Senate panel backs plan for Air Force to lease Boeing planes

The Senate Defense Appropriations Subcommittee gave a big boost Tuesday to the ailing Boeing Co. by unanimously passing a $318 billion military spending bill that would allow the Air Force to enter long-term leasing deals worth as much as $20 billion for the Seattle company over a decade.

"This is critical for us," said Sen. Patty Murray, D-Wash., whose home state has been hit hard by Boeing's decision to lay off a third of its 90,000 workers. The layoffs will affect thousands in the Seattle area where the company builds commercial jets.

The Boeing lease provisions allows the Air Force to lease as many as 100 of Boeing's 767 airliners for 10 years for up to $20 million a plane. The deal is not included in the House-passed version of the defense appropriations bill (H.R. 3338). It is certain to be a central issue in the upcoming House-Senate conference on the rival spending measures, which both top out at $318 billion.

Jobs are not the only things at stake, said Murray of the leasing. She and other Senate backers of the deal said that existing Air Force tankers have become old and potentially dangerous. "I also have several Air Force bases in my state," Murray said, "and I've talked to the men and women headed to Afghanistan. We have an obligation to make sure they are safe and secure, and that is just as important as Boeing jobs."

Critics complain the deal would cost the taxpayers $6 billion to $9 billion more to lease rather than buy tanker versions of the 767. They note that the Air Force would have to return the tankers to Boeing after leasing them for 10 years unless they paid the company additional money to purchase them.

Leasing has the advantage of avoiding a sudden ballooning of the Pentagon budget, a feature that House opponents said made the Senate language appealing to the Bush administration.

In other sections of the money bill, which the subcommittee sent to its parent Appropriations Committee with little debate on Tuesday morning, President Bush receives the full $8.3 billion he requested for missile defense. The House measure contains $400 million less for that.

Although both House and Senate leaders had vowed to fight attempts by their colleagues to turn the appropriations bills into Christmas trees for holding pet projects, congressional analysts said both measures are now heavy with ornaments to benefit home areas of powerful lawmakers.