Pentagon defends tankers

WASHINGTON — A widely criticized plan to lease 100 aerial refueling tankers from the Boeing Co. should go forward even though it may end up costing billions of dollars more over the lifetime of the planes than an outright purchase, the Pentagon said in a letter released Tuesday.

Deputy Defense Secretary Paul Wolfowitz said the leasing plan would allow the Air Force to modernize its tanker fleet immediately and save money in the short term.

The Pentagon is committed to buying at least 26 planes within the current lease terms, which would save about $1.2 billion from the $21.2 billion plan, Wolfowitz said.

More savings are available if the Air Force buys more planes through conventional purchases, Wolfowitz said, but that would require Congress to authorize billions more in short-term spending.

The total price for the deal could reach as high as $29.8 billion if training, maintenance and military construction costs are included, the Air Force has said.

Wolfowitz’s letter came in response to a request from Senate Armed Services Committee Chairman John Warner, R-Va., who asked the Pentagon to explore whether it would be better to lease 25 planes — instead of 100 as planned — and buy the rest.

In his response, received Tuesday, Wolfowitz laid out several scenarios, ranging from straight purchase to hybrid proposals that would involve leasing some planes and buying the rest.

Ultimately, Wolfowitz said, the Pentagon believes leasing 100 planes — with an option to buy spelled out from the beginning — is the best alternative.

Such a plan "would permit the Air Force to initiate tanker modernization immediately. It also would balance cost savings with the realities of funding availability," he wrote.

Warner was reviewing the letter Tuesday and had no comment, said his spokesman, John Ullyot.

Sen. Maria Cantwell, D-Wash., a leading supporter of the deal, said she was pleased the Pentagon provided additional justification for the unusual lease arrangement. The planes would be built at Boeing’s Everett plant and modified for military use in Kansas.

"The U.S. Air Force has critical needs we cannot afford to ignore," Cantwell said.

A spokesman for a watchdog group that has criticized the deal called Wolfowitz’s letter woefully inadequate.

"Instead of working to protect the interests of American taxpayers, the Pentagon is acting as a bagman for Boeing," said Keith Ashdown, vice president of Taxpayers for Common Sense. "The Pentagon’s response flies in the face of common sense and breaks all principles of fiscal responsibility."

The Congressional Budget Office has said taxpayers would end up spending at least $5.7 billion more to lease the planes than they would through a straight purchase.

In trading on the New York Stock Exchange, Boeing shares rose 26 cents to $35.15.