What will it take to cancel the Space Launch System?
It's a very persistent program
The Office of Management and Budget released the topline budget for its Fiscal Year (FY) 2026 in early May 2025.
Among other proposed changes at NASA, the draft indicates the latest attempt to wind down NASA’s Space Launch System, or SLS.
SLS is America’s largest super-heavy lift launch vehicle. Other examples include SpaceX’s Falcon Heavy and Starship.
Space Launch System: A Synopsis
SLS has been, in one form or another, critical to NASA’s plans to return people to the lunar surface since around 2004, when the predecessor Ares V was introduced as part of the Constellation Program.
SLS deserves acknowledgement as one of the most resilient government programs in the aerospace and defense sector. This might be because Boeing is the primary contractor on the rocket’s core stage, and also because there are more than 3,800 subcontractors located across all 50 states, as well as Puerto Rico.
SLS has also developed international political significance as a key part of the Artemis Program. In exchange for foreign contributions to this program’s mission architecture, there are now plans to send the first Japanese, European, and Canadian astronauts to the Moon.
Looking farther afield, the Artemis Program led to the development of the Artemis Accords, a multilateral agreement laying out norms for operations in cislunar space.
SLS has unequivocally been a diplomatic success.
Having said that, the program has not had a particularly easy history. Here’s a non-exhaustive list of the attempts to kill what we now know today as SLS:
The report of the Augustine Committee, released in October 2009, said the Constellation Program wouldn’t achieve any of its objectives. President Obama took it out of the FY 2010 federal budget proposal.
The Ares V from the Constellation Program was essentially reauthorized as SLS the following FY.
The authorizing legislation directed NASA to use the industrial base and personnel from the Shuttle and Constellation programs.
In 2011, Lori Garver seems to have attempted to de-prioritize what became the Artemis Program. This ultimately didn’t work; President Obama gave a speech endorsing it after what sounds like fairly intense intra-party legislative pressure.
In March 2019, the FY 2020 budget proposal eliminated funding for more advanced versions of the rocket; Congress restored the funding in the passed budget.
On May 2 2025, the FY 2026 budget proposal called to terminate the SLS program after Artemis III.
Stopping SLS, sometimes derisively referred to as the “Senate Launch System”, happens to be something that both Democrats and Republicans have attempted to accomplish over the program’s long lifetime.
Despite all this, SLS flew for the first time on November 16, 2022. The launch vehicle’s part of the mission was a complete success.
Issues with SLS
I don’t like SLS.
It’s too expensive. The first flight cost $5.7 billion dollars. We’re watching three companies (SpaceX, Stoke Space, Blue Origin) conduct R&D for and build comparably sized rockets much more cheaply. As a taxpayer and citizen, I feel entitled to ask that my government pursue exquisite capabilities that are still a good value.
It’s too far behind schedule. The first flight was 6 years late. The second flight will be about 3.5 years late.
The flight cadence isn’t just too slow today to matter — it can’t be made fast enough to matter.
The RS-25 engines that power the first stage are from the Space Shuttle program, and belong in museums.
Perhaps most critically, launching everything on one rocket keeps us from building the in-space assembly skills we’re going to need to send humans to explore Mars — even if we use Starship.
But don’t take my word for it. Casey Handmer, the CEO and founder of Terraform Industries, wrote a much more substantial critique of the program in 2020. Then he wrote an update in 2023, and another update in 2024.
SLS has staying power
It should be clear to everybody at this point that from the perspective of Congress, “Starship went to space this week” is a bad reason to kill SLS.
Historically, SLS has been unkillable because senior legislators who appropriate funds want money to go to firms that employ their constituents to build the hardware. Two former Senators known for this are former astronaut and NASA Administrator Bill Nelson (D-FL) and Richard Shelby (R-AL).
In short, SLS has been a jobs program for key legislative constituencies.
In all fairness, that’s how NASA’s operated basically since the 1950s — and explains why several of the centers are where they are. It’s certainly not unique among government programs in that respect.
Whenever SLS goes out of production (even if the program goes on to beat everybody’s expectations for the next 20 years) legislators will be concerned with the workforce consequences of SLS ending.
This is apparent in the response to Boeing filing a WARN Act notice in February that covered SLS employees. NASA promptly disputed the claim that the program was at risk. A number of media outlets pointed out that Congress will have to agree to any cuts to the program.
Beyond the political implications, this event provides insight as to what it’ll take to finally get rid of the program.
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Legislators, especially from places like Florida, Texas, Alabama, and Mississippi, probably do not care in an immediate sense about returning to the Moon or going to Mars. I believe they’re all patriots and all want the best for the country, but those events will happen on a very far out time horizon. They may not happen in the legislators’ lifetime, and they certainly will not happen before the next election the legislators will be competing in.
This, however, is not the case if a program ends and contractors who are also constituents lose their jobs.
A modest proposal
Legislators view space exploration as a strategic, societal opportunity. Legislators view government contracting job losses in their district as tactical, immediate, personal problems to be avoided at all costs.
That should characterize the proposal they’re presented with.
In order to kill SLS, we don’t need to sell Congress a new super-heavy lift launch vehicle or lunar exploration architecture. Rather, we need to pitch a plan to productively employ the personnel who currently staff the program.
This isn’t just a problem for NASA. Heck, it might not even be a problem for NASA at all. Private industry could be better suited to employing this skilled labor force.
People and institutions that would rather see SLS cancelled should come together with a series of programs that would employ the contractors elsewhere in the affected legislative districts.
My view is that this would represent a compelling opportunity for growth-stage companies to invest in districts with lots of SLS jobs. I think the opportunity here is particularly attractive in the aerospace sector, and in the South.
This doesn’t necessarily have to be the outcome, but I think it’d be an attractive one for a couple reasons:
Specialized talent is already there.
Some of the people who work on this rocket are the best at what they do in the world.
We should attempt to maintain the concentration of talent, even as we critique the project they are working on.
The cost of business in the South tends to be cheaper than the next-best alternative.
The current center of the aerospace sector, and therefore the probable next-best alternative, is Southern California, which has a notoriously high cost of doing business.
There also is renewed investor interest in growth-stage space companies. The same week the budget proposal came out, Filip Kocian posted on X:
The most important takeaway from this week is that growth rounds in space are back. In 2023 iirc the only rounds last 100M were Axiom and Sierra, founded in Saudi and South Korea, not exactly representative of the broader equity markets. We are back to "normal" VC.
This seems to have been in reference to the monster Series C rounds of $260 million raised by True Anomaly, Apex Space, and Stoke Space. Since then, Firefly Aerospace has also secured a significant investment.
Growth equity seems particularly well-suited to building additional production facilities, since firms raising this much capital are presumably default alive. Financials of private firms are closely held, but I suspect that from the list above, at least Apex and Firefly are default alive.
Default alive companies scaling up manufacturing or R&D efforts in new, less expensive locations is precisely the sort of thing I imagine growth equity funds should want to look at in the aerospace sector. Specifically now that access to space is becoming commoditized, there’s probably investment opportunities for growth equity to hit industry standard MOIC targets (3x-5x) by investing in the top bus and launch services providers.
Having worked on the Artemis Program as an engineer, I believe quite strongly that the sector alignment with SLS would make these sorts of roles more compelling to the SLS workforce than other highly skilled jobs in the region.
I expect any plan to end SLS will be more compelling to the legislature than recent proposals if it is focused more on handling the labor market disruption than reconfiguring the mission architecture. It doesn’t necessarily need to be this aerospace focused. That just seems to me like it’d be the simplest move because it would minimize the need for retraining, and the workforce concerned is already active in the space.
That raises an important question: What happens to the moon exploration plans if SLS actually gets cancelled this time? Nobody knows for sure, but Eric Berger, a leading space journalist, wrote an article in early May that has some interesting ideas.