Senators warn Pentagon against flouting air tanker requirements

With Senate passage Wednesday of the fiscal 2004 defense authorization conference report, two years of debate over how the Air Force should begin to modernize its aging fleet of aerial refueling tankers seemed to be drawing to a close.

But on Wednesday, senators continued to wrangle with top Pentagon officials and House members over exactly what the new tanker legislation meant.

Under the authorizing language, the Air Force would lease no more than 20 Boeing 767 tankers and purchase as many as 80 aircraft through annual appropriations.

The language represents the culmination of weeks of negotiation between Senate Armed Services Chairman John Warner, R-Va., ranking member Carl Levin, D-Mich., and Commerce Chairman John McCain, R-Ariz., to reach a compromise on the Air Force's original-and more costly-proposal to lease all 100 tankers.

However, Warner, McCain and others worry that the Pentagon will disregard the authorizing language and continue to pursue the original plan, as indicated in a Nov. 5 letter to the House and Senate Armed Services committees from Deputy Defense Secretary Paul Wolfowitz.

In his letter, Wolfowitz suggests the compromise does not require the Air Force to seek funding each year to pay for the purchase of the 80 aircraft before placing orders for the planes.

Under this approach, anticipated savings from the compromise would be cut nearly in half, based on preliminary CBO estimates, McCain said in a colloquy submitted for the record when the Senate approved the authorization by a 95-3 vote.

"Unfortunately, I have every reason to believe that the Air Force will proceed in this manner, which fundamentally belies the compromise proposal," McCain said.

While the Wolfowitz letter on its own poses little threat to any authorizing statute, a handful of House members late last week submitted a colloquy of their own that referred to the Wolfowitz memo, potentially conveying a congressional intent not agreed to during the defense authorization conference, Senate aides told CongressDaily.

According to the text of the House colloquy, Armed Services Chairman Duncan Hunter, R-Calif., and Reps. Norman Dicks, D-Wash., and Todd Tiahrt, R-Kan., stated that the defense authorization conferees relied largely on the Wolfowitz letter in coming to an agreement.

They also asserted that the language authorized a multi-year procurement under a single contract that would not require the Air Force to have the full budget authority needed to purchase an aircraft before placing an order.

In response, McCain, Warner, Budget Chairman Don Nickles, R-Okla., and Governmental Affairs Financial Management Subcommittee Chairman Peter Fitzgerald, R-Ill, submitted three colloquies of their own Wednesday in an effort to set the legislative record straight.

Contrary to the House colloquy, the compromise detailed in the authorizing language "does not endorse or codify any such agreement" to allow the Air Force to pay for the aircraft on delivery, according to Warner.

McCain added it would be an approach that "could be very costly and could dramatically slash the savings that this compromise intends to provide-an outcome that is unacceptable."

What the conference report language does allow is acquisition of all 100 tankers under two separate contracts.

The report also calls on the Pentagon to obtain budget authority before it orders the construction of any aircraft it intends to buy and to make progress payments that will be credited toward the final purchase price of those tankers, a plan that Warner and McCain say they expect to save the government $5.3 billion when compared to the Air Force's original lease proposal.

This differs from Wolfowitz's suggestion that the Air Force intends to pay for the tankers upon delivery, presumably under the terms of the original lease authorization. Instead of obtaining funding in advance and making progress payments during construction, construction would be paid for with money borrowed in the private market at an additional cost of $7.4 million per aircraft.

Another concern is that the Air Force will proceed with the acquisition under the currently proposed lease but not bother to renegotiate the price of the aircraft to exclude lease-specific costs for the 80 planes purchased through more traditional acquisition methods, costs that McCain estimates to be as high as $5.5 million per plane.

In approving the bill, the Senate sent the $401.3 billion bill to President Bush. Other provisions in the measure give the Defense Department more flexibility in assigning its civilian workers.

The bill also orders enforcement of environmental laws relaxed for military operations.

The conference report is $1.5 billion higher than the spending sought by Bush. The house approved the conference report on Nov. 7.

One provision sought by veterans would address penalties disabled veterans believe they suffer under government policies that reduce their military pensions by the amount they receive in disability pay.