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Air Force estimates $79 billion budget deficit.

THE AIR FORCE ANTICIPATES its 2008 budget will be $9 billion short of what it needs to support its current assets. By 2013, the shortfall is expected to reach $28 billion.

A confluence of higher-than-forecast fuel costs, health care and aircraft maintenance is eroding the Air Force' buying power to the tune of $79 billion during the next five years, said Lt. Gen. Raymond Johns, deputy chief of staff for requirements and strategy.

This year, the Air Force received nearly $120 billion. Air Force officials have spent the past several months making their case on Capitol Hill that they need a substantial infusion of cash between now and 2013.

But their pleas have been met with skepticism from lawmakers who contend that the Air Force has yet to make much-needed fixes to its acquisition programs, many of which have seen steep cost overruns.

"The Air Force faces a difficult challenge in balancing its modernization needs," said Sen. Carl Levin, D-Mich., chairman of the Armed Services Committee. At a recent hearing, Levin chided Air Force Secretary Michael Wynne for the escalating costs of space systems and the management blunders in the Air Force's $20 billion aerial refueling tanker program.

"Secretary Wynne, when you came into the job you recognized that you would have to take significant steps to build up the acquisition workforce and restore confidence in the Air Force acquisition system," Levin said.

Sen. Claire McCaskill, D-Mo., scolded Wynne for the overruns and delays in airlift programs. "If you look at the four major airlift programs none of them are on time. None of them are on budget," McCaskill said. She complained about a "continuation of acquisition mistakes that don't appear to be taken seriously."

As it works to straighten out its acquisition programs, the Air Force is trying to dig itself out of a financial hole.

The estimated $79 billion deficit, officials stressed, is not the result of acquisition gaffes.

Elevated fuel prices account for $12 billion of unexpected costs. Health care inflation adds another $30 billion, and the upkeep of aging aircraft increases it another $35 billion. The final $2 billion comes from unbudgeted price increases for utilities at Air Force installations, Johns said in an interview

The latest round of base closures saddled the Air Force with a $4 billion bill, Johns said. The base realignments mandated in 2005 were supposed to save the Air Force $2.6 billion but ended up costing $1.8 billion. "We lost $4 billion from BRAC," he said.

The readiness rates of Air Force units--including personnel, equipment and training--have never been this low, said Johns. "The average age of the fleet is 24 years old. We'll be at 26 by 2013."

The long-term military strategy that the Pentagon put forth in the 2006 quadrennial defense review would require the Air Force to equip and staff 86 combat wings, Johns explained. The current force has the equivalent of 81 wings, and that number is headed to 78 during the next three years. The service has a large inventory of 5,984 aircraft, but at least 1,000 of those are in decrepit condition and too costly to repair.

"We are not in crisis today," Johns said. "But we need to have a national conversation about the future."
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Title Annotation:ANALYSIS
Comment:Air Force estimates $79 billion budget deficit.(ANALYSIS)
Author:Erwin, Sandra I.
Publication:National Defense
Date:Jun 1, 2007
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