The Air Force’s Shameful Tanker Deal
There’s a great story in today’s Post that finally explores in detail an issue that’s been simmering on the Hill for many months now — a deal between the Air Force and Boeing for the procurement of new refueling tankers that seems fishy, to say the least. Some members of Congress (most notably Senator John McCain) have been trying to get this sweetheart deal torpedoed for a while now; it certainly deserves to be, if taken on the merits.
Read the story, it’s got all the details — but here’s the basic issue. The Air Force maintains a fleet of planes that are essentially airliners with the passenger seats ripped out and replaced with giant fuel tanks, for other planes to hook up to in mid-air and re-fill their tanks from. These are un-sexy but highly necessary aircraft, since they allow the Air Force to reach targets from bases thousands of miles farther away than they otherwise would be able to. (Consider that during the recent hostilities in Iraq, many of the bomber missions that hit targets there were actually launched from places like Colorado — there’s no way our bombers could make it from Colorado to Iraq and back without taking on fuel from tankers.)
The controversy comes in because of a deal that aircraft maker Boeing has cooked up to replace the Air Force’s existing tankers with new planes. Boeing, you see, has a bit of a problem. The mainstay of their product line for awhile now has been the 767, a workhorse commercial jet. However, orders for new 767s have tailed off of late, due to a fall in air travel after September 11, and due to tough competition from Airbus Industrie, which persists in building better airplanes for lower prices than Boeing does (damn Europeans!). This meant that Boeing had to find somebody who wanted to buy 767s, since that’s what they had to sell.
So, they approached the U.S. Air Force with a proposal: replace the Air Force’s existing fleet of tankers (KC-135s, which are converted Boeing 707s) with shiny new converted 767s. After all, those KC-135s were sure old, right? And wouldn’t it be nice to have some shiny new planes instead of those boring old ones?
Sure, said the Air Force brass. The only problem was, they couldn’t afford it — there wasn’t room in the budget to buy a whole new tanker fleet, since the existing tanker fleet was doing fine (even an audit from Boeing’s own consultants estimated that the KC-135s could serve until 2040). So Boeing got extra-creative and came back with a twist on their idea — don’t worry, they told the brass, we’ve figured out a way to fit it in your budget. You’re not going to buy the planes, you see — you’re going to lease them.
Yes! This was the big idea — that Boeing would sell the tankers to a shell company, who would them lease them to the Air Force, rather than the Air Force just buying them up front. Now, think of the times when leasing things makes sense in your own life. Generally, it’s when you’re acquiring something you’re pretty certain you’re going to give back in the near term — something like a car you want to trade back in three years later, or an apartment in a city you’re not sure if you’re going to live in long-term. But tankers? Does anybody think that the Air Force is not going to end up keeping these things? And since it’s a lease, it has all the drawbacks of a lease — including a much higher total cost than if you just bought the item outright. So, in other words, we taxpayers are going to be stuck with an enormous bill from Boeing somewhere down the line, so that the Air Force doesn’t have to go through the bother of reworking its budget to fit in its new toys.
I probably don’t have to tell you that the Air Force neglected to do any competitive bidding on this contract, either. Or even to test whether 767s would make particularly good tankers. They’re just gonna take Boeing’s word on the whole cost and suitability-to-task issues.
What a mess. Boeing claims now that they ginned up this whole deal to save jobs, so they wouldn’t have to close the 767 assembly line. (How noble!) But defense contracting isn’t the channel through which to be disbursing welfare payments. If we’re concerned about the assembly-line workers, let’s just pay them their salaries to stay home, like we do farmers. That way we can cut out the middlemen and save on all the executive salaries they’d be skimming. Makes sense to me.
This deal deserves to be taken down hard. Here’s hoping Senator McCain gets the support he needs to make that happen.