GovernmentExecutive.com

House and Senate conferees remain at a stalemate in the fiscal 2004 defense authorization conference over several unresolved policy issues, including differences over House and Senate positions on so-called "Buy American" legislation recently proposed by the Office of Management and Budget.

House Armed Services Committee Chairman Duncan Hunter, R-Calif., told Senate conferees last week he was dissatisfied with OMB's proposal - the culmination of two months' negotiations among Hunter, Deputy Defense Secretary Paul Wolfowitz and a smattering of key Cabinet-level agencies that expressed strong opposition to early versions of the draft language.

The final version of the compromise, which OMB released to lawmakers last week, largely neutralizes tough protections included in the House version of the bill.

But in meetings with Hunter last week, senators proposed dropping all "Buy American" language from the conference in favor of revisiting the issue in next year's defense authorization.

Since then, Hunter reportedly has called on the Senate to omit a provision in its version of the bill allowing the Defense secretary to waive domestic source or content requirements on defense goods produced by countries engaged in certain bilateral agreements with the United States, according to Senate aides.

Hunter also reportedly asked that one section of OMB's proposal that could limit U.S. defense contactors' use of foreign sources of titanium in manufacturing be modified. However Hunter's committee could not confirm details of ongoing conference negotiations. A committee spokesman said Monday that negotiations continue.

It remains unclear whether Senate Armed Services Committee Chairman John Warner, R-Va., would agree to any proposed changes without administration backing, although congressional watchers predict his support will be linked to any official position expressed by the White House.

Arizona Sen. John McCain, the committee's ranking Republican and a vocal opponent of Hunter's industrial base protections, may be less inclined to take his cues from the White House, observers said.

"Warner may be trapped into buying off on whatever the administration wants," said Joel Johnson, vice president of international affairs at the Aerospace Industries Association here. "However, McCain may still say 'no.'"

Opposition of senior British and Dutch government officials to OMB's draft proposal probably will fuel McCain's continued opposition to the draft legislation - and any further tweaking of it.

Given the reaction of allies, additional House and Senate negotiations are likely to be in the offing, said one U.S. defense industry consultant familiar with the issue who asked to remain anonymous.

However, talks are not expected to continue today, as Hunter is not slated to return from his California district until late this afternoon, a House aide said Monday.