True, there have been space companies before, but the sheer number of them in the last decade is staggering. Not only are companies being founded, but they're building and launching hardware. This
suggests that the economics of space travel has finally reached a tipping point. Hopefully, the industry is self sustaining, but the government could help it substantially by providing demand for its services. Instead of buying launch vehicles, NASA could be buying services. By contracting services, NASA increases competition within the industry and helps drive innovation and lower costs. Not only does this lower costs, but it provides flexibility in the event a rocket is grounded. As costs come down, it becomes more attractive for others to enter the market.
Now, a self-sustaining industry can occur on its own, but could be significantly accelerated by government demand. If it brings down costs, that means NASA can potentially more and bigger missions. The case for ambitious missions becomes far more compelling as well, since it could be justified as pushing the frontiers of a major industry. Such missions would also be harder to terminate once started.
Its a difficult, profoundly expensive and deadly business. That's why only a very few superpowers have succeeded in actually putting a man in space. To think that commercializing something is going to somehow change the physics of deed, well, this ain't Star Trek.
There are actually two ways to make something economically feasible:
A): Advance technology to bring costs down - what space supporters tend to focus on
-or-
B): Grow you economic base to the point that the costs become insignificant compared to the wider economy
Judging by the number of new start ups, A and B look like they've reached an adequate level.
If the solutions are so straightforward. If the profits are so solid, why do they need public money? Where's the investment capital from the private sector to make this go? Such a sure thing should have investors lined up to receive their share of the pie. That private money would be flowing if a solid business model were in the wings. I'm a die hard capitalist by nature. If the government has to bail you out or pay your way to get started, you don't have a business, you have a charity. I think both houses of congress are simply saying, let us see you succeed before we bet the future of such an important capability on something with no history of success. Congress, for once, is just being smart.
Government is good at two things:
A): Creating an initial capability
B): Providing initial demand for an industry, especially when there is a chicken/egg problem.
Government absolutely sucks at making something economic or finding the best uses for it after it's been created. We're not talking about paper rockets here; we're talking about rockets that are operational and companies that are more than willing to sell their services to the government. Building NASA's own rockets when there are private companies willing and able to do the same thing much sooner and cheaper is sheer stupidity.
Quite a few industries and ventures owe their start to government patronage. Settlement of the west was basically a giant government program. Frodo, in another thread, has pointed out that government provided the initial demand for both the continental railroad and interstate highway system. Many, many technologies were provided to government by companies before they found private uses (computers). A number of technologies that we use every day were invented privately, but used public money (the laser and transistor).
I do not understand this hostility to private spaceflight providing their services to government when so many other sectors of the economy owe their initial existence to government demand.
Companies are willing to provide their hardware to get people to the space station,
use them!