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As currently envisioned, Space Launch System resembles the original Ares V design from the ESAS report in summer and fall of 2005. The core rocket is the same diameter as the shuttle's external tank, and the core engines are based on the Space Shuttle Main Engines. Obviously, NASA's design engineers must have revisited the assumptions that were made when they switched Ares V to a new, wider-diameter core and less-efficient (but cheaper) RS-68 engines.
The advantages of reusing shuttle-heritage boosters, core engines and propellant tanks aren't as obvious as one might expect. Most of the components are being placed under very different aerodynamic and mechanical loads compared to what they saw under the shuttle program, so the testing will need to be repeated. Reusing shuttle manufacturing tools and launch facilities will result in some cost savings, but the development costs will be similar to what should be expected for an all-new heavy-lift rocket.
In fact, a recent report by Booz Allen Hamilton (hat tip: Hobbyspace) questions NASA's accounting for what SLS is really going to cost. It cites NASA's optimistic estimates for future cost savings. Without seeing this report, I can speculate that it's referring to the costs associated with using expendable versions of the shuttle main engine on every flight.
Besides the costs, it's foolishly optimistic to beleive NASA's estimate of an SLS test launch by 2016. Consider that the Saturn V was approved in January 1962, but didn't make a test flight until November 1967. So a well-funded heavy-lift program should expect to take at least 5 1/2 years from the moment it receives authority to proceed. But we shouldn't expect development to proceed at such a breakneck pace as Project Apollo (during an era when NASA registered at over 1% of the federal budget.) Unless Congress shovels large sums of development & test money at SLS, the schedule will likely slip by several years.
Complicating the situation is the wrangling over side-mount boosters for SLS. The baseline calls for the five-segment SRB's that have been largely developed by ATK. NASA administrator Charlie Bolden wants to open up a competition to build new boosters for SLS. Such a competition would likely produce a better-performing, better-value booster for the taxpayers--or at least serve as a check against cost growth on the ATK boosters. But opening up the booster trade-space adds to the SLS schedule.
The SLS budget and schedule will be an important issue for NASA over the next few years, but it will likely be overcome by events. SpaceX will fly its Falcon Heavy by 2014, perhaps 2015 given the inevitable schedule slips in complex development programs. While Falcon Heavy does not have the heavy-lift capabilities of SLS (50 metric tonnes versus 130 mT,) it doesn't need them if on-orbit assembly and propellant transfer become accepted means of sending humans on deep-space missions. In 2015 or 2016, Falcon heavy will be flying while SLS will still be a year or more from its first test. For a budget-conscious Congress, SLS will make a ripe target for cancellation and cost savings.