* Air Force may have to renegotiate $52 bln Boeing tanker
* Orders for some Lockheed weapons already delayed
* Some military exercises may be scrapped
By Andrea Shalal-Esa
WASHINGTON, Feb 6 The U.S. Air Force will have
to curtail its orders for Lockheed Martin Corp's F-35
fighter jet, restructure a $52 billion tanker deal with Boeing
Co and reduce its flying hours by 18 percent if lawmakers
do not avert impending across-the-board spending cuts, the
service told Congress on Wednesday.
The Air Force, in a draft presentation to Congress, said it
faced shortfalls of $1.8 billion in war funding and $12.4
billion overall if Congress does not forestall the cuts, known
as sequestration, which are due to take effect on March 1.
The impact of sequestration would be exacerbated, the Air
Force said, if Congress did not pass a budget for the current
fiscal year and stuck with the stop-gap spending measure
currently in place, known as a "continuing resolution," or CR.
"Without substantial reprogramming flexibility, a year-long
CR and sequestration disrupts modernization programs" and means
a delay in getting weapons into the hands of troops, according
to the presentation, a copy of which was obtained by Reuters.
All the military services must tell Congress by Friday how
they plan to deal with the automatic budget cuts, which appear
increasingly likely to take effect given a continuing impasse
between the White House and the Republican-controlled House of
It cited several examples, including expected reductions in
the number of F-35 purchases, the need to renegotiate a big
contract with Boeing for new refueling planes, and a delay in a
new version of the MQ-9 Reaper drone built by privately held
Defense Secretary Leon Panetta is seeking authority from
Congress to submit reprogramming requests that would allow the
Air Force and other military services to shift funds between
programs, which could help them avoid breaking the terms of
specific contracts like the one with Boeing for tankers.
Panetta warned on Wednesday that congressional inaction on
financial matters threatened U.S. security, and later announced
delayed deployment of an aircraft carrier strike group to the
Middle East because of budget uncertainty.
The Air Force says it got a great deal on the initial
fixed-price contract with Boeing, but could see costs climb if
it has to reopen the contract.
"We're going to be paying more for less, and that just
doesn't make sense," said one defense official, who was not
authorized to speak on the record.
Boeing has not offered, nor does the department expect, any
assurances about maintaining the current pricing, Air Force
spokesman Ed Gulick said.
ORDERS ALREADY DELAYED
The stop-gap spending measure prohibits any new programs
from starting, and limits spending to what it was in the
previous fiscal year's budget, hindering the ramping up of
planned spending for new programs.
The Air Force said orders for several Lockheed weapons - new
missile warning satellites, C-130J transport planes and the F-35
Joint Strike Fighter - were already being delayed.
In addition to the impact on procurement programs, Air Force
officials say the cuts would cut into important work aimed at
keeping troops ready to fight, and could jeopardize commitments
to allies around the world.
For instance, the Air Force may have to cancel several major
military exercises, including Bright Star, a regular exercise
conducted with allies in the Middle East.
It said it also faced the possibility of a short-term
furlough of 180,000 civilian contractors, an unprecedented
action that would delay testing of new weapons systems, which in
turn would raise program costs and delay programs.
The service said more than 30 weapons systems would face
reduced maintenance, affecting nearly all fighter jets,
transport planes and bombers in the Air Force fleet.
In addition, it said military communications worldwide
could be affected because of a 75 percent cut in sustainment of
the Defense Satellite Communications System.
Work at a number of ground radar sites would also be reduced
to eight hours a day from 24, cutting the military's ability to
monitor enemy missile launches and maintain surveillance of
satellite and other objects in space.
Representative Mike Turner, chairman of the House Armed
Services subcommittee on tactical air and land forces, said the
Air Force's draft presentation was "highly troubling."
"Sequestration will affect mission readiness and our
deployed personnel around the globe. Civilian furloughs will
delay systems testing - ultimately increasing end costs to the
taxpayer and the amount of time it takes to deliver equipment to
our warfighters," Turner said in a statement.
The service said it had already implemented a hiring freeze
for all permanent and temporary employees, which would cut its
ability to provide trained workers for intelligence analysis,
management of nuclear weapons and completion of more audits.
It said it was also laying off 3,200 employees who worked in
non-mission critical areas such as inspections, conferences and
training, and was reviewing plans for demonstration flights at
the Paris Air Show and other international events.