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CBO Slams Boeing Tanker Lease
Washington,
D.C. - The following is a written statement by Keith Ashdown,
Vice-President of Policy at Taxpayers for Common Sense on
the Congressional Budget Office Boeing Tanker report:
The Congressional
Budget Office (CBO) study further confirms that the Air Force
tanker lease with Boeing will cost taxpayers billions more
than an outright purchase. This lease leaves taxpayers with
a bad case of sticker shock.
According
to the report, the real cost to lease and purchase tankers
will be $5.7 billion more than the advertised price. Additional
training, maintenance and other associated program costs increase
the total price tag to $29.8 billion, an increase of nearly
$9 billion over the six years.
Additionally,
the report says that the Air Force has broken numerous federal
budgetary and leasing rules to make this lease a reality.
The CBO concluded that the tanker deal is really a purchase
masquerading in lease clothes. It violates 4 out of 6 principles
of federal leasing - one of which being that present value
of the lease should not exceed 90% of the fair market value
of the tankers.
The report
concluded that instead of offering a financial benefit to
the Air Force, leasing tankers would cost the government far
more and create a cash crunch at the end of the lease period.
For example, when the lease comes to term, the Air Force will
be in the heart of Joint Strike Fighter (JSF) Acquisition.
This current lease defies logic -- no fiscally responsible
person would enter a deal that would end up costing far more
to lease than to buy. It seems the Air Force is more concerned
with Boeing's profits than the taxpayers' pocket book.
The report
also concluded that if the federal government doesn’t
procure more than 100 tankers that Boeing would have to close
its 767 production line in 2011. This fiscally irresponsible
deal only delays the inevitable - a corporation that is failing
in the private market can’t be bailed out by the public
sector.
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