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Congress to aid airlines?
September 17, 2001: 6:59 p.m. ET

Lawmakers push for congressional help for beleaguered airlines
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WASHINGTON (CNN) - Several lawmakers Monday warned that Congress must act to help the airline industry, which has been reeling financially since terrorist assaults, which grounded air traffic for much of last week.

The highest ranking Democrat on the House Transportation Committee is pushing an aid package for the airline industry almost twice as big as the relief considered by the House two days ago.

Rep. James Oberstar, D-Minn., spent the day in meetings with airline industry lobbyists. Just before he spoke with CNN, a team from American Airlines had been in his Capitol Hill office.

Oberstar said he is very concerned that airline stocks are falling because Congress has not yet passed a measure to provide financial help.

Read more about airline stocks under pressure

Several airlines have announced they will lay off employees because of the financial hit they took.

"Without direct financial intervention by the federal government we could soon see the financial liquidation of the airline industry," Oberstar said. "That is a very serious problem. Aviation represents 10 percent of our gross domestic product. That's $700 billion dollars of a $7 trillion economy and the underpinning of mobility on which our whole economy depends."

Oberstar said the package he is discussing with colleagues would contain $5 billion in direct cash payments to airlines. The measure would also include $15 billion-to-$19 billion dollars in other relief, including loan guarantees. The bill might also repeal a tax on jet fuel paid by the airlines and it might suspend other fees, such as passenger taxes and a tax paid by cargo shippers. In addition, Oberstar wants the bill to contain language that would "federalize" security aviation security at the nation's airports.

Details of the exact language of the measure were still being discussed Monday.

Aides to the chairman of that committee, Rep. Don Young, R-Alaska, said no decision has been made yet on the exact size of the airline bailout, but a hearing has been scheduled for Wednesday.

"The numbers are higher than we knew on Friday, that's clear," one aide said. "But what we don't know are the figures."

"We want to make sure there's money there," the aide said. "But at the same time, we don't want to give them the keys to Fort Knox."

House leaders hope to have a measure ready for a vote in the House when it returns for business later this week.

Key senators are also calling on Congress to help the industry.

"We don't need any further evidence to know that the airline industry is in dire trouble," said Sen. John McCain, R-Ariz., the ranking member on the Senate Commerce Committee. "We must act immediately to support this crucial sector of our national transportation infrastructure which is so vital to our commerce and way of life."

New Jersey's two Democratic senators, Robert Toricelli and John Corzine, called for immediate grants and guaranteed loans for the airlines. They offered no dollar figures on how large the aid package should be.

But the top Democratic senator on the Commerce Committee, Sen. Fritz Hollings, D-S.C. expressed some reservations about assisting the airline industry.

"I recall that in testimony before the Commerce Committee, the airlines told us they were going broke long before these attacks occurred, while at the same time giving their executives $120 million in salaries and bonuses," Hollings said in a statement released over the weekend.

One aide said Hollings is not saying "no" to an airline bailout package, he is urging his colleagues to take their time and make sure the airlines are "on their best behavior."

Senate Republican and Democratic aides said there was a concern on the Senate side that House members were "just tossing money" at the problem.

The House delayed action on an initial bailout measure in the wee hours of Saturday morning after several members expressed concern that they would be helping the airline industry at the expense of other industries that could suffer great losses such as tourism, insurance and the financial industry.

"What precedent are we setting in doing this for one industry and not for others?" said Rep. Lloyd Doggett, D-Texas. Doggett had raised those objections on the House floor early Saturday and said he has since gotten hundreds of e-mails and phone calls from people representing the airline industry.

Oberstar insisted the airline industry must be a first priority.

He compared the situation with the airlines to the federal bailout of Chrysler in the late 1970s. But he said this situation is more serious. "If the U.S. airlines go down, there are no other airlines," he said. "No one else will step in to provide that service. It's gone. We lose it, maybe forever. That is the dimension of the problem." graphic

-- by CNN Congressional Correspondent Kate Snow


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