Tanker deal done

WASHINGTON — Ending a two-year battle, the U.S. Senate gave final approval Wednesday to a controversial plan for the Air Force to acquire 100 Boeing 767s for use as midair refueling tankers.

The planes will be built in Everett and modified in Wichita, Kan.

The compromise, pushed as a way to satisfy Sen. John McCain, R-Ariz., and other critics, calls for the Air Force to lease 20 planes immediately and buy 80 more in a standard purchase.

The Air Force originally proposed leasing all 100 planes, but backed down in the face of criticism from McCain and others that the deal was too costly.

The revised plan is expected to reduce the cost of the $21 billion deal by at least $3 billion, and may save as much $5 billion over 15 years, depending on when the planes are purchased and other factors.

The Senate gave formal approval to the deal as part of a $401 billion measure it passed Wednesday and sent to the White House authorizing 2004 defense programs. The House passed the bill on Friday.

During debate on the bill Tuesday, supporters hailed the upcoming vote as the end of a long, hard fight.

"I don’t think this is the last we’ll hear about tankers, but this compromise strikes a balance," said Sen. Maria Cantwell, D-Wash. "The Air Force gets to start a needed tanker replacement program, taxpayers get a savings of $2.2 billion, and workers get to continue manufacturing a great product."

Lawmakers in Washington state and Kansas lobbied extensively on behalf of the tanker deal, as did House Speaker Dennis Hastert, R-Ill., whose district is close to Boeing’s Chicago headquarters. Lawmakers in Florida and North Dakota, where many of the planes will be housed, also worked on behalf of the deal.

"It’s great news for the 767 line and will sustain jobs and keep our people working," said Connie Kelliher, a spokeswoman for Machinists Union District 751, which represents workers on the 767 line in Everett. She said workers, who have seen production rates slow dramatically with few commercial airplane orders, are relieved. "They were all too aware of (the deal’s) importance."

As proposed by the Air Force, 32 refueling planes will be stationed at each of three Air Force bases: Fairchild near Spokane, MacDill in Florida and Grand Forks in North Dakota.

While the plan is limited to 100 planes, the Air Force eventually will need to replace more than 400 KC-135 refueling tankers, and supporters expect Boeing to have an edge in the competition for the remaining planes. Rep. Todd Tiahrt, R-Kan., said he thought the defense budget could make room for more tankers in upcoming years and said he hadn’t abandoned leasing as a way to defer costs.

"This wasn’t the deal I wanted, but we can move forward on this," Tiahrt said.

The leasing deal appeared imminent as recently as Labor Day, after three congressional committees approved the deal with little debate over the summer.

But the proposal ran into turbulence in the Senate Armed Services Committee, where McCain is a senior member. The panel’s chairman, Sen. John Warner, R-Va., and ranking Democrat, Sen. Carl Levin of Michigan, also expressed misgivings.

Their concerns were buttressed by separate reports from the Congressional Budget Office and the General Accounting Office indicating that the lease deal would cost at least $5.7 billion more than a straight purchase. A hybrid plan to lease some planes and buy others would save as much as $4.2 billion, the reports said.

Warner and Levin announced their 20-80 plan last month, calling it a more honest approach that would save taxpayers money while allowing the Air Force to get the refueling tankers as soon as possible.