A key element of the White House’s revised direction for NASA is turning over the transportation of astronauts to and from low-Earth orbit to the private sector.

Recent funding moves by Congress could sharply restrict the ability of companies to provide those services.

The Obama administration’s original budget proposal for NASA, released almost six months ago, included $6 billion over the next five years to help fund the development of such systems. Proposed revisions to the proposal could cut this figure dramatically, to as little as $150 million over three years.

NASA would use the vehicles developed by private companies to get crews to and from the International Space Station. The companies operating such spacecraft could also use them to serve other customers as well. But the high cost of developing such systems–in the hundreds of millions to billions of dollars–means that NASA would have to help fund their development.

When an independent panel, the Augustine Committee, reviewed NASA’s human spaceflight plans last year, several companies pitched commercial solutions for transporting astronauts. “Consistently, everyone said that without any government support, there was really no viable way for them to get a return on their investment,” said Phil McAlister last week at NewSpace 2010, a conference for space entrepreneurs held in Sunnyvale, CA. McAlister was executive director of the Augustine Committee and now works on commercial crew issues at NASA.

Mark Sirangelo, chairman of the Commercial Spaceflight Federation, an industry group that supports the development of commercial space vehicles, noted during a panel at NewSpace 2010 that NASA is already buying such services from the Russians–purchasing seats on Soyuz spacecraft bound for the space station. “What we’re simply saying is: cannot U.S. industry do the same thing we’re contracting out to the Russians?”

Entrepreneurial companies such as SpaceX and Sirangelo’s own Sierra Nevada Corporation could be forced to cancel the development of crew transportation vehicles if government funding is reduced further. Even larger companies could struggle with development if funding is cut significantly.

Last week, at the Farnborough International Airshow in England, Boeing discussed its plans for a capsule called the CST-100. Boeing already has a potential non-NASA customer as well: Bigelow Aerospace, a Las Vegas-based company that is developing commercial space stations and has already launched two small prototypes. “The money that NASA has proposed investing in commercial crew allows us to close the business case,” John Elbon, manager of Boeing’s commercial crew program, said at Farnborough. Without that funding “it would be a difficult decision for us to proceed.”

The problem is, that money may not be coming, at least not at the level requested by the White House. On July 15, the Senate Commerce Committee approved a NASA authorization bill that would provide $1.3 billion for commercial crew development in fiscal years 2011 through 2013. The Obama administration had requested $3.3 billion for commercial crew during that time.

The House version of the legislation, approved a week later by the House Science and Technology Committee, proposed even deeper cuts. The House bill provides only $150 million over three years for the development of crew transport vehicles, as well as $300 million for a new loan-guarantee program to help companies secure funding for developing those vehicles.

Both the House and Senate propose the cuts to help pay for the development of government-operated launch vehicles and spacecraft not in the White House’s original proposal. The Senate version includes $6.9 billion over three years for a “Space Launch System,” a heavy-lift rocket capable of placing at least 70 tons into low-Earth orbit, and $3.9 billion for a crew capsule similar to the Orion spacecraft NASA had been developing. The House version includes $13.2 billion for the combined development of the spacecraft as well as a launch vehicle closely derived from the Ares I, which the administration sought to cancel.

Members sought to portray these bills as compromises between NASA’s previous Constellation program and administration proposals to put more emphasis on technology development and commercial capabilities. “The goal was to preserve U.S. leadership in space exploration and keep as much of the rocket-industry talent as possible employed,” said Sen. Bill Nelson (D-FL), the chairman of the Senate Commerce Committee’s space subcommittee.

Commercial crew advocates are now gearing up for a long battle in the months to come as the full House and Senate take up their respective bills, as well as separate appropriation bills that would actually provide the funding.

Jim Muncy, president of PoliSpace, a space industry lobbying firm, predicted at NewSpace 2010 that a final bill that works out differences between the House and Senate versions would not be completed until after November’s congressional elections, giving supporters time to win support for a more palatable compromise. “The good part is that the fight isn’t over,” he said. “And, arguably, the real fight hasn’t even begun.”