This article from NYTimes.com has been sent to you by psa188@xxxxxxxxx Sens. Look at About $3 Billion Airline Aid March 28, 2003 By REUTERS Filed at 10:13 p.m. ET WASHINGTON (Reuters) - The U.S. Senate's Republican leadership has agreed on close to $3 billion in relief to the beleaguered airline industry and will attach it to a war spending bill next week, Senate aides said on Friday. But the Republicans are coupling their offer to pick up some security costs with a crackdown on overly generous compensation payments to airline executives, which Senate Commerce Committee Chairman John McCain of Arizona has blasted as shameful at a time of widespread industry layoffs. With the industry projecting $4 billion in travel-slump losses if the Iraq war lasts 90 days, lawmakers in the House of Representatives are also trying to craft an airline relief proposal of similar size, but are uncertain how soon to act. Sen. Kay Bailey Hutchison, a Texas Republican, said after speaking with Senate leadership that the body was moving to a deal that would include rolling back for six months the security taxes that airlines pay. She expects the measure to pass the Senate by April 11. ``We are trying to come in at the $2 billion level,'' Hutchison told a press conference in Dallas. ``It will have a security tax pause for six months. It will have a payment for the direct costs airlines have borne for other security costs.'' The package would cost the federal government about $2 billion, but was worth around $2.8 billion in the relief it would supply to the struggling airline industry, said a spokeswoman for Sen. Trent Lott, a Mississippi Republican and chairman of the Senate aviation subcommittee. Ultimately, the provisions will have to pass both chambers and be signed by President Bush if they are to become law. Bush did not proposed any relief for the airlines in his $75 billion Iraq war spending plan, but administration officials are consulting with lawmakers on the subject. Airlines would have to limit executives' pay for two years in order to get one part of the aid -- an extension of war risk insurance for another year, worth between $800 and $1 billion to the industry. ``The executives' total compensation would not be able to exceed their 2002 base salary,'' a Senate Republican leadership aide said. He did not have further details. REIMBURSING SECURITY COSTS The Senate Republican proposal also includes reimbursement of about $1.1 billion for security mandates imposed on the airlines after the hijack attacks of Sept 11, 2001, including the strengthening of cockpit doors, ramp security and aircraft inspections, Lott's spokeswoman Susan Irby said. Airlines will have to document the expenses to be reimbursed, she said. Security fees on passenger tickets -- up to $5 per one-way trip -- would be suspended for six months through Sept. 30 of this year. That is worth another $900 million to the airlines, Senate aides said. Airlines say they are forced to absorb the costs of these fees instead of passing them on to passengers in their tickets. Tax holidays from fuel levies, which have been sought by the industry, appear unlikely in either the Senate or the House of Representatives, aides said. The Senate Republican agreement, reached during a meeting with Sen. Majority Leader Bill Frist in his office, was backed by McCain; Lott; Hutchison, Senate Appropriations Chairman Ted Stevens of Alaska; and Sen. Norm Coleman of Minnesota. Reaction from Democrats to the Senate Republican plan was muted. Senate Democratic whip Harry Reid issued a statement saying he was working with Senate Republicans on helping the airlines, but he did not specifically commit to their plan. NOT A 'BAILOUT' A spokesman for the ranking Democrat on the Senate Commerce Committee, Ernest Hollings of South Carolina, said that while he was willing to help airlines with security mandates, he was opposed to lifting the security fees on passenger tickets. In the House, lawmakers working on an airline aid plan are waiting to see whether Speaker Dennis Hastert favors attaching a similar aid proposal to the war spending package, said a spokesman for aviation subcommittee chairman Rep. John Mica. Hastert's spokesman says he is ``keeping his options open.'' Senators and their aides were careful to say that their proposal is associated with war and security costs faced by the airlines and was not a ``bailout.'' Many lawmakers do not favor rushing to the assistance of the airlines so soon after a $15 billion package of direct aid and loan guarantees was given immediately after the Sept. 11, 2001 hijack attacks. ``I believe this is an effective way to help the airlines with their security costs directly related to the war at this critical time,'' Lott said in a statement. http://www.nytimes.com/reuters/business/business-airlines-aid.html?ex=1049956849&ei=1&en=78c2ac8806eef52e HOW TO ADVERTISE --------------------------------- For information on advertising in e-mail newsletters or other creative advertising opportunities with The New York Times on the Web, please contact onlinesales@xxxxxxxxxxx or visit our online media kit at http://www.nytimes.com/adinfo For general information about NYTimes.com, write to help@xxxxxxxxxxxx Copyright 2003 The New York Times Company