Bush’s $765 Million Airport Cut Rejected by U.S. Senate Panel

Tuesday, July 18, 2006
Bush’s $765 Million Airport Cut Rejected by U.S. Senate Panel
Bloomberg News

A U.S. Senate panel rejected a proposed George W. Bush administration budget cut of $765 million for U.S. airports, instead adding an additional $5.5 million for construction projects at the nation’s airstrips. Airport aid would be $3.52 billion for the year beginning Oct. 1, under legislation the transportation panel of the Senate Appropriations Committee approved today in Washington. Bush proposed a 22 percent cut to $2.75 billion for airport projects.

Airports are very grateful that the Congress has rejected the draconian cuts proposed by the administration,” said Todd Hauptli, senior vice president of the Airport Legislative Alliance, a lobbying group based in Alexandria, Virginia. The group represents airports, including Atlanta’s Hartsfield, Chicago’s O’Hare and Los Angeles International Airport.

Bush for the second-straight year is failing to achieve his objective of cutting airport grants to hold down the deficit and free up money for other priorities such as the Department of Homeland Security. Last year he proposed cutting airport grants by 14 percent, and Congress instead boosted aid by 1.4 percent.

The House on June 14 rejected Bush’s proposed cut, approving $3.7 billion for airports, a 5 percent increase over the current year. The money was included in a broader $67.8 billion bill to fund transportation projects, housing programs and the U.S. Treasury.

July 20 Vote

The Senate’s airport funding is contained in its $69 billion version of the House-passed bill. The full Senate Appropriations Committee is scheduled to vote on the legislation July 20.

Airports use the money to build runways, resurface taxiways and other capital projects. The federal government collects the funds from taxes on airline tickets, jet fuel and other aviation items, then distributes the money to airports based on the number of passengers they handle and their construction needs.

A funding cut might have meant fewer airport capital projects or changes in how grants are awarded, or airports might have had to look for new funding sources, said Jessica Soltz Rudd of Fitch Ratings in San Francisco.

Grants are an important piece of the puzzle in terms of the funding stream of capital projects for airports,” said Rudd, a senior director in Fitch’s transportation group.

The Senate must then approve the bill, send it to a House- Senate conference committee for approval and then to Bush for his signature before the legislation becomes law.

Amtrak, the U.S. passenger railroad, would get a $1.4 billion subsidy next year under the Senate bill. The House version set aside $1.1 billion for Amtrak, which has a $1.3 billion subsidy in the current fiscal year.

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