
Bringing in the Russians came with a special cost: To permit Russian Soyuz and Progress space vehicles to reach the station from their launch pad in Kazahkstan, the station's planned path in orbit was altered. The result was that each shuttle flight would have to carry more fuel and fly farther to dock with the station in space, at a higher cost.
Moreover, problems with the Russians were legion. For example, NASA assigned Russia the task of building a central module, a critical element that would house crew members and controls for adjusting the space laboratory's course. "That was a big turning point," said an industry official familiar with the program who asked to remain anonymous. Delays in completing the module set back the entire program.
Another mistake, according to the official, was sending payments to the Russian government rather than Russian industry. "The government took not only a haircut, it shaved its head," the official said. "They used it to pay their bills, and industry said, 'I'm not gonna build it, because I'm not getting paid to build it.' "
Despite the problems, Simon defended the Russian participation in the project. "They built an air lock for $25 million. The U.S. contractor wanted to charge $250 million. Which would you do? And their air lock had been tested and tried in outer space."
W. Henry Lambright, a Syracuse University professor who has studied NASA for three decades, said that "once the space station was linked to national security policy, then the administrator of NASA lost a lot of his power. A lot of decisions had little to do with cost-effectiveness."
By 1997, the project was more than a year behind schedule and ballooning in cost. After the Russians repeatedly missed payments on the joint project, NASA transferred $200 million from a shuttle reserve fund into the space station program. The following year, Goldin diverted additional NASA funds to help keep the Russian part of the program afloat. Hundreds of space station-related jobs at the Kennedy Space Center were cut in 1999.
"There was just all kinds of manipulation of funds going on," said Dana Rohrabacher (R-Calif.), now the chairman of the House Science subcommittee on space and aeronautics. "We didn't know where they were getting the money to do the things they were doing on the space station."
Many members of Congress celebrated NASA's expenditures in their own districts. The value of "earmarks" for pork-barrel space agency projects -- ranging from private jets to college dormitories -- rose fivefold from around $100 million in the six years after 1996.
But other members of Congress, whose constituents did not benefit from the space station program, began to bore in on the agency for wasteful spending. They cited complaints by the General Accounting Office that NASA's bookkeeping practices were so antiquated it had no way to audit the program. Sen. Barbara A. Mikulski (D-Md.), who during the mid-1990s was chairwoman of the Senate appropriations subcommittee that controlled NASA's budget, said, "I was very concerned about the $4 billion of cost overruns. . . . I was concerned that the space station was slurping up the money."
In the spring of 1997, Sensenbrenner and Reps. David Joseph Weldon(R-Fla.) and Rohrabacher flew to Moscow to monitor Russian progress on the key module. They returned to Washington convinced the Russians couldn't be trusted to finish it. Sensenbrenner and then-House member George E. Brown Jr. (D-Calif.) urged Gore to pull the plug and allow Congress to appropriate special funds for the project. Gore rejected the advice, Sensenbrenner said, on grounds that it would have angered the Russians.
After George W. Bush was elected, his administration never reviewed or updated the 1996 Clinton national policy on manned space flight, including the orbiting station. But Bush cancelled plans to replace an escape module affixed to the station that can return to Earth in an emergency -- now capable of holding three people -- with a larger, seven-person vehicle costing more than $1 billion. The decision, attributed to a $4.8 billion cost overrun estimate on the station that year, limited the laboratory to a three-person staff that devotes more than 80 percent of its time to maintenance.
A National Research Council report pointed out last September that as a result, the United States is spending more than $25 billion so that three scientists can perform just 20 hours of scientific work in orbit weekly. Under agreement with Russia, the U.S. share is 7.5 hours. This is mostly directed toward answering NASA's own questions about human biology in space.
Spaceplane Siphons Funds
In the mid-1990s, as NASA absorbed the space station's financial drain, the Clinton administration seized on a potential rescuer: corporate America.
NASA desperately sought a cheaper and more modern, manned alternative to the 1970s-era shuttle, but Congress balked at the multibillion-dollar price tag. So the agency decreed a unique partnership with a longtime space contractor, Lockheed Martin, and awarded a $1.3 billion contract to Lockheed in 1996 to design and test a spaceplane known as X-33 or VentureStar.
Their deal was that if the new technology worked, Lockheed would build the craft at its own expense and operate it as a for-profit venture. NASA would shift from spaceplane owner to renter, standing in line for space access with other paying customers. The idea seemed liberating to many officials at the agency. Goldin suggested NASA could get back to pure science and planetary exploration, its undisputed strengths, and make robots that would fan out through the Solar System.
Lockheed, meanwhile, dreamed of hitching its sagging fortunes as a military contractor to the booming high-technology communications and Internet industries. It projected they would vie for the chance to put their satellites in VentureStar's payload bay and upgrade them later during space walks. It was not a far-fetched idea: U.S. private spending on space had doubled in the late 1990s to roughly $6 billion a year and 27 launches a year, while NASA and military space spending stayed flat at nearly $12 billion apiece.
As Lockheed wrote in its promotional materials, the VentureStar was "designed for the journey from NASA to NYSE."
NASA was so optimistic that in 1996, it froze the shuttle's design so it could divert funds to the new program. The freeze was lifted one year later, but NASA still declined to commit to major shuttle upgrades until a decision was made on the VentureStar at the end of the decade. It authorized only $100 million a year for shuttle improvements, including safety measures, an amount that the National Research Council judged too meager to accomplish anything more than relatively "minor modifications" of short-term benefit.
"All kinds of safety improvements . . . could have been put into the shuttle," said John Pike, a space program expert at GlobalSecurity.org. But "they didn't under the theory that there's no payoff . . . [for] a system that's only going to fly for the next few years."
NASA thought the program would achieve success with minimal oversight by fewer than two dozen government employees. But problems with the VentureStar arose swiftly. First, Lockheed Martin failed to win a government guarantee of reserved space in the VentureStar cargo bay, discouraging banks from underwriting its investment. Next, the technology proved elusive. Engineers struggled to lower the weight of a test vehicle called the X-33. A first launch in 1999 was canceled because of cracks in the unmanned craft's giant fuel tanks.
Finally, and fatally, the telecommunications boom went bust. Plans for big constellations of data-relaying satellites -- owned by GlobalStar, Iridium and similar enterprises -- evaporated. Only six commercial rockets launched in 2001, and industry spending shrank to a pre-boom level of about $3.3 billion.
The Bush administration responded that year by canceling the program, leaving the manned space program with no alternative besides the costly shuttle for the foreseeable future. Its only near-term plan was to raise the possibility of "the full transfer of shuttle operations and possibly some portion of infrastructure ownership" to a private company, according to a White House statement last year.
Over a longer period, NASA promised, it would spend $4.85 billion on space station improvements, shuttle upgrades and new spaceplane technology. But this plan is now subject to presidential review in the wake of the Columbia disaster.
"People in NASA had actually convinced themselves that people on Wall Street would actually put up a lot of money in the thing, that it was a great investment," said industry consultant Loren Thompson. "It was emblematic of the total unreality that inhabited the [manned] space program. . . . There were so many excessively optimistic assumptions layered one on top of another."
NASA subsequently declared the four shuttles would be used until at least 2012, and likely past 2020, beyond their planned lifespan. At the same time, the agency did not -- according to its own safety advisory panel -- commit to spending enough to ensure shuttle operations would be safe through this period.
This discrepancy was the principal topic of discussion at a prescient congressional hearing last April 18. Rohrabacher, the House aeronautics and space subcommittee chairman, stated then that "I was in the White House when the Challenger blew up, and we never want anything like that to happen again . . . and I think the administration needs to pay attention to this."
Richard Blomberg, who had recently stepped down as the safety panel chairman, testified that "in all my years of my involvement . . . I have never been as worried for Space Shuttle safety as I am right now." Blomberg said his concerns were about the shuttle's long-term health, not its near-term flights. But he added, "one of the roots of my concern is that nobody will know for sure when the safety margin has been eroded too far."
Fred Gregory -- then NASA's associate administrator for space flight and head of the office that since 1995 has controlled all spending on the shuttle, space station, and shuttle successor programs -- responded by insisting that the agency indeed had allocated enough. Of the advisory panel's budget safety warning, he said simply: "I do not agree with it."
Ten months and five shuttle missions later, the Columbia broke apart somewhere over East Texas.
Researchers Margot Williams, Lucy Shackelford and Madonna Lebling contributed to this report.
Copyright © 2003, The Washington Post Company
