[Congressional Record Volume 148, Number 71 (Tuesday, June 4, 2002)]
[Senate]
[Pages S4939-S4941]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




    SUPPLEMENTAL APPROPRIATIONS ACT FOR FISCAL YEAR 2002--Continued


                           Amendment No. 3557

  Mr. BOND. Madam President, when the shocking events of September 11 
hit us, we all realized that major changes had occurred. The 
devastation and the death that was visited by the terrorists were truly 
shocking. But there was collateral damage as well in many areas. We are 
seeing small businesses that have been put out of business. We have 
worked hard to try to help them.
  But, obviously, one of the most severely affected areas of our 
economy--really, the lifeline of our Nation's transportation system--
the airline industry, was severely hurt by this action. Not only did we 
shut down flights for a period of days, which cost the airlines 
literally billions of dollars, their insurance rates skyrocketed and 
put them at risk. And when you put the airline industry at risk, you 
put all of us at risk because ours is a very mobile country that 
depends upon a healthy, competitive airline industry.
  I came to the floor on September 13 to urge my colleagues to take 
immediate action. Well, people in both Houses shared that view, and we 
did act. We adopted critical legislation to ensure that our airlines 
could continue to operate even as their insurance rates skyrocketed. 
This was a successful approach.
  Then we embarked on another approach. We said we would set up a $10 
billion loan guarantee program to provide assistance to airlines that 
were doing well, that were ``taking off,'' so to speak, but whose cash 
shortfall was exacerbated by the shutdown and the slow return of 
airline passengers. That $10 billion loan guarantee program sounded 
like a good idea.
  We should support this amendment that tries to preserve the full 
commitment we made to our airlines and to the traveling American 
public.
  Now, we have a problem, specifically with the ATSB--that fine group 
of Federal servants--that decide what airlines get the money. So far, I 
think there have been seven applications; and they have only granted 
one. Even if all the applications were granted, I understand that $10 
billion would be more than enough to cover them.
  I have had a real problem because we have a fine, growing airline, a 
new airline in Kansas City, called Vanguard Airlines. So far, the ATSB 
has formally denied three loan applications submitted by Vanguard. 
Actually, they have only approved one. That was for America West. We 
are very glad that our colleagues who fly on America West and the 
people served by America West will be helped.
  The intent of this program was to help airlines such as America West 
and, I believe, such as Vanguard. When you look at the facts, Vanguard 
actually stacks up better than America West when you consider the 
necessary criteria. The airline was growing rapidly and consistently 
prior to September 11. The airline is trying to get back on its feet, 
has recently made new hires, is getting back on a growth track. It is 
increasing routes and hiring people. They wanted a private loan package 
that would allow them to purchase more aircraft, more Boeing MD-90s.
  When I talked with one of the officials at ATSB, they said: Well, we 
don't have any collateral. If you don't have collateral, and you are 
going to use the loan to buy an airplane, guess from where the 
collateral is going to come? They are even bringing in equity funding 
that would come in with the loan if it were granted. If we fail to do 
that, the potential ripple effect will not only be on the airline 
industry but

[[Page S4940]]

on the entire Kansas City metropolitan area where Vanguard has become a 
major employer in the area.

  I am reminded of a very old and very troubling definition. A friend 
of mine once said: A banker is a guy who loans you an umbrella and 
takes it back when it rains. If this loan fund were to be made 
available solely on the criteria by which a bank would issue a loan, we 
would not need it. If these airlines are healthy enough to go out and 
get loans--and many of them are--then they do not need the loan 
guarantee package.
  We set up criteria which should be observed, but somehow those 
criteria have resulted in denying everybody except America West a loan.
  I hope we adopt this amendment by the distinguished chairman and 
ranking member of the Appropriations Committee to knock out the 
rescission because we want to make sure airlines that are healthy, that 
have a good record, that have the potential to grow, are not killed in 
their infancy because of the cashflow problems, the insurance problems, 
and the short-term lack of confidence in airline travel that came about 
as a result of September 11.
  I say to our friends who serve on the ATSB, we appropriated this 
money, we made available these loan guarantees for one simple purpose; 
and that is, to loan the money to airlines that could otherwise not 
stay in business and that would not meet bankable loan standards.
  This is extremely important to the airline industry. It is important 
to my constituents in Kansas City. I hope we will support the 
amendment, and I strongly hope that one of these days they will figure 
out how to provide money to airlines that may not have bankable loan 
capabilities but which have the growth and which have the potential to 
get back on their feet after the tragedy of September 11.
  Madam President, I yield the floor.
  The PRESIDING OFFICER. The Senator from Texas.
  Mrs. HUTCHISON. Madam President, I rise to speak in favor of the 
amendment. I had the same amendment already drafted. I am the ranking 
member of the Aviation Subcommittee of the Commerce Committee. I was 
alarmed when I heard what had happened with regard to the fund that we 
set aside to stabilize the aviation industry. So I thank Senator Byrd 
and Senator Stevens for making this accommodation, for offering this 
amendment. And I certainly want to be made a cosponsor of the 
amendment.
  Madam President, I ask unanimous consent to be added as a cosponsor 
of the amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mrs. HUTCHISON. Madam President, our aviation industry lost thousands 
of jobs right after September 11, but it could have been hundreds of 
thousands if we had not come in and stabilized that industry. Because 
of repercussions in other parts of the tourism industry--in the hotel 
industry, the rental car industry--so many other parts of our economy 
that are dependent on tourism would also have fallen. So we did the 
right thing.
  It is essential that Congress keep its commitment. The deadline is 
June 28. And there can be applications. US Airways is said to be 
looking at perhaps making an application. America West already has a 
loan. There may be other airlines. They need to know that when Congress 
passes a law, they have the right to believe that law is going to be 
carried out and deadlines will be met.
  If we revoked that deadline and said, if you have not come in now, we 
are going to take the money away, I think it would be a tragedy. So I 
think this is definitely the right approach.
  It is also essential that the traveling public and the banking 
community know that the airline industry is going to be secured. Today, 
most airports are reporting about 90 percent of the traffic they had at 
this time last year. That is phenomenal after what happened on 
September 11: the cataclysmic event and the impact on our economy. That 
we are back to 90 percent I believe is the result of the airlines, the 
airports, the people of our country supporting our economy, and also 
Congress stabilizing the airlines, and then, secondly, coming in with 
the aviation security that assured the traveling public that everything 
was going to be done to secure these airlines. We are well on the way 
to securing airports and airlines. We have a way to go; there is no 
doubt about that. Those two factors have stabilized the industry.

  We are not out of the woods. June 28 is 3 weeks away. We need to 
allow that time for companies already in the process of making their 
applications. It is a pretty arduous process. We are not just 
guaranteeing loans that don't have any substantiation or any reason to 
believe that they would be able to be repaid, but we are guaranteeing 
loans, as we said we would, for a company that meets the very stringent 
criteria.
  I hope this amendment passes overwhelmingly. I believe it will. I 
certainly appreciate that we have gone forward to put this amendment in 
place. I thank Senator Byrd and Senator Stevens for immediately acting 
when it became known that this was actually going to cut off companies 
that were in the process that could then go into bankruptcy and cause a 
rippling effect throughout the economy.
  We want to support US Air and any other airlines that might want to 
come in that meet the criteria. We want to try to keep our aviation 
industry stable as we go into vacation time, the summer months, so that 
hopefully by September 11, 2002, we will have a good report for the 
people of America that our economy has been stabilized and that the 
aviation and tourism industry are a part of that. This amendment will 
be one more step in that direction.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Virginia.
  Mr. ALLEN. Madam President, I ask unanimous consent to speak for up 
to 5 minutes on the pending amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. ALLEN. Madam President, I rise in support of the amendment. The 
amendment, introduced by Senators Byrd and Stevens, is a logical one 
relating to the aviation loan guarantee language in the emergency 
supplemental appropriations bill. As my colleagues might recollect, 
last year we voted unanimously to extend an immediate cash infusion and 
loan guarantees to airlines struggling as a result of the September 11, 
2001 attacks and the resulting closure of the nationwide aviation 
network. I wish to associate myself with the remarks of Senator 
Hutchison of Texas and Senator Bond of Missouri in their views and 
statements on the history.
  Access to these funds is necessary for many airlines to continue 
operation and vital to the future of our nationwide aviation network.
  My colleagues might recollect that all of our airports were shut down 
for several days, but one in particular, Reagan National Airport, 
stayed closed for an extended period of time. Even today, commercial 
aviation is still getting up to full capacity and general aviation is 
still shut down. I hope that soon will change with some reasonable 
regulations for private or general aviation.
  With the phased reopening over many months of Reagan National 
Airport, there was one airline, US Airways, which was particularly 
adversely affected. US Airways intends to work through all of the 
requirements they have with labor and management and put forward an 
application for the loan guarantee program in an effort to avoid 
bankruptcy.
  The proposed language, in limiting the total funds available and 
eliminating any more loans for 2002, would be truly detrimental to the 
survival of this airline and very possibly other major carriers. The 
language in the bill, in this present form, represents a broken 
promise.
  There was a time frame for which airlines, if they wanted to avail 
themselves of this assistance, would be able to make that effort. It is 
not easy to go through the whole loan guarantee process. To change the 
deadline at this point would clearly be a breach of trust and very 
unwise. When we passed the stabilization bill, the airlines were given 
until June 28, 2002 to apply for these loans. The funds were to be 
available through the end of the year.
  I applaud the work of my colleagues in addressing this proposed 
injustice and appreciate the amendment offered by the chairman, Senator 
Byrd, and Senator Stevens. I urge all Senators to vote for the 
amendment.
  The amendment will not only correct an error, but will also provide 
the opportunity for our nation's air carriers,

[[Page S4941]]

as they try to address the aviation security quandary in a much better 
way than is currently being done, to protect the jobs of tens of 
thousands of hard-working Americans. We are also trying to keep 
competition in aviation and trying to get Americans and America's 
airways flying again.
  I thank my colleagues and urge their support for this very important 
amendment for jobs, for the commercial aviation industry, and for the 
traveling public. This amendment also puts the Senate on record as 
keeping our word to this very important part of our economy.
  Thank you and I yield the floor.
  Ms. SNOWE. Mr. President, I rise in support of the Byrd-Stevens 
amendment that would protect the funding for the airline financial 
support program established by the Air Transportation Safety and System 
Stabilization Act of 2001.
  Congress and the President moved swiftly after September 11, 2001 
terrorist attacks to provide the airline industry with critical 
financial support to avoid a crisis in our national transportation 
network and in our economy.
  The Air Transportation Safety and System Stabilization Act signed 
into law on September 22, 2001 was designed to give airlines access to 
up to $15 billion in assistance. It included $5 billion for direct aid 
to pay for industry losses associated with the results of the World 
Trade Center and Pentagon attacks. It also included $10 billion for 
loan guarantees.
  The Fiscal Year 2002 supplemental appropriations bill which we are 
debating this week would have reduced the size of the loan guarantee 
provision to $4 billion. The Byrd-Stevens amendment before the Senate 
for consideration this afternoon would strike the provision in the 
supplemental and restore the program to the full $10 billion level.
  I voted for the legislation that established this important financial 
assistance program in order to ensure the financial viability of the 
airline industry--which generates 3 percent of the gross domestic a 
product, almost $273 billion. There is no question as to the 
significance of airline service not only to our quality of life, but 
also our national economy. In my home state of Maine, over 56,000 jobs, 
$1.29 billion in payroll, and $3.73 billion in sales are tied to the 
availability of scheduled commercial air service.
  In the wake of the attacks of September 11, thousands of airline 
employees lost their jobs and remain laid-off. Most major airlines 
continue to operate more limited schedules than before September 11. 
United Airlines and American Airlines both announced layoffs of 20,000 
personnel and schedule reductions of about 20 percent.
  The airlines have begun to re-hire some employees and restore 
service, but we are still not where we were prior to September 11. 
Approximately 750 to 1,000 aircraft that were in operation before the 
terrorist attacks are out of service to this day.
  According to the Air Transport Association, the airlines suffered 
losses of about $1.4 billion during the aviation system lockdown that 
followed the tragic events of September 11. And they have continued to 
lose money. Before September 11, the airline industry was expected to 
lose $1 to $2 billion in 2001. In the aftermath of September 11, the 
losses exceeded $7 billion, and could have been even worse if not for 
the financial assistance package passed by Congress and signed by the 
President.
  US Airways, the only commercial carrier to serve all six of Maine's 
commercial airports, warns that without the loan guarantees, it may be 
forced into bankruptcy. US Airways is a major carrier providing service 
along the Northeast corridor, and with some hub operations based at 
Ronald Reagan Washington National Airport, suffered significantly as a 
result of increased security requirements and reduced service levels to 
Washington.
  I think the numbers speak for themselves. I believe it is critical 
that we restore this funding, and I urge my colleagues to join in a 
strong show of support of this amendment.
  Mr. KENNEDY. Mr. President, I wish to thank our distinguished 
chairman of the Appropriations Committee, Senator Byrd, and Senator 
Stevens for this amendment, which is so very important to tens of 
thousands of airline industry employees across the country.
  This amendment will restore the integrity of the loan guarantee fund 
we established in the Air Transportation and System Stabilization Act 
of 2001, and ensure that airlines suffering from the continued effects 
of September 11 will be able to remain strong and competitive.
  I greatly appreciate the efforts of Senator Byrd and Stevens to put 
the U.S. Senate on record with this issue as the fiscal year 2002 
emergency supplemental appropriations bill moves to conference with the 
House of Representatives. Their leadership is so very important, 
because the House bill has a provision that would cripple the loan 
guarantee fund, a provision that may well bankrupt more than one major 
U.S. air carrier.
  I also want to recognize the thousands of airline industry workers 
who made their voices heard on this issue over the Memorial Day recess. 
These workers united in a most impressive way to lobby on behalf of 
their companies. I found their commitment inspiring, and I want to 
congratulate them on this great victory they have won on the Senate 
floor today.
  Mrs. CARNAHAN. Mr. President, I support the Byrd-Stevens amendment, 
which will preserve the loan guarantee program that we established last 
year.
  We acted swiftly and in a bipartisan fashion to respond to the 
September 11 attacks.
  We authorized the use of force, we appropriated funds to start 
rebuilding, we bolstered security efforts, and we took important action 
to assist the aviation industry.
  As part of our initiative to promote the ongoing stability of the 
aviation industry, we created the Air Transportation Stabilization 
Board, ATSB, to ensure that airlines would continue to have access to 
capital.
  Now, after the ATSB has approved just one airline's application, the 
bill before us is seeking to impose new limits on this extremely 
important program.
  I think this is unwise, and I am supporting this amendment to strike 
these new limits from the bill.
  When we enacted the airline stabilization bill last year we 
essentially made a promise of assistance to struggling airlines.
  Limiting this program now would be unfair to airlines that are 
counting on it to help them in their efforts to regain sound financial 
footing.
  One airline that is particularly in need of assistance is Kansas 
City-based Vanguard Airlines.
  As a member of the Senate Commerce Committee, I understand how 
important low-fare competitors are in our aviation system.
  As a low-fare airline operating out of Kansas City, Vanguard 
contributes substantially to keeping airfares competitive in Kansas 
City and throughout the Midwest.
  Not only did September 11 have a devastating financial impact on 
Vanguard, but it severely limited the company's ability to obtain 
private financing as well.
  Vanguard's approximately 1,000 employees have been fighting 
diligently to improve the company's financial standing.
  But securing additional capital is absolutely essential to the 
company's long-term health.
  I have been extremely frustrated and disappointed by the ATSB's 
reluctance to approve Vanguard's application.
  I am committed to ensuring that the loan guarantee program is 
maintained in its current form.
  Moreover, I plan to continue working with Vanguard as it re-submits 
its application in an effort to achieve a positive outcome.

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