This article from NYTimes.com has been sent to you by psa188@xxxxxxxxx /-------------------- advertisement -----------------------\ Explore more of Starbucks at Starbucks.com. http://www.starbucks.com/default.asp?ci=1015 \----------------------------------------------------------/ Senators Voice Doubts on Plan to Lease Boeing Planes September 5, 2003 By LESLIE WAYNE WASHINGTON, Sept. 4 - Senator John W. Warner, chairman of the Senate Armed Services Committee, called on the Pentagon today to scale back drastically a $21 billion Air Force plan to lease 100 Boeing 767 aerial tankers, dealing a setback to a plan that had once been gliding through Congress. After a committee hearing that included bipartisan expressions of skepticism about the leasing plan, Mr. Warner issued a letter asking that the lease be cut back to only 25 tankers and that additional studies be done on the need for more tankers as well as possible alternatives to modernizing an aerial refueling tanker fleet that is now more than 40 years old. Mr. Warner's letter left open the possibility that the Air Force might get the 100 tankers that it wants, but not immediately and only by going through normal procurement channels. That course would require the Air Force to make hard decisions on whether to spend limited budget dollars on the tankers or other aircraft and military hardware. The Air Force had proposed a leasing arrangement to obtain tankers that it said it needed but could not afford now - an arrangement that nonpartisan government studies show could save money in the short run but would cost the government $5.7 billion more over time than if the Air Force bought the 767's outright. In testimony today, Mr. Warner criticized the Air Force for pushing the tanker's costs into the future saying: "This thing will suck the life's blood right out of the Department of the Air Force. The magnitude of it." In a three-paragraph letter to Defense Secretary Donald H. Rumsfeld, Mr. Warner said his committee would not act on any tanker proposal until it received and reviewed the additional studies it had requested from the Pentagon. No timetable was set for the review. The letter also said that it reflected "the thinking of the Senate" in stating that studies of alternatives to the leasing proposal should have been done before the Air Force submitted the leasing deal to Congress. Today's action casts doubt on a program that, according to Wall Street analysts, could have brought up to $2 billion in operating profits to Boeing initially and two to three times that amount if the 767 tanker program - involving reconfiguring passenger jets to carry fuel - were expanded to replace the entire Air Force fleet of 500 tankers, not just the 100 oldest. In addition, the tanker program would have kept open Boeing's 767 production line, now struggling with reduced commercial demand from airlines . "We are committed to continue to work with the Air Force, the administration and the Congress to find the best solution to fulfill this crucial requirement," Boeing said in a statement. But as much as the Air Force and Boeing pushed for the program, it was criticized as a Boeing bailout by many in Washington, primarily Senator John McCain, a Republican of Arizona and a member of the Senate Armed Services Committee. In addition, the leasing arrangement was seen by many in Congress as a way to bypass the normal Congressional budgeting and oversight processes and raised the prospect that the Air Force would be financing critical military equipment through a complicated special-purpose entity, similar to the off-the-books financing used by Enron and others. After sailing through three of the four Congressional committees needed to approve the project, the proposed deal stalled before the Senate Armed Services Committee, perhaps the most powerful. "This thing is a Hail Mary pass," Mr. Warner, a Republican of Virginia, said at the committee hearing. "It's a long run around the process, and the Senate cannot ignore it. It would lead to serious perturbations in other programs." Under a series of harsh questions from Senator Carl Levin of Michigan, the ranking Democrat on the committee, Air Force Secretary James G. Roche acknowledged that the data given by the Air Force to the committee on the number of days the current fleet was unable to fly was out of date and that current performance data showed that the existing tanker fleet was flying more missions and more hours than in previous years because of improved maintenance. http://www.nytimes.com/2003/09/05/business/05BOEI.html?ex=1063766451&ei=1&en=7e1888737257b19f --------------------------------- Get Home Delivery of The New York Times Newspaper. Imagine reading The New York Times any time & anywhere you like! Leisurely catch up on events & expand your horizons. Enjoy now for 50% off Home Delivery! 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