Four billion dollars for a multi-year budget for the planes that comprise Air Force One is not going to make a dent in a $4 trillion a year federal government budget, says Max Wolff, market strategist at 55 Capital.
INTERNET (DECEMBER 6, 2016) (SOCIAL MEDIA WEBSITE) – U.S. President-elect Donald Trump urged the government to cancel Boeing’s new Air Force One plane in a Twitter post on Monday (December 6), saying it was too expensive, but an analyst told Reuters it would have minimal effect on the federal budget.
“Boeing is building a brand new 747 Air Force One for future presidents, but costs are out of control, more than $4 billion. Cancel order!” Trump said in a tweet.
The U.S. Air Force awarded Boeing an initial contract worth $25.8 million. Details about the total value of the new contract have not been released, but the Air Force has previously said that it had earmarked $1.65 billion for two replacement jets.
Max Wolff, market strategist with 55 Capital, told Reuters money spent on the planes would not make a dent in the federal budget.
“I think what we’re seeing here is some grand standing, sort of say, ‘Hey, look, I can be tough on companies, I do care about some of the sort of hokey, save a couple bucks type of things that are very popular in the country.’ They’re not very meaningful, domestically or internationally. But, I guess they’re something. And, if you’re used to getting nothing, they’re probably exciting. And, if you don’t think about numbers, and what they mean, and the scope of the federal budget deficit, or the federal spending, and they probably seem like a big deal,” he said.
Wolff told Reuters other companies are watching and taking cues from the president-elect.
“Folks who sell a lot of what they sell to the U.S. government are even more likely to be impressed, and moved around by comments from the highest official in the U.S. government, or at least the incoming highest official in the U.S. government, as pertains to their corporate undertakings,” he said.
Boeing issued a statement regarding the Air Force One program, saying the company is currently under a contract for $170 million “to help determine the capabilities of these complex military aircraft that serve the unique requirements of the President of the United States.” In the statement, Boeing said it is “working with the U.S. Air Force on subsequent phases of the program allowing us to deliver the best planes for the President at the best value for the American taxpayer.”