[Congressional Record Volume 144, Number 129 (Thursday, September 24, 1998)]
[Senate]
[Pages S10879-S10881]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 WENDELL H. FORD NATIONAL AIR TRANSPORTATION SYSTEM IMPROVEMENT ACT OF 
                                  1998

  The Senate continued with the consideration of the bill.


                           Amendment No. 3628

  (Purpose: To amend the Internal Revenue Code of 1986 to provide an 
   investment credit to promote the availability of jet aircraft to 
  underserved communities, to reduce the passenger tax rate on rural 
           domestic flight segments, and for other purposes)

  Mr. DORGAN. Mr. President, I send an amendment to the desk and ask 
for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report the amendment.
  The bill clerk read as follows:

       The Senator from North Dakota [Mr. Dorgan] proposes an 
     amendment numbered 3628.

  Mr. DORGAN. Mr. President, I ask unanimous consent that reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The amendment is printed in today's Record under ``Amendments 
Submitted.'')
  Mr. DORGAN. I have indicated that I will offer two amendments to this 
piece of legislation. This would be the first. I intend, however, not 
to seek a vote on this amendment. I intend to ask unanimous consent 
that it be withdrawn. I am offering it for this reason. This 
legislation provides tax credits under certain circumstances. I 
recognize that it would cause a blue slip on this bill because this tax 
legislation must originate in the House of Representatives. I do not 
intend or want to cause that kind of problem for this bill, but I 
believe very strongly that this amendment is part of the solution to a 
very large problem we have, and I introduce it today for the purpose of 
describing to my colleagues an approach that I would intend to offer to 
some future tax legislation that will be considered by the Senate and 
the House.
  Mr. President, the chairman of the subcommittee--excuse me, chairman 
of the full committee--I have demoted him--the chairman of the full 
committee, Senator McCain, and the ranking member, Senator Ford, have 
brought a bill to the floor of the Senate that is very important.
  Mr. FORD. Mr. President, will the Senator yield for just one moment.
  Mr. DORGAN. I will be happy to yield.
  Mr. FORD. We have worked out Senator Reed's amendment. I know the 
Senator does not want to lose his train of thought here, but Senator 
Reed has an important engagement, and I know Senator Dorgan does, too. 
This one will take about 2 minutes.
  I ask unanimous consent that this amendment be set aside and that we 
recognize Senator Reed, and that at the end of Senator Reed's amendment 
we return, then, to Senator Dorgan's amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The distinguished Senator from Rhode Island is recognized.


                           Amendment No. 3629

 (Purpose: To provide for the expenditure of certain unobligated funds 
               for noise abatement discretionary grants)

  Mr. REED. I thank the Chair.
  First, let me thank Senator Dorgan for his graciousness in allowing 
me to present my amendment and also thank Senator McCain and Senator 
Ford for their understanding and cooperation.
  I have an amendment at the desk which I call up now.
  The PRESIDING OFFICER. The clerk will report the amendment.
  The bill clerk read as follows:

       The Senator from Rhode Island [Mr. Reed] proposes an 
     amendment numbered 3629.

  Mr. REED. Mr. President, I ask unanimous consent that reading of the 
amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

       At the appropriate place in title II, insert the following:

     SEC. 2  . DISCRETIONARY GRANTS.

       Notwithstanding any limitation on the amount of funds that 
     may be expended for grants for noise abatement, if any funds 
     made available under section 48103 of title 49, United States 
     Code, remain available at the end of the fiscal year for 
     which those funds were made available, and are not allocated 
     under section 47115 of that title, or under any other 
     provision relating to the awarding of discretionary grants 
     from unobligated funds made available under section 48103 of 
     that title, the Secretary of Transportation may use those 
     funds to make discretionary grants for noise abatement 
     activities.

  Mr. REED. I thank the Chair.
  Mr. President, my amendment is a very straightforward attempt to find 
additional resources to help neighborhoods that surround airports and 
are confronting the problem of airport noise. My State of Rhode Island 
is home to one of the fastest growing airports in the country, T.F. 
Green Airport. Indeed, over the past two years,

[[Page S10880]]

T.F. Green has seen roughly an annual increase of 55 percent in 
passenger traffic. This is compared to a national average increase of 4 
percent a year. So you can well appreciate that the impact of 
additional flights coming in has caused severe noise problems around 
the airport.
  This has been a source of great strength, the growth of T.F. Green, 
in terms of our economy; it has brought visitors; it has become a 
gateway to New England. It has created jobs. All of these are extremely 
positive. But it has also generated increased noise with increased 
numbers of flights. The Rhode Island Airport Corporation, the city of 
Warwick, and community groups are working together. We have been 
successful in securing grants from the FAA for noise abatement. But I 
think we have to do much more to ensure that all the homes that need 
soundproofing with all of the techniques that we can use to mitigate 
and minimize noise are effectively employed to assist the people of 
Rhode Island.
  I am very pleased with what has already been done in this 
legislation. Both Senator McCain and Senator Ford have taken a very 
strong, positive step to ensure that we are sensitive to the noise 
problem at airports. This legislation includes a set-aside for noise 
abatement of approximately 35 percent rather than the 31 percent in the 
bill that has been passed by the other body. This is a very, very 
positive development, but I think we can do more. I would also be very 
supportive of Senator McCain and Senator Ford's efforts to maintain 
that 35 percent set-aside.
  What my amendment does is simply lift the existing cap on the total 
amount of funds that the FAA may spend on noise abatement when the FAA 
distributes unexpended funds at the end of a fiscal year. This, we 
hope, would allow for additional resources to be devoted towards noise 
abatement. It would be consistent with and within the confines and 
framework of the existing appropriations bills. It is a modest, but I 
think very important step forward to help address the problem of noise 
around airports.
  I, indeed, am very pleased that Senator McCain and Senator Ford have 
taken such a strong step in this bill to protect airport neighborhoods 
from the increased level of noise.
  With this, I urge passage of the amendment.
  Mr. McCAIN. Mr. President, I urge adoption of the amendment.
  The PRESIDING OFFICER (Mr. Kyl). If there is no further debate, 
without objection, the amendment is agreed to.
  The Amendment (No. 3629) was agreed to.
  Mr. McCAIN. Mr. President, I move to reconsider the vote.
  Mr. FORD. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Mr. FORD. I thank the Senator, and I particularly thank Senator 
Dorgan for allowing us to move this amendment along.


                           Amendment No. 3628

  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. DORGAN. Mr. President, as I was saying, the amendment that I have 
offered to the FAA bill is an amendment that is very important to the 
country and especially to my region of the country. Just before I 
yielded the floor, I was talking about the leadership of Senator McCain 
and Senator Ford. I think they have both done a wonderful job with this 
piece of legislation. It is an important piece of legislation for the 
country's sake, and it now appears that we will get this through the 
Senate and probably be completed with the legislation today, and that 
will be in no small measure due to their tenacity and their skill at 
crafting and moving this piece of legislation.
  Let me describe what I intend to do with this amendment, and I will 
not talk about the second amendment which I intend to offer later today 
and hope that that will be approved by the Senate.
  In late August, Northwest Airlines had a pilot strike and therefore a 
shutdown of their airline service. That might not have meant much to 
some. In some airports, I assume Northwest was one of a number of 
carriers that was serving certain airports and serving passengers. But 
in North Dakota, the State which I represent, Northwest Airlines was 
the only airline providing jet service to my State. That is a very 
different picture than the last time we had an airline strike, which 
was over 25 years ago.
  Nearly a quarter of a century ago when Northwest had another strike 
and a shutdown prior to deregulation of the airlines, we had five 
different airline companies flying jets into the State of North 
Dakota--five different jet carriers in North Dakota. And then we had 
folks in Congress saying, you know what we really need to do to foster 
competition? We need to deregulate the airline industry. And so we 
deregulated the airline industry. I wasn't here at the time. But we 
deregulated them and we went from five jet carriers in North Dakota to 
one.
  So I am thinking to myself, all those folks who are choking on the 
word ``competition,'' we need to deregulate so we stimulate more 
competition, where are they now so they can really choke on the word 
``competition''? We have much less competition in airlines today, much 
less competition with a couple of exceptions.
  If you live in Chicago and you are flying to New York or Los Angeles, 
God bless you, because you are going to have a lot of carriers to 
choose from and you are going to find very inexpensive ticket prices, 
and you can make a choice of carriers and ticket prices that are very 
attractive to you. You live in a city with millions and millions of 
people and you want to fly to another city with millions and millions 
of people. Guess what. This is not an awfully big deal for you; more 
choices and low fares. But you get beyond those cities and ask how has 
this airline deregulation affected other Americans, and what you will 
find is less selection, fewer choices, and higher prices.

  North Dakota is just one example, but the most striking example--one 
airline with jet service. And on that night at midnight, when the 
strike was called and the airline shut down, just like that, an entire 
State lost all of its jet service.
  What does that mean to a State? It begins to choke the economy very 
quickly. People can't move in and out. North Dakota is a sparsely 
populated State, 640,000 people. Up in the northern tier, we are 10 
times the size of Massachusetts in land mass--big State, 640,000 
people, and one airline serving with jets.
  Now, I happen to think Northwest is a good carrier. I believe the 
same about all the major carriers. Most of them are well-run, good 
companies; they went through tough times, now are doing better, and I 
admire them.
  What I do not admire is what they have done--retreating into regional 
monopolies in this country, retreating into hub and spoke so that they 
control the hub.
  You go to any big area in this country and take a look at what they 
do. The major carriers have retreated so that they now, one company, 
will control 60 or 70 or 80 percent of all the gates at that airport. 
They control that hub. Do you think anybody is going to come in and 
take them on, anybody is going to come in and compete aggressively and 
say, ``Boy, this is a free market; we are going to go into your hub and 
we are going to compete against you?'' This is not happening. They cut 
the pie, created the slices, retreated into their little slices, and 
there is no competition. We now have regional monopolies without any 
regulation.

  What sense does that make, to have monopolies without regulation? The 
minute I say ``regulation,'' we have people here having apoplectic 
seizures on the floor of the Senate. Oh, Lord, we should talk about 
regulation? I am not standing here today talking about regulation 
because I want to reregulate the airlines. All I want to do is see if 
we can provide some sort of industrial-strength vitamin B-12 shot right 
in the rump of those airlines to see if we cannot get them competing 
again. How do we do that? We do it by creating the conditions that 
require competition. This amendment is one.
  Let us assume there is somebody out there who says, ``You know what I 
would like to do, I would like to run an airline. I have the money, I 
have the energy, I have the time, I have the skill. I want to create a 
regional airline, and I want to fly in an area where

[[Page S10881]]

nobody else is flying a jet, and I want to haul people to a major 
hub.''
  They create their airline and fly to a major hub and they drop 
somebody off. And guess what. That somebody in most cases is going 
beyond that hub.
  Let me give an example, of Bismarck going to Denver, which is a major 
hub. For 35 years, we had jet service with Frontier Airlines and then 
Continental, from Bismarck, ND, to Denver, a major hub. Now we do not. 
So a new company comes in and says, ``I will connect Bismarck to 
Denver, a major hub.'' But about 70 percent of the people leaving 
Bismarck are not going to just Denver, they are going beyond, to Los 
Angeles, San Francisco, Phoenix--you name it.
  So this airline carrier starts up and hauls the Bismarck passengers 
to Denver and opens the door of the airplane, and they disembark on a 
sunny Denver day and discover they cannot go anywhere else, because if 
they walk over to United or another carrier, they don't have the 
opportunity to get a joint fare ticket. They charge them an arm and a 
leg. In fact, they even have trouble getting their baggage moved from 
one airline to another, because the big airlines do not want 
competition. They have their hub, they don't want anybody messing with 
it, and they certainly do not want these upstart regional airlines 
springing up, hauling people into their hub.
  So what you have is a circumstance where there is deregulation of the 
airlines, and the major carriers have merged. There has been all this 
romance going on; they decided they like each other a lot. Pretty soon 
they are going to get married. They merge up, two airlines become one, 
and now we have five or six large airlines in this country because they 
like each other so much, and they have retreated into these regional 
monopolies because they don't want to compete with each other. They 
create their own hub and they create their own spokes and they say to 
those who want to start up, ``We are sorry but we are not interested.''
  Having said all that, and that is a mouthful, and having said I 
admire the majors--most of them are good carriers and they have good 
management and they do what they do in their interest--there is their 
interest and then there is a parallel and sometimes not parallel public 
interest. In some cases it is not a parallel public interest, as the 
case where we have areas that used to be served and are now not served 
but could be served by a new carrier if only the majors would cooperate 
with those new carriers.
  In order to encourage new startup regional jet service, I am 
proposing a 10 percent investment tax credit for regional jet 
purchases. That is, those startup companies that want to begin regional 
jet service to fly these new regional jets between certain cities and 
hubs that are not now served with regional jet service, we would say to 
them that we will help with a 10 percent investment tax credit on the 
purchase or lease of those regional jets. We will help because we want 
to provide incentives for the establishment of regional jet service 
once again in our country.
  My legislation would require that they serve those markets for a 
minimum of 5 years. We have defined exactly what those underserved 
markets are. It is targeted, it makes good sense, and will stimulate 
investment in an activity that this country very much needs and an 
activity that the so-called free market now does not accommodate, 
because the free market is clogged. There is kind of an airline 
cholesterol here that clogs up the arteries, and they say, ``This is 
the way we work, these are our hubs, these are our spokes, and you 
cannot mess with them.''
  My legislation simply says we would like to encourage areas that no 
longer have jet service but could support it. We would like to 
encourage companies that decide they want to come in and serve there to 
be able to purchase the regional jets and be able to initiate that kind 
of service.

  My legislation has a second provision which reduces the airline 
ticket tax for certain qualified flights in rural America. This 
proposal also has a revenue offset so it would not be a net loser for 
the Federal budget.
  Having described all that, the second amendment I am going to offer 
also addresses this in a different way. My hope is we could work to get 
that accepted. We have been working hard with a number of Members of 
the Senate to see if we cannot get that accepted.
  I just want to make two more points.
  We are not in a situation in rural areas of this country where we can 
just sit back and say what is going to happen to us is going to happen 
to us and there is nothing we can do about it. There are some, I 
suppose, who sit around and wring their hands and gnash their teeth and 
fret and sweat and say, ``I really cannot alter things very much, this 
is the way it is.''
  The way it is is not satisfactory to the people of my State. It is 
not satisfactory to have only one jet carrier serving our entire State. 
Our State's transportation services and airline service, especially jet 
airline service, is an essential transportation service. It ought not 
be held hostage by labor problems or other problems of one jet carrier. 
We must have competition. If all of those in this Chamber who mean what 
they say when they talk about competition will weigh in here and say, 
``Let's stand for competition, let's stand for the free market, let's 
try to help new starts, let's breed opportunities for broader based 
economic ownership and more competition in the airline industry,'' then 
I think we will have done something important and useful and good for 
States like mine and for many other rural States in this country.
  Mr. President, as I indicated when I started, I will offer my second 
amendment later this afternoon, which I hope will be accepted, because 
the amendment I have just described and offered has a blue slip 
attached to it in the sense it would be objected to, because a revenue 
measure must begin in the Ways and Means Committee of the House of 
Representatives--and I used to serve in the House and used to serve on 
the Ways and Means Committee, and we were fierce in our determination 
to make certain that committee always had original jurisdiction on 
those issues. I am willing to say I understand that. But I wanted my 
colleagues to be able to review this amendment in the Record, because 
if and when there is a piece of legislation dealing with tax issues 
later this year, it is my intention to see that this becomes part of 
that discussion.
  With that, I ask unanimous consent my amendment be withdrawn.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment (No. 3628) was withdrawn.
  Mr. DORGAN. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. DORGAN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DORGAN. I ask unanimous consent to speak for 10 minutes as in 
morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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