What a great idea. What could possibly go wrong? Because the private sector never, ever cuts corners to save a buck!

Okay, even assuming nothing goes wrong, where is the upside for the United States? That we get to applaud a space shuttle with the PayPal logo painted on the side? Gives me that fuzzy, warm feeling just thinking about it:

The White House has decided to begin funding private companies to carry NASA astronauts into space, but the proposal faces major political and budget hurdles, according to people familiar with the matter.

The controversial proposal, expected to be included in the Obama administration's next budget, would open a new chapter in the U.S. space program. The goal is to set up a multiyear, multi-billion-dollar initiative allowing private firms, including some start-ups, to compete to build and operate spacecraft capable of ferrying U.S. astronauts into orbit—and eventually deeper into the solar system.

Congress is likely to challenge the concept's safety and may balk at shifting dollars from existing National Aeronautics and Space Administration programs already hurting for funding to the new initiative. The White House's ultimate commitment to the initiative is murky, according to these people, because the budget isn't expected to outline a clear, long-term funding plan.

[...] The idea of outsourcing a portion of NASA's manned space program to the private sector gained momentum after recommendations from a presidential panel appointed last year. The panel, chaired by former Lockheed Martin Corp. Chairman Norman Augustine, argued that allowing companies to build and launch their own rockets and spacecraft to carry American astronauts into orbit would save money and also free up NASA to focus on more ambitious, longer-term goals.

What a coincidence, that the former Lockheed Martin chair would think this was a good idea!

However, many in NASA's old guard oppose the plan. Charles Precourt, a former chief of NASA's astronaut corps who is now a senior executive at aerospace and defense firm Alliant Techsystems Inc., said that farming out large portions of the manned space program to private firms would be a "really radical" and an "extremely high risk" path. Unless the overall budget goes up, he said, whatever new direction NASA pursues "isn't going to be viable."