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Letter from Douglas Holtz-Eakin, Director to John McCain regarding Air Force's proposal to lease 100 Boeing 767 aircraft for use as aerial refueling tankers 1 (November 2003)

handle is hein.congrec/cbo9721 and id is 1 raw text is: November 13, 2003 Honorable John McCain Chairman Committee on Commerce, Science, and Transportation United States Senate Washington, DC 20510 Dear Mr. Chairman: As you requested in your letter of November 6, 2003, the Congressional Budget Office has estimated the cost of the following two alternatives to the Air Force's proposal to lease 100 Boeing 767 aircraft for use as aerial refueling tankers: * Lease 20 tanker aircraft and buy another 80 under the negotiated financing arrangement, and * Lease 20 tanker aircraft and buy another 80 using separate new contracts. As presented in our testimony on September 4, 2003, and our letter to Senator Warner dated October 16, 2003, CBO estimates it would cost $21.5 billion to lease 100 tankers and then purchase them at the end of each lease period. Either of the two alternatives described above would cost less than the Air Force's original plan. CBO estimates that if the Air Force leased 20 tankers and purchased another 80 upon delivery, using the financing arrangement in its original proposal, acquisition costs would total $18.3 billion, saving $3.2 billion when compared to the original lease proposal. (In a letter to Senator Warner dated November 5, 2003, the Department of Defense (DoD) indicated it would purchase no more than 13 tanker aircraft a year and delay the delivery of the 100th tanker until 2014. CBO used this new delivery schedule in estimating the cost of the alternatives you specified.)

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