Senate appropriators throw a bone to Boeing

In a desperately needed victory for Boeing Co., Senate appropriators have agreed to a proposal to allow the Pentagon to lease up to 100 wide-body 767 Boeing planes to replace the Air Force's aging fleet of refueling tankers, Senate sources said.

Appropriations ranking member Ted Stevens, R-Alaska, and Defense Appropriations Subcommittee Chairman Daniel Inouye, D- Hawaii, plan to add the provision to the fiscal 2002 Defense appropriations bill at the behest of Washington state's congressional delegation.

The provision could provide the embattled jet maker with $20 billion over the next decade, while upgrading the existing fleet of airborne refuelers--some of which rolled off the production lines more than four decades ago.

By leasing the planes, appropriators could acquire the airliners without busting the Defense budget.

A Boeing spokesman said the Pentagon could lease a 767 plane for about $20 million a year. The commercial version of the airliner costs as much as $120 million per plane.

Still, the plan will face turbulence in the House, where appropriators are skeptical of leasing plans.

Last week, the House Appropriations Committee approved a slimmer proposal that allocates $374 million to buy a pair of 767s and $85 million for a Boeing 737, to launch an upgrade of medical evacuation planes.

A final deal will be worked out in the House-Senate conference, which could begin in a few weeks.

The House plans to approve its version of the Defense appropriations bill next week. The Senate's Defense Appropriations Subcommittee will mark up its version of the legislation after the House wraps up work on the bill.