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House stimulus draft reflects Democrats’ views on airline aid

Like their Senate colleagues, House Democrats are pushing for tight controls on how government aid can be used by airlines struggling in the pandemic

An American Airlines jet at a terminal at Ronald Reagan Washington National Airport in Washington this month.
An American Airlines jet at a terminal at Ronald Reagan Washington National Airport in Washington this month. (CQ Roll Call)

The House and Senate take fundamentally different approaches to helping airlines reeling from the coronavirus pandemic, and that difference may be a sticking point to an agreement.

At issue is whether to offer airlines cash grants or simply loans to help them navigate the turbulence caused by the pandemic. 

An early draft summary of the House bill obtained by CQ Roll Call Monday would provide $40 billion in grants to airlines and ground support contractors and up to $21 billion in loans to airlines. 

By contrast, the legislative vehicle for the Senate bill (HR 748) provided $58 billion in loans and loan guarantees to airlines. Both bills are subject to change; provisions of the Senate measure including those affecting airlines are the subject of intense debate between Democrats and Republicans. The House draft could change before its introduction.

But even before the House bill was formally introduced, House Transportation and Infrastructure ranking Republican Sam Graves, R-Mo., and Aviation Subcommittee ranking member Garret Graves, R-La., were signalling their disdain, saying House Speaker Nancy Pelosi “has put forward a bill that is full of provisions that have nothing to do with responding to the COVID-19 crisis and helping the American people.”

Among those provisions: requiring airlines to offset carbon emissions by 2025, requiring labor to have a seat on airlines’ board of directors and rewriting bankruptcy codes to help labor — all provisions that had nothing to do with the disease, they argued.

[Senators fight over last-minute adds to coronavirus aid bill]

The Senate bill, which has yet to muster the 60 votes necessary to advance, has outraged airlines, who, led by industry group Airlines for America, originally requested $25 billion in zero-interest loans and loan guarantees for passenger airlines, with an additional $4 billion in equivalent loans and loan guarantees for cargo airlines, as well as $25 billion in grants for passenger airlines and $4 billion in grants for cargo airlines

Airlines argue they can’t survive without an immediate cash infusion. On Saturday, the leaders of 10 airlines, led by Airlines for America, sent a letter to congressional leadership saying they needed at least $29 billion in “worker payroll protection grants” in order to avoid furloughs. 

Workers threatened

“Unless worker payroll protection grants are passed immediately, many of us will be forced to take draconian measures such as furloughs,” they wrote.

Unions, meanwhile, oppose the Senate bill because they believe the aid would go to the airlines without benefits for front-line workers, and because the Senate proposal did not include certain protections for collective bargaining agreements, including provisions to prevent airlines from taking advantage of bankruptcy to abrogate those agreements. 

The Senate bill also didn’t single out contractors — a move that caused an outcry among labor groups, who argue that front-line contractors, including airport wheelchair attendants and cleaning staff, are the most susceptible to being laid off and being infected by the virus.

Democrats, meanwhile, said the loan provisions didn’t come with enough restrictions to keep airlines from helping out shareholders and executives.

Among their requirements: barring stock buybacks, limiting executive pay beyond the two years specified in the bill, guaranteeing labor protections and requiring consumer protections.

Some Republicans, meanwhile, had their own concerns about the Senate bill.

Sens. Ted Cruz, R-Texas, and Mike Lee, R-Utah, both tweeted their objections last weekend to any sort of specific carve out for Boeing or GE Aviation. Boeing, which announced Monday it would be suspending its production operations near Seattle beginning March 25 for at least 14 days, has requested $60 billion in additional liquidity. GE Aviation, meanwhile, announced Monday plans to cut 10 percent of its workforce. 

“… The relief package should not include bailouts for specific, government-favored businesses,” Lee tweeted. “Americans are in this together.  Why would we create a special program for two companies?

Cruz, meanwhile, tweeted that such specific bailouts would be “WRONG.”

“Millions are losing jobs; we don’t need bailouts or corporate welfare — those companies should participate in the same liquidity programs as everyone else,” he tweeted. But Treasury Secretary Steven Mnuchin insisted Monday that “there are no bailouts.”

“This is not about bailing anybody out,” he said on Fox Business Monday morning. “There is a special provision that we are in the process of negotiating for airlines. …When the economy opens up we need to be able to have these airlines, so there are very specific provisions to airlines and those are still being negotiated as we speak.”

House bill

The House bill draft matched the Senate in how it handled airports and Amtrak: Both measures include more than $1 billion to Amtrak and $10 billion to airports. 

The Senate aid to Amtrak and airports was tucked in a supplemental spending bill that the Senate sought to bundle with its latest stimulus measure.

The House draft would also provide $100 million in grants to maintain a minimum level of scheduled air service to small communities; $3 million for an Office of Airline Industry Financial Oversight; and, in a move likely to irk Senate Republicans wary of turning the bill into an iteration of the “Green New Deal,” $1 billion to eliminate high-polluting aircraft and $100 million in research into sustainable aviation fuels.

Finally, the House included $25 billion for grants to transit agencies to ensure continued operation of transit services. Transit has taken a hit caused by a plummet in ridership. The Senate bill included $20 billion for transit. 

The House bill also singled out the Transportation Security Administration, providing hazard duty pay for TSA officers who have “frequent, unavoidable contact with the public,” a well as for federal workers who provide direct patient care and emergency services to individuals who have contracted coronavirus.

And it includes $100 million to prevent, prepare for and respond to the coronavirus, including $54 million for extra cleaning at airport security checkpoints, $26 million for overtime and travel costs for TSA officers, and $20 million for the purchase of explosive trace detection swabs.