Congress OKs relief package for airlines

WASHINGTON -- Congress approved a $15 billion relief package for the airline industry Friday, taking swift action to restore vitality to a sector of the economy that has taken a direct hit from the Sept. 11 attacks on the World Trade Center and the Pentagon.

The 356-54 House vote in favor of the rescue plan came hours after the Senate approved the same bill 96-1. It now goes to President Bush, who strongly supports it.

"A dagger was put into the heart of our economy as planes were put into these buildings," said House Democratic leader Dick Gephardt of Missouri. "Acting to save this industry and keep it going forward is in the highest and best interest of all the people in our country."

The measure was the second installment of massive financial aid approved by Congress to soften the impact of the nation's worst experience with terrorism. Last week, with equal speed, Congress sent to the president a $40 billion emergency spending bill to aid the victims, boost recovery efforts and improve security.

Most of the House opposition to the bill was among Democrats who said it didn't go far enough because there were no provisions to support the 100,000 airline and Boeing workers being laid off. Sen. Peter Fitzgerald, R-Ill., cast the only dissenting vote in the Senate.

But supporters warned that without decisive steps to rescue the industry, there will be no airline jobs left to save.

"We are looking at a situation where the airline industry, which is a critical element in our economy, is right on the verge" of economic collapse, said Sen. Christopher Bond, R-Mo.

The legislation also provides airlines, hit by higher insurance premiums and rising security costs since the attacks, with some liability protections and authorizes $120 million to help ensure that small communities don't lose their air service.

It states that airline executives who seek government assistance may not receive salary increases over the next two years if their current salaries are above $300,000.

"We're at a very clear, obvious, arithmetically inevitable point in time where we have to say to the aviation industry of the United States, and more importantly to the American people, that there are going to be planes flying on Monday," said Sen. Jay Rockefeller, D-W.Va.

Airline officials have campaigned hard for the aid, saying that the grounding of air service after the attack and the subsequent loss of customers will cost them $5 billion by the end of this month. The industry says its revenue expectations through the middle of next year are now down $24 billion, and several major carriers could cease operations unless it receive a cash infusion and help in coping with soaring insurance premiums.

Congressional leaders and White House officials reached agreement on the bill late Thursday night, but had trouble getting it to the floor because of concerns raised Friday morning by lawmakers from both parties.

Many Democrats were upset that the bill did not include help for the some 100,000 airline workers facing job losses. "This has been rammed at us by lots of people in suits who don't care about people who don't wear suits," said Rep. David Obey, D-Wis.

Senate leaders agreed to consider a separate bill introduced by Sen. Jean Carnahan, D-Mo., that would provide up to $3.75 billion in health insurance, unemployment benefits and training for displaced airline workers.

Some Republicans objected to a provision to relieve United and American, the two airlines whose aircraft were hijacked, from liability for victims on the ground. Under that provision, the attorney general is to appoint a "special master" to decide on claims for those who opt not to file suit in federal court. Republicans warned this could create a new entitlement and cost the government billions.

Fitzgerald and Sen. Jon Corzine, D-N.J., also won inclusion in the bill that require companies receiving loan guarantees to give the government warrants, or options to buy, the company's common stock.

Fitzgerald said this provision, patterned after the Chrysler bailout of 1979, would better protect the government from losing money, but said he still voted against the bill because he thought Congress was "panicking with the taxpayers' money."

In another measure, the transportation secretary and comptroller general were given auditing powers to ensure that the losses claimed by the airlines were legitimate. Sen. Ron Wyden, D-Ore., said he was also working to make sure that the government would get its money back if it was shown that an airline had exaggerated its losses.

"To the taxpayer, it's vital that we don't have to pay for inflated data from the airlines," said Rep. Lloyd Doggett, D-Texas.

The bill also extends war risk insurance to domestic carriers over the next 180 days and ensures that air service to smaller communities won't be disrupted as a result of the terrorist strikes.