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WASHINGTON (Reuters) - A Senate Democratic budget proposal released on Friday would eliminate funding for an alternate engine for the F-35 Joint Strike Fighter in a blow to its manufacturers, General Electric Co and Rolls-Royce Plc.
Money for the project has already been stripped out of a budget proposal that passed the House of Representatives last month.
The Pentagon has tried to eliminate the program since 2007, but Republican and Democratic lawmakers, mindful of the jobs it provides, have repeatedly added it back into the defense budget.
Fiscal pressures appear to have given the Pentagon the upper hand as a record $1.65 trillion budget deficit is projected for the current fiscal year, equal to 10.9 percent of the economy.
Republicans have passed a $61 billion spending-cut package in the House, and Democrats are responding with a proposal that would trim $6 billion from current levels.
The Democratic bill could come up for a vote in the Senate early next week.
Lawmakers have given themselves two weeks to resolve their differences and sign off on a bill that would set funding levels through the remainder of the fiscal year that ends September 30.
United Technologies Corp's Pratt & Whitney unit builds the engine being used in early production of Lockheed Martin's F-35.
The alternate engine program carries a price tag of $450 million this year. Its elimination could end up saving the government about $3 billion over the next few years.
Reporting by Andy Sullivan; Editing by Gerald E. McCormick and Tim Dobbyn