REDUCING THE DEFICIT: SPENDING AND REVENUE OPTIONS
Congressional Budget Office - March 1997


DEF-12 CANCEL THE AIR FORCE'S F-22 AIRCRAFT PROGRAM


Annual Savings							Five-Year
Savings from			(Millions of dollars)	   	Cumulative
the 1997 Plan		1998	1999	2000	2001	2002	Total

Budget Authority	1,130	3,014	3,910	5,152	6,083	19,290
Outlays			  479	1,202	1,771	2,521	3,482	 9,454

NOTE: The Administration has delayed procurement of F-22s in its 1998 plan. Appendix A shows savings against the 1998 plan.

The F-22 aircraft is being developed as the Air Force's next premier fighter and is scheduled to begin replacing the F-15 aircraft around 2000. Fighter aircraft are designed primarily to destroy enemy planes, thus guaranteeing the United States and its allies control of the air. The Air Force wants the F-22 aircraft to have supersonic cruise speed as well as stealth characteristics that make it difficult for enemy sensors to detect. The F-22 would also be designed to fly long distances and to have highly effective avionics that could make it more capable than other fighters in many types of combat.

The F-22 entered full-scale development in 1991, and according to the Administration's 1996 plan, the first F-22s were to be bought in 1998. Last year the Administration deferred purchases of the first planes to be bought with funds from the procurement account until 1999. (It still planned to buy four aircraft in 1998, but expected to fund them with development moneys and probably would have used them for testing.)

The Air Force recently announced that the program would slip again this year. The service now plans to extend the engineering and manufacturing development for the F-22 and reduce the number of aircraft purchased through 2003. It canceled the four test planes, so the first fighters would not be bought until 1999 under the new schedule. The decision stems from a recent Air Force program review that found that the F-22 engineering and manufacturing development program required additional funding and time to have a stable design before entering production. In addition, the study cited the potential for procurement costs for the F-22 to increase as much as 28 percent. The Air Force and the F-22 contractor hope to contain any growth in procurement costs by incorporating initiatives that would streamline production. The program would also include reforms of the contracting process similar to those applied to the C-17 program.

This option would cancel the F-22 program on the grounds that its additional capability may be both unnecessary and too expensive. Compared with the 1997 plan, canceling the F-22 would save $1.1 billion in budget authority in 1998 and about $19.3 billion for the 1998-2002 period. Savings from the 1998 plan over the next five years would be about $5 billion less. (The total estimated savings include procurement, research and development, and military construction.)

The high cost of the F-22 is one argument for canceling it. The Air Force planned to buy 648 aircraft in January 1993 at a total cost of about $74 billion in 1997 dollars ($86.6 billion in current dollars). The average unit procurement cost of the F-22 would have been about $83 million in 1997 dollars. Now the Air Force seems likely to buy no more than 438. Total program costs declined by only 15 percent (in 1997 dollars) even though the total quantity fell by nearly a third. The reduction in quantity, and other factors, pushed up the unit procurement cost of the F-22 to about $91 million (in 1997 dollars), about 10 percent more than the estimate provided in January 1993 and roughly 65 percent more than the average cost of the F-15E.

Since the costs of many weapon systems increase during the full-scale development phase that the F-22 entered in 1991, actual costs could rise even more. For example, the F-22's cost could increase if the Air Force has to fix design flaws. The Air Force argues that the April 1992 crash of the only flying prototype of the F-22 was caused by the way the aircraft was operated and that certain operating restrictions or, at most, minor software changes should prevent future problems. But such mishaps may portend costly production problems. Some recent press reports also suggest that the F-22 may be experiencing other development problems, such as increases in weight, that can raise its costs. The program may also have to engage in a costly redesign of some avionics that have become obsolete over the lengthy development process. And unit costs will rise if F-22 procurement is reduced even further below planned levels, as seems likely.

Events in the Persian Gulf War suggest that current Air Force aircraft are able to counter any threat less severe than that formerly posed by the Soviet Union, which many analysts consider to have been the only hostile country whose air force had the capability to threaten U.S. fighters. In view of that reduced threat, the F-22 may provide more capability to attack enemy fighters than the United States needs.

Moreover, other types of aircraft may prove to be more useful in future conflicts. The extensive use of tactical bombing in the Persian Gulf War emphasizes the value of aircraft that can attack land targets, perhaps in preference to aircraft such as the F-22, which is designed to combat enemy fighters. Given the changes in the nature of the threat, strategies other than buying expensive F-22 aircraft might better meet the Air Force's future needs. Such strategies might include upgrading existing aircraft or developing a new plane that is less capable but cheaper than the F-22.

Nor does the Air Force need to buy the F-22 any time soon to support the reduced size of its tactical forces. CBO's analysis suggests that even if the Air Force procured no fighter aircraft after 1993, it would have more than enough through at least the middle of the next decade, though it would experience shortages in its overall tactical fighter fleet around the turn of the century.

The Air Force contends that the improved capabilities of the F-22 aircraft are required even in a world in which U.S. tactical air forces are smaller and the threat is much reduced from that posed by the former Soviet Union. If the United States canceled the F-22 program, the capability of its fighters through the first decade of the next century would be similar to that of today's F-15 aircraft, which entered development in the 1960s. By the next decade, some regional powers may possess fighter aircraft that are at least the equal of the F-15. Thus, the Air Force believes that the United States, to maintain its edge, needs the improved capability the F-22 aircraft offers. The Air Force also raises concerns about increased threats from the ground that may degrade the survivability of current aircraft. Modernizing surface-to-air missile systems, which may be more accessible to regional powers, may also be cheaper and easier than modernizing fighter fleets. To counter those threats, fighters may need the improved capabilities of the F-22, including stealth and higher speed.

The Department of Defense plans to provide the F-22 with capabilities to perform the ground attack mission--a plan that may be the Administration's response to criticisms that the F-22 is less useful in regional conflicts if it is a pure fighter aircraft. The F-22's capability to attack targets on the ground may be modest, however, according to some press reports. And its ability as a bomber will undoubtedly be less than that of a plane developed primarily for the bombing mission.