Bush administration prefers simple airline aid plan

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Bush administration prefers simple airline aid plan

WASHINGTON (Reuters) =97 The White House may not be able to talk Congress=20
down from approving more than $3 billion in airline aid, but the Bush=20
administration prefers that any package be structured so it can be=20
dispersed quickly. Congressional negotiators begin work this week on=20
competing House and Senate plans, hoping to quickly craft a compromise that=
=20
will be attached to the Iraq war spending bill. The Transportation=20
Department says a lesson regulators learned from the bailout approved for=20
the airlines after the Sept. 11, 2001, hijack attacks was the length of=20
time it took to analyze requests for aid and distribute grants. That=20
program took effect more than a year ago and included $5 billion in cash=20
and $10 billion in loan guarantees. While most major carriers did not take=
=20
advantage of the loan program, all of them sought cash reimbursements for=20
losses related to the attacks on New York and Washington. As of mid-March,=
=20
the Transportation Department had received more than 400 applications for=20
compensation and still had a full-time staff handling a backlog of=20
requests. The agency has stretched payments over three installments,=20
analyzing complex applications and validating calculations from the=20
airlines on how much money they should receive. Amounts have varied from=20
$774 million for United Airlines, owned by UAL Corp., which is in=20
bankruptcy, to under $1,000 for a tiny aviation firm. Big carrier payments=
=20
were completed months ago. But senior Transportation Department officials=20
have told Congress and said in interviews they hope the new aid plan will=20
coalesce around proposals to reimburse or forgive certain fees or taxes.=20
They hope the payout or credit could be done within weeks, rather than over=
=20
a period of months. "We do want the bills to be written in a manner that is=
=20
practical. The simpler and more straightforward, the better," one=20
administration official said. "It is essential that a financial aid package=
=20
designed to assist just one affected industry =97 the airlines =97 include=
=20
narrowly defined relief terms and be of limited duration," said=20
Transportation Department Inspector General Kenneth Mead.

AIRLINE AID PLAN OPTIONS
The separate aid plans would suspend certain fees for aviation security for=
=20
the next six months. The government would pay the carriers between $900=20
million and $1.1 billion. But the $3.2 billion House proposal offers a=20
retroactive fee reimbursement to significantly boost the amount of money=20
each airline would receive. That would add more than $1 billion to the cost=
=20
of the bailout and require applicants to account for the amount of fees=20
each has collected since the early part of last year. The payout would vary=
=20
for each carrier. The $3.5 billion Senate plan would also reimburse=20
airlines for some of the estimated $300 million cost of replacing cockpit=20
doors with stronger ones on thousands of planes. The Federal Aviation=20
Administration has said all big airlines will meet this week's deadline for=
=20
completing the job. The Senate bill would also authorize $225 million in=20
extended unemployment benefits for airline workers. While some members of=20
Congress say aiding a single employment sector is unfair to workers in=20
other hard-hit industries, a bipartisan group of lawmakers on the=20
conference committee that will determine the scope of the aid urged=20
President Bush Friday to support the worker aid proposal. The airline=20
industry has cut 10,000 jobs since the Iraq war began almost three weeks=20
ago. But one senior Transportation Department official said he could not=20
see the administration supporting this provision or another one offering=20
$375 million to help airports with security costs. There is a $235 million=
=20
airport security provision in the homeland security section of the war=20
spending bill. But the administration has in the past supported extending=20
government help for airlines to meet their high-end liability insurance=20
premiums, which accounts for nearly $1 billion in the Senate plan and has=20
widespread support in Congress even though such a request was not included=
=20
in the House package.


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