Washington Wire: Bush Threatens Veto of FAA Reauthorization - Business Travel News

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Washington Wire: Bush Threatens Veto of FAA Reauthorization

July 09, 2007 - 12:00 AM ET

By Patty Donmoyer

The Bush administration is threatening to veto a four-year, $66 billion Federal Aviation Administration reauthorization measure after House Democrats added language that would reopen negotiations between the agency and air traffic controllers, still angry over having a contract imposed on them last year. The House measure, approved 53-16 by the Transportation and Infrastructure Committee, would send FAA and the National Air Traffic Controllers Association to binding arbitration to settle a dispute over wages and benefits. Air traffic controllers are not legally permitted to strike. FAA last year imposed a contract on the air traffic controllers after the two sides failed to reach an accord, taking advantage of a 1996 law that allows it to do so if Congress doesn't intervene within 60 days of a final report being submitted to the legislature. The then-Republican-controlled Congress didn't act, leaving Democrats fuming. House aviation subcommittee chairman Rep. Jerry Costello (D-Ill.) faulted the law for failing to promote good-faith negotiations and said it "clearly benefits one side—the FAA." Fourteen Republicans, including Rep. Don Young (R-Alaska), the panel's former chairman, joined Democrats in voting for an amendment that would enlist a mediator. Department of Transportation Secretary Mary Peters reacted swiftly with the veto threat on behalf of the White House. "The union is now turning to Congress in an attempt to invalidate an almost year-old contract that saves the American taxpayer more than $1.9 billion over a five-year period, supports investments in new air traffic equipment and provides the flexibility needed to manage record demand for air travel," Peters said. The measure first must be approved by the full House this month and ultimately be reconciled with legislation approved in May by the Senate Transportation Committee that doesn't contain the contract language. The broader legislation would authorize $50.2 billion for FAA operations, facilities and equipment and $15.8 billion to modernize the nation's air traffic control system via the Airport Improvement Program through 2011. The House measure seeks an increase in jet fuel taxes to 30.7 cents per gallon and doesn't include fees proposed by President George W. Bush that would apply to private aviation. The Senate measure imposes a new $25 per-flight surcharge.

Passport Surge Surprises State Department
The State Department admitted it was ill-prepared to handle the demand for passports ahead of new regulations, since temporarily relaxed, requiring them for travel between the United States and neighboring countries. "The increase in demand was sharper and more compressed than we expected,'' Maura Harty, assistant secretary of state for consular affairs, told a Senate committee June 19. "Receipts far exceeded our ability to keep pace with them in our traditional timeframe.'' The new travel requirements have created a backlog of 3 million applications and waiting times as long as 12 weeks. The State Department had projected it would receive 16.2 million passport applications, a total already exceeded by 1.5 million with three months left before the end of the government's fiscal year. The State Department said it has taken "extraordinary measures" to reduce processing time to six weeks by year-end.

White House Opposes Broader Terrorism Insurance
The White House is opposing legislation that would subsidize insurers that cover airlines against terrorist acts for 10 years. The current program requires the government to cover 85 percent of losses attributable to a conventional attack after insurers pay deductibles equal to 20 percent of their annual commercial insurance premiums. The new proposal would require insurers to offer policies covering nuclear and chemical attacks in order to qualify for the subsidy. Insurers would have to pay a deductible of 7.5 percent of their premiums if there is an event. The administration said the subsidy should be phased out sooner and raised concerns about wording. "In Treasury's view, from both a market and economic perspective, it would be better to have no TRIA than a bad TRIA,'' David Nason, the U.S. Treasury Department's assistant secretary for financial institutions, told a House financial services subcommittee on June 21. House Financial Services Committee chairman Rep. Barney Frank (D-Mass.) introduced the legislation last month. The subsidy was created after airlines and other companies found it difficult to purchase insurance against terrorist attacks after the Sept. 11 attacks. The program was intended to be temporary.
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