Budget for F-35 flies into trouble

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Budget for F-35 flies into trouble

STAR-TELEGRAM, BOB COX, 8 september 2006

Lockheed Martin's F-35 fighter program is flying into serious budget turbulence as the armed forces and Congress shape spending plans for 2007 and beyond. Both houses of Congress have passed 2007 defense budgets that would trim spending on the F-35 program below the amount the Pentagon requested. More ominously, all three of the armed services that plan to buy the F-35 have proposed major cuts in the number of planes they expect to buy between 2008 and 2013, which could dramatically drive up the cost of each aircraft.
The Air Force, in its first draft budget proposal for 2008, has suggested cutting 72 planes from its planned F-35 purchases between 2008 and 2013, the defense newsletter Inside the Air Force reported Friday.
Earlier, the Navy proposed buying 35 fewer planes for the Marines during that same time period.
The proposed spending cuts for 2007 and beyond threaten to undermine carefully laid plans for development and production of the F-35, plans meant to produce a new generation of highly capable combat aircraft at relatively affordable prices.
"If you look at the Air Force's budget plan for 2008 and beyond, you can feel the budgetary walls starting to close in on the F-35 program," said Loren Thompson, a Washington defense consultant with the Lexington Institute.
The Pentagon, the armed services and Congress are wrestling with how to pay for the ongoing military operations in Iraq and Afghanistan, replace equipment and supplies worn out or lost in those campaigns, and invest in new equipment, weapons and planes for the future.
Defense experts say Congress and the armed forces are being compelled to put a higher priority on buying bullets and bombs and paying troops than purchasing airplanes that aren't needed today and won't be available for several years.
"What happens when money gets tight is that it always hits [new] weapons systems," Thompson said.
Members of the Senate and House are expected to meet next week in conference to iron out differences between their 2007 budget bills. The Senate budget would cut $1.2 billion from the funds to produce five planes in 2007 and begin procuring parts for an additional 16 planes to be built in 2008-09.
The House budget bill has about $312 million less for production than the Pentagon requested.
It would cut one of the first five planes planned to be built in 2007 and would fund work on only eight of the next 16 planes.
Lockheed Martin officials have said repeatedly that they need to stick to the planned production schedule to maintain the production line in west Fort Worth and hold down the per-unit aircraft cost.
Cutting early production could drive up the price of each airplane by $12 million to $16 million, Air Force Gen. Charles Davis said in an interview Friday with the Reuters news service.
Rising prices, Davis said, could deter other nations such as Britain, Australia and the Netherlands from buying F-35s.
Based on 2002 projections, the conventional version of the F-35 is expected to cost $45 million to $50 million and the carrier-based and short-takeoff-and-landing variants about $60 million.
Even worse budget cuts could loom for 2008 and beyond. The proposed cuts in F-35 purchases by the Air Force and Marines amount to roughly one-third of the planned production during that time.
Senior Pentagon officials will have a say in determining the number of F-35s to be purchased before submitting a final 2008 defense budget proposal to the White House by year's end.
Lockheed and military officials overseeing the F-35 program have been trying to persuade Congress to maintain funding for the early batches of airplanes so that workers gain experience, efficiency improves and the per-unit cost drops.
"We are very well aware of the budget process that is currently ongoing," Lockheed Martin spokesman John Smith said. "The Defense Department and all the services face some very difficult challenges in preparing the fiscal year 2008 budget: seeking a balance between protecting near-term readiness and meeting long-term procurement needs."

Bob Cox, 817-390-7723, rcox@star-telegram.com

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