Congress Should Balance Needs of Airlines, Taxpayers and Other Businesses in Proposed Bailout

Sept. 20, 2001

Congress Should Balance Needs of Airlines,
Taxpayers and Other Businesses in Proposed Bailout

Public Citizen Urges Lawmakers to Scrutinize Financial Requests
Resulting From Terrorist Attacks

WASHINGTON, D.C. Public Citizen is urging lawmakers to balance the needs of financially strapped airlines with those of taxpayers and other businesses when considering a multibillion-dollar bailout package for the industry. Airlines should not leverage public concern over last week s terrorist attacks to compensate for other financial demands, the organization said.

In a letter sent Thursday to lawmakers, Public Citizen asked Congress to ensure that the need for financial assistance for the airlines be fully documented, so that the size and shape of a bailout is dictated by facts, not the airline industry s wish list. Claims of what the attacks cost the airlines should be independently verified through the General Accounting Office, the Department of Transportation s Inspector General or other independent sources, Public Citizen said.

“Like the rest of the country, we are still reeling from last week s events, and it is understandable that Congress wants to respond quickly,” said Public Citizen President Joan Claybrook. “But we must be careful to protect taxpayers too. We may need to help airlines with their short-term needs resulting from the terrorist attacks, but the financial information is still murky. Lawmakers should see the financial data behind the airlines claims before acting.”

Any aid given now should be for a maximum of six months, because estimates of losses a year from now are hypothetical and difficult to predict, said the letter, signed by Claybrook and Public Citizen s Congress Watch Director Frank Clemente.

“We just don t know enough to ask taxpayers to fork over billions of dollars to cover losses that may or may not occur next spring or summer,” Claybrook said.

In addition, Public Citizen made the following requests:

Congress should ensure that any bailout will not be used to give top executives big bonuses and raises, or to give the industry increased profits;

Any aid should be conditioned on the airlines support of federal efforts to improve airport security measures. The airline industry in the past has fought improved airline and airport security recommendations;

Lawmakers should remember the economic needs of a variety of large and small businesses hurt by the attacks. Also, when discussing transportation subsidies, lawmakers should consider alternate means of transportation, such as Amtrak;

Congress should not grant any shield for airlines from liability arising from the attacks, particularly since there is no information available now about their culpability;

The airline industry should not be granted immunity from anti-trust laws, because this likely would lead to artificially higher prices and could lead to collaboration on prices;

Congress must enact a Passengers Bill of Rights that would ensure passengers get timely and truthful information about flight delays, as well as permission to deplane and use food and sanitation facilities when a flight is delayed for an unreasonable amount of time, as is more likely to happen with stricter security measures.

Read the letter.

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