Airlines’ Financial Bailout Lands With a Thud at White House

The White House on Wednesday stiffened its opposition to a $3-billion-plus aid package for the airline industry that congressional leaders are pushing, potentially setting up a Republican family feud.

While President Bush is open to some additional federal assistance for airlines, White House spokesman Ari Fleischer called the rescue packages approved by House and Senate committees earlier this week “excessive.”

His comments could put the administration on a collision course with some of the president’s most loyal supporters on Capitol Hill, including House Speaker J. Dennis Hastert (R-Ill.).

The issue also underscored the conflict that can occur when political ideology clashes with constituent concerns.

Administration officials contend the financial problems facing airlines stem largely from fundamental flaws in the industry’s operations. But a number of lawmakers represent districts where thousands of jobs have been affected by the industry’s money woes, exacerbated first by the Sept. 11 terrorist attacks and more recently by public anxiety about flying during wartime.

Hastert’s district, for example, is home to about 30,000 United Airlines employees. The airline aid also has been strongly supported by Sen. Norm Coleman (R-Minn.), whose state is home to Northwest Airlines, which has cut back flights and announced layoffs.

As a result, key members of Congress -- Democrats and Republicans -- said they expect much of the airline aid to remain in the war-funding measure moving through Congress, likely to total $78 billion to $80 billion.

“The Congress is going to speak pretty loudly,” Senate Majority Leader Bill Frist (R-Tenn.) said Wednesday, predicting the Senate would pass a $3.5-billion aid package for airlines, airports and laid-off airline workers.

The House measure would provide $3.2 billion in aid.

“There are parochial concerns” about the plight of the airlines, Fleischer acknowledged. “Different members of Congress from both parties represent important constituencies that are involved in this.”

A House GOP leadership aide predicted the White House ultimately would temper its criticism. “I’m sure they’ll sing the bill’s praises when they sign it.”

Still, a letter to lawmakers from the White House budget office said, “The industry is undergoing a period of fundamental restructuring to align costs and capacity to the demands of the marketplace, and excessive, generalized assistance would only delay and disrupt these important and inevitable changes.”

Don Kettl, a University of Wisconsin political scientist, said the “administration clearly is worried about writing a blank check that will be cashed repeatedly.”

The prospect of a tiff between the White House and GOP leaders over the aid issue comes as the administration has encountered trouble moving parts of Bush’s domestic agenda through Congress, even though it is under Republican control. Until now, moderate Republicans have posed the greatest challenge, thwarting advancement of the president’s $725-billion tax cut and his efforts to open up Alaska’s Arctic National Wildlife Refuge to oil drilling.

The new aid for airlines would come on top of a $15-billion rescue package approved shortly after the Sept. 11 attacks.

Both the Senate and House proposals would relieve the airlines of some of the costs of post-Sept. 11 security measures that Congress imposed, such as fortifying cockpit doors. The Senate measure includes $225 million for a 26-week extension in benefits for laid-off airline workers and $375 million to help airports pay for increased security.

Both measures also would cap the salaries of airline executives at 2002 levels, if airlines receive aid.

Sen. Trent Lott (R-Miss.), chairman of the Senate aviation subcommittee, said he would like to see the amount of aid reduced -- perhaps by about $400 million to $500 million -- once House-Senate negotiators meet to reconcile differences in their war-funding bills.

But Lott also defended the airline aid. “This is an important part of our economy,” he said. While some of the industry’s problems have been caused by “bad management decisions,” Lott said, they’ve also been hurt by “events beyond their control.”

Political analysts said they expect the administration to agree to substantial aid.

“The major airlines are too big to fail,” said Eric Uslaner, a University of Maryland political scientist. “And since almost all of them are in trouble, the administration simply can’t put the blame on bad management alone.”

Commerce Secretary Don Evans issued a statement saying that the amounts provided by the House and Senate committees came as a surprise. But, Evans said, the administration will work with Congress to “ensure that the airlines receive more reasonable assistance.”