White House Threatens To Veto FAA Reauthorization Bill

Wed. Apr. 30, 2008


The White House Tuesday threatened to veto a Senate FAA reauthorization bill in part for not including aviation user fees and other Bush administration ideas for modernizing the nation's air traffic control system.

The bill -- largely encompassing a deal between Finance Chairman Max Baucus and Commerce Aviation Subcommittee Chairman John (Jay) Rockefeller, D-W.Va., on how to finance FAA modernization -- "does not include critical reforms proposed by the administration that would bring real relief for the traveling public," according to Tuesday's Statement of Administration Policy.

This includes "more closely aligning FAA's revenues with its costs through fair fees linked to usage of the system, thus providing price incentives for systems users to use limited airspace resources more effectively," according to the SAP.

FAA last year proposed to eliminate the 7.5 percent domestic passenger ticket tax and cut the international arrival and departure tax in half and install new aviation user fees supported by airlines.

FAA and the airlines want to lessen the difference between what the commercial and general aviation sectors contribute to the federal modernization effort, a goal shared by Rockefeller.

Rockefeller initially offered a $25 per flight surcharge but agreed to drop it in a deal with Baucus. They agreed to keep a Finance-approved 65 percent increase on the general aviation fuel tax and dropped an increase in the international departure ticket tax that was opposed by airlines.

The White House also strongly opposes the bill's replenishing of the highway trust fund of $3.4 billion that has been spent since 1998 for emergencies including the Sept. 11, 2001, terrorist attacks. It also suspends some transfers from the trust fund to the Treasury, preserving $745 million.

Lawmakers have been pushing for more federal highway funding and other means addressing an expected shortfall in the highway trust fund starting next year.

But the SAP said the bill "attempts to justify a departure from this principle by retroactively deeming costs from past emergencies as requirements to be borne by the General Fund. But the result is both a costly gimmick and a dangerous precedent that shifts costs from users to taxpayers at large."

The White House opposes other nonaviation items, including tax-credit bonds for rail infrastructure and the doubling -- from 5 cents a barrel to 10 cents -- of an oil spill tax. That offset would raise $3.5 billion.

Commerce Aviation Subcommittee ranking member Kay Bailey Hutchison, R-Texas, said she has very strong concerns regarding "extraneous tax provisions that have nothing to do with aviation."

Senate leaders in both parties were figuring out what and how many amendments would be offered to the bill. "The deal is still in progress, so we don't yet know what or how many amendments will come up," a spokesman for Majority Leader Reid said.

The only amendment offered so far is the substitute amendment from Rockefeller and Baucus, which was officially brought up for debate Tuesday.

It includes safety recommendations from the Transportation Department inspector general requiring FAA inspectors to verify that air carriers implement safety solutions they disclose to the agency; a national set of agency inspectors to conduct periodic, unannounced audits of FAA air carrier inspection facilities, and a cooling off period before FAA safety-inspector supervisors can go to work for an airline.

Other amendments are expected to begin being offered today.

Among those is one supported by Hutchison and Majority Whip Durbin to strip language Baucus included requiring five airlines -- American, Continental, Hawaiian, Alaska and US Airways -- to pay an additional $2 billion into their pension funds over five years.

Durbin argued the language penalizes American -- which has avoided bankruptcy and has not reduced pension payouts -- and would "force more airlines into bankruptcy ... at absolutely the worst possible moment." A Durbin spokeswoman said they think they have enough support to take it out.

Sen. John Ensign, R-Nev., might offer one amendment increasing the number of flights out of Reagan National Airport to his state and other areas outside of the airport's initial 1,250-mile perimeter. Sens. John McCain, R-Ariz., Barbara Boxer, D-Calif., Arlen Specter, R-Pa., and Minority Whip Kyl have backed the idea. Other amendments might seek to add airlines, including JetBlue, at National.

Sen. Byron Dorgan, D-N.D., will offer language suspending deposits to the Strategic Petroleum Reserve if crude oil remains above $75 a barrel.

One aspect of the FAA bill that might run into Republican opposition is an earmark by Sen. Charles Schumer, D-N.Y., GOP sources said. The earmark would allocate $2 billion to New York City for infrastructure projects; a Schumer spokesman said the funding is the last amount of $20 billion promised by the White House for rebuilding efforts following the Sept. 11, 2001, attacks.

Sen. Jim DeMint, R-S.C., disdains the earmark, claiming its funding comes from Social Security taxes.

"There is growing concern that Sen. Schumer's attempt to raid $2 billion from Social Security and Medicare to pay for local projects is terrible tax policy," said a DeMint spokesman. DeMint opposed a similar measure in 2006 when it was attached to the tax extenders bill that year, but it was removed after DeMint threatened to hold up the bill.

GOP sources said options to oppose the measure were being investigated.

The Schumer spokesman stressed the measure had President Bush's support.

"This is in the president's own budget," he said. "It's the last part of the $20 million he promised New York after 9/11. To his credit, the president has kept his word. The Senate shouldn't renege."

by Darren Goode

Wed. Apr. 30, 2008

  •  
  •