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February 5, 2008— The Air Force seeks $117 billion in Fiscal 2009 to sustain today’s fleet in wartime, modernize for the future, and provide for its personnel, according to service officials and documents.

“When we developed the budget, this was our guidepost: Win today's fight, take care of our people, and be prepared for tomorrow's challenges,” Maj. Gen. Larry Spencer, USAF’s deputy assistant secretary for Budget, said Feb. 1 while discussing the proposal.

The request is up $8.6 billion, or roughly eight percent, compared to the $108.4 billion that Congress provided the Air Force in this fiscal year. But some of the increase is already eaten up by the rising prices of fuel and doing business, so the higher number isn’t just a net windfall, Spencer said.

“Right off the bat, we had to pay $2.1 billion just for the cost of fuel, utilities increases, contract increases, et cetera,” he said. “It is important to keep that in mind.”

While the new budget request reflects that USAF is “holding its own” in readiness and improving the quality of life of its airmen, it also shows that the service must make sacrifices in its infrastructure in order to free up resources for modernization, Spencer and additional Air Force budget experts said. But no big-ticket items sustained large cuts or were cancelled, they noted.

Further, the Fiscal 2009 request does not reflect USAF’s desire to bolster its modernization accounts by $20 billion on average over the next 20 years to field a modern fleet of 86 combat wings that service officials call the Required Force, the USAF budget experts said. The Air Force’s goal is to include that funding growth in its Fiscal 2010 budget proposal, service officials have said on previous occasions.

Still all areas of the Fiscal 2009 proposal are up compared to the amounts that Congress provided in Fiscal 2008, except for infrastructure: $41 billion for modernization [plus $3.6 billion compared to Fiscal 2008], $37.6 billion for personnel [plus $1.7 billion], and $33.2 billion for readiness [plus $3.7 billion] and $5.2 billion for infrastructure [minus $400 million].

USAF’s total obligation authority in Fiscal 2009 grows to $143.9 billion [compared to $134.6 billion in Fiscal 2008] when factoring the $26.9 billion [$26.2 billion in Fiscal 2008] for cross-service projects in areas such as the Defense Health Program and intelligence and special operations. While portions of these activities fall under the Air Force’s budget, USAF does not manage these so-called “non-blue” accounts.

When factoring the $26.9 billion, the Air Force’s request accounts for 27.92 percent of DOD’s $515.4 billion budget proposal the Bush Administration presented to Congress Monday.

USAF is “accepting risk” in military construction to free up resources to procure new aircraft space systems and other hardware, Spencer said.

“We’re pushing money into modernization,” he said. “It’s the toughest priority to achieve.”

This means only 54 Milcon projects, including five in the Middle East/Near East, are supported compared to 81 in this fiscal year, Spencer said. It also means that more money will be applied to sustaining existing facilities since they must last longer. However BRAC 2005 implementation remains on track for completion in September 2011, he said.

Under the Fiscal 2009 request, USAF seeks 93 aircraft, 52 of which are unmanned aerial vehicles, Spencer said. This includes 20 F-22s—the final tranche of a three-year multiyear contract, eight F-35s, six CV-22s, four MC-130s, two HC-130s, and one C-29A aircraft. In the unmanned realm, it seeks to buy 38 MQ-1Bs, nine MQ-9s, and four RQ-4 Global Hawks, according to Spencer’s briefing charts.

The modernization proposal also would buy two Space Based Infrared System satellites, four space launch vehicles and launch services, and more than 7,700 missiles and bombs, the charts showed.

The budget request seeks no additional C-17s beyond the current 190-aircraft program of record, but it also does not include funding to cover the costs of shutting down the C-17 production line, Spencer and his colleagues said.

Further, there is no money in the budget request towards the purchase of F-22s beyond the existing program of record that stands at 183 aircraft. But like the C-17, there are no funds to terminate the F-22 line either, the officials said.

“We are still working with OSD to figure out where we are going to end up with F-22, so there is no shutdown cost in the budget,” Spencer said. “Do we want the line to stay open? Yes, because we have a requirement for 381.”

OSD denied the Air Force's request to reapply the $497 million originally earmarked in Fiscal 2009 to shut down the F-22 line. The service had wanted to obtain long-lead parts for an additional lot of 20 Raptors, he said. That money was instead moved into an account for F-15 maintenance to address the structural issues that caused an F-15C crash in November 2007 and that have kept about 162 Eagles grounded indefinitely.
 Spencer said the Air Force isn’t sure yet exactly how the F-15 money will be applied.

“We haven't pinned down exactly what will happen in terms of what specific airplanes we will repair, but we do have some money in the budget for repairs,” he said.

Spencer said the Fiscal 2009 budget proposal is “good news” for Air Force personnel and their families because it would provide for 3.4 percent pay raises for military members and a 2.9 percent pay hike for USAF civilians. It also includes a 4.9 percent boost in housing allowance, thereby “keeping pace with housing cost,” he said.

The request supports a Total Force end strength of 662,000 active duty (316,600), Air National Guard (106,700), Air Force Reserve (67,400), and civilian (171,300) personnel. The Air Force is continuing plans to draw down the active duty to 316,000 full-time-equivalent positions, Spencer said. However, the Air Force leadership has said this drawdown may be at least partially rescinded since more airmen will be needed to support a growing Army and Marine Corps and to support missions like the fledgling Africa Command.

Spencer said the budget request includes slightly more “targeted money” than in Fiscal 2008 for recruiting and retention. While USAF met its 2007 recruiting and retention goals and is on pace to meet them in 2008, there exist concerns “with some hard-to-fill skills like medical and pararescue” and with “NCO retention from six to 14 years,” he said.

The readiness request would fund 1.4 million flying hours for pilots, produce 1,200 new pilots, and improve live-fire combat training, he said.

Of the Air Force’s top procurement priorities, it seeks $894 million for the KC-X tanker program. A portion of this, $62 million, would be applied toward the advanced procurement of parts for the five aircraft that USAF intends to buy in Fiscal 2010, Spencer said. The lion’s share of the KC-X funds, $832 million, would be for Research, Development, Test, and Evaluation activities, Spencer said.

The CSAR-X helicopter recapitalization program receives $320 million under the proposal. Most of this, $305 million, would go for RDT&E work, while $15 million would support the advanced procurement of two helicopters in Fiscal 2010, he said.

 The Air Force requests $3.42 billion for the F-35 program, including $1.524 billion for RDT&E and $1.896 billion to buy eight aircraft and apply for the long-lead-time materials for 12 aircraft in Fiscal 2010. As in the previous two years, the Air Force’s request does not include funding for the F136 engine program, the second engine being developed for the F-35, Spencer and his colleagues said.

 The C-5 RERP program, which is undergoing an OSD-led review due to hefty cost growth, would get $561 million in Fiscal 2009, including $123.2 million for RDT&E and $438 million for procurement of three RERP upgrade kits, the Air Force budget experts said.
 USAF would also apply $32.2 million to the Army-Air Force Joint Cargo Aircraft program, including $26.8 million for RDT&E and $5.4 for procurement of parts for the three aircraft that the Air Force plans to purchase in Fiscal 2010, they said.

And, the Air Force requests slightly more than $1 billion for improvements to its fleet of B-1B, B-2A, and B-52H bombers, but does not include money for its next-generation bomber that it intends to field in 2018. Air Force officials have previously said the funding required to meet the 2018 timetable will be addressed in the service’s Fiscal 2010 program objective memorandum already being developed.

Space funding, at $8.577 billion, continues to be a robust portion of the Air Force’s total blue budget request. This includes $4.860 billion for RDT&E and $3.717 billion for procurement.

Spencer said the Fiscal 2009 request would deliver five space systems: a Wideband Global SATCOM, Advanced Extremely High Frequency; Space Based Space Surveillance, Global Positioning Block IIF, and the first Space Based Infrared System geostationary Earth orbit satellite. Investment would continue in the next-generation systems GPS III and Transformational Satellite Communications system, at $728 million and $843 million, respectively. Space situational awareness funding would rise to about $240 million, USAF officials said.

The Air Force’s request would start a program called Third Generation Infrared Surveillance in place of the Alternative Infrared Satellite System that is being phased out. The new effort, funded at $149 million in Fiscal 2009, would mature staring IR focal planes arrays and give USAF the option of procuring them for on-orbit use next decade instead of buying a fourth SBIRS satellite, the officials said.

OSD has not yet asked the services to provide a breakdown of how they would like to apply the $70 billion in supplemental appropriations for the GWOT in Fiscal 2009 that OSD has already announced it will seek. The request for four F-22s that is expected to be included in Fiscal 2009 supplemental legislation may or may not be included as part of this initial emergency package, but rather could come in a subsequent proposal, the Air Force officials said. The per-unit flyaway cost of these four airplanes is projected to about $150 million, they noted.