F-35 Joint Strike Fighters 121015-f-zz999-755

ARLINGTON:  “I don’t have the exact number yet,” Air Force Maj. Gen. Edward Bolton said Tuesday, but to pay the bill for sequestration, the service might have to cut its fiscal 2013 procurements by “two, three, four, maybe even five F-35s.”

“That money’s just gone,” sighed Bolton, the service’s outgoing deputy assistant secretary for budget, as he addressed a gathering of industry insiders and retired officers (often the same people) at the Arlington headquarters of the non-profit Air Force Association.

The prospective cut would bring the service’s 2013 purchase down from the 19 Joint Strike Fighters requested in the president’s budget to as few as 14.

But all is hanging. “I have final sequestration numbers; I don’t have final decisions on how they’re going to implement that in some of the acquisition programs,” he said.

This is just the leading edge of sequestration’s impact on Air Force investment programs – and on the delicate political balance between the active-duty force, the Air Force Reserve, and the Air National Guard.

The near-term impact of sequestration has been on training and maintenance, so “this year I’m talking mostly about impacts to operational readiness,” said Bolton, who’ll retire in less than 30 days. But a deeper, longer-term problem will confront his successor, Maj. Gen. (select) Jim Martin: “When he’s standing here next year, he’s going to be talking about modernization impacts,” Bolton said. “That becomes an industrial base issue.”

On paper, sequestration applies evenly to everything in the Pentagon budget except for military pay, which is exempt. But in practice it hits readiness and investment at different speeds. Training and maintenance are paid for as you go, but weapons programs have long lead times, so the government may not actually write a check to the contractor for a given item until a year or more after Congress appropriated the money. Those “unobligated balances” provided a cushion to protect procurement programs from feeling the impact of sequestration immediately. That cushion is now gone.

“That’s a trick you can’t do twice,” said Bolton. In 2013, “we’ve got over a billion dollars of unobligated prior year balances we were able to contribute [to paying down the sequester bill]. Next year, this year’s the prior year…Next year, it’s going to be more painful.”

“Are you all sufficiently depressed?” Bolton asked the audience with a bleak grin. “It’s a grim picture.”

The budget pressures will also force the Air Force to request reductions in the Air National Guard, something that provoked outrage last year before Congress came to a compromise that cut the Guard somewhat.

“To say it was not well received would be an understatement,” Bolton said. “In my entire 30 years as an officer, of the 10 to 15 most intense meetings I’ve ever been in, probably 12 or 13 of them were associated with this moment on the Hill.”

“Here’s a mistake that the Air Force made,” he went on: “The Air Force decided to address a very difficult issue… in a very short time period…. Our ability to do the field work that it takes to coordinate that on the Hill and down in the states… so it was politically untenable.”

But cutting the Guard and Air Force Reserve is something the service is going to have to tackle. It can’t just cut the active force: “The active duty has gone down at a much steeper rate in the past two decades,” Bolton argued. “It’s gotten out of whack.”

To try to forestall another firestorm, the service has appointed “three amigos” – a two-star general from each of the three components, active, reserve, and guard – to come up with a new proposal together. “hopefully everyone will abide by the results because they’ve participated,” he said.

I cornered the general after his remarks to make sure I’d heard him right about the F-35. Didn’t the Air Force already talk about losing five Joint Strike Fighters this fiscal year? Well, yes, but that five-plane reduction was already built into the 2013 budget request rolled out over a year ago.  “Now, as part of sequestration,” Bolton told me, “there’s going to be additional tails taken. I don’t know what the number is. Probably three, plus or minus two.”

The program of record remains at 1,763 of the Air Force’s F-35A variant of the Joint Strike Fighter, Bolton emphasized. The FY 2013 budget request shuffled more of those into the out years, took 98 out of the current Future Years Defense Program (FYDP) and five out of fiscal ’13, reducing that year’s planned purchase of 24 planes to 19. At least in theory, however, the Air Force will still buy all planned 1,763 planes by the same end date, it would just buy more in later years than originally planned.

That was the plan as of January 2012, when everyone thought the automatic budget cuts known as sequestration were so horrible that someone – someone else – would stop it. “I would have bet you anything that this would never happen,” Bolton told the audience at AFA. In fact, “initially, we were not permitted to do sequestration planning,” he said. (That was all part of the high-stakes brinksmanship between the White House and Republicans in Congress). When everyone finally admitted the sequester would happen after all, Bolton said, the order went out to Air Force budgeteers – and here he snapped his fingers – “find nine billion dollars.”

“We went to the F-35 program for a couple of reasons,” he said, but it boils down to what is sometimes called Sutton’s Law: “That’s where the money is.”

[For those who saw this story and then saw it vanish earlier tonight: we are still getting used to our new system and we posted it accidentally. Apologies. The Editor.]

Comments

  • http://twitter.com/E_L_P Eric Palmer

    Not a big deal. The F-35A doesn’t become moderately useful until it rolls off the line with TR-2 hardware and is WELL tested as such with Block 3 software. The batch of jets the General is talking about will have the TR-2 hardware (LRIP-6 and higher) but it will be some years until operational testers can hand over a go-to-war aircraft with the Block 3 software.Also I am curious about the term “modernization” being thrown around re: USAF. As delivered, the F-35 is unlikely to be able to stand up to emerging threats. The next SAR will be out soon. Let us see how enlightening that is.

  • Nicolas Protonotarios

    So, with this happy piece of news, does anyone know how much the F-35 will cost after all? The way things are going with the economy, sequestration will not be the problem, but the symptoms of the disease. If the plan to get the total number of 1,763 planes for the Air Force is to be maintained by “buying more planes down the line”, I just don;t see it happening. Fly-away costs are bound to increase -and substantially so- as initial purchases slow down and then what? Foreign buyers for the plane may not be able to afford their own total programmes and may have to cut back their requirements and so on and so forth… The F-35 will probably survive because it’s too big to kill and too advanced to replace, but will the industries involved survive the vicious circle?

  • http://twitter.com/E_L_P Eric Palmer

    “It’s about $37 million for the CTOL aircraft, which is the air force variant.”
    - Colonel Dwyer Dennis, U.S. JSF Program Office brief to Australian journalists, 2002-

  • Philby

    Exports of the F-35 are already going backwards Nicolas.

    The UK originally indicated a requirement of 100 plus, they are now talking about a number between 48 and 70.

    Canada signed on for between 50 and 70 but the budget allocated will buy less than 40.

    Same problem with the Dutch.

    Italy has cut back from 120 to around 90 but probably don’t have the money for even that many.

    Australia has now bought 36 F-18F’s so their requirement has come down for the foreseeable future to around 60.

    The Danes have reopened their competition.

    Bit of a mess in short.

    • http://defense.aol.com/ Colin Clark

      Ah, but the Israelis, the Japanese are buying and, we’re pretty sure, the South Koreans will go for JSF.
      The picture is both more complex and more positive for the program overall than this comment would indicate.
      Also, with CBO noting the budget deficit dropping very quickly I think you’ll see federal funding pressure lessening in 9 months or so.
      Colin Clark, Editor, AOL Defense

      • James

        You were also pretty sure that the much-heralded* Singapore JSF order was imminent a month or more ago, but instead it seems they ordered a bunch of F-15 stuff. Curious, that…

        *Heralded that is by the usual suspect shills at SLD and the Lockmarting Institute…

        • http://defense.aol.com/ Colin Clark

          My understanding is they put it off for political reasons. Watch and wait a bit.
          Colin Clark

  • philby

    Ah Colin, the Japanese have actually committed to 4 aircraft at the moment and Israel is pretty much buying its initial (12) F-35′s with FMS credits, so the US taxpayer is picking up most of the bill.

    It is not the technical issues with the F-35 that are really the bother. it is whether the production line can get anywhere near the 200 aircraft a year economic rate that it was designed for. If it cannot, the cost per aircraft will stay high therefore limiting purchases therefore keeping the cost high and so on.. ……..

    The simple equation is that the 200 per year was based on the US taking around 120 all versions per year and exports around 80 PY.
    It will be nail biting for Lockheed to see what happens, but at the moment the US has been ordering around 70 fast jets (all types) per year (pre-sequestration) and the 80 exports per year is looking hopeful too.