Congress pledges $15 b package

By Sridhar Krishnaswami

WASHINGTON, SEPT. 21. The United States Congress is close to taking the unprecedented step of authorising a $15 billion assistance package to the nation's airline industry. Law makers came up with the package hours after the President, Mr. George W Bush, addressed the nation.

The House of Representatives is expected to take up the measure first today and later it is scheduled in the Senate. The expectation is that by the end of business day on Friday, the Bill will be at the White House for the President signature. Only last week Congress passed legislation for a $40 billion in emergency funding for recovery and additional security. The specific additional funding was requested by the President.

The airlines relief package was subject to some heavy lobbying on Capitol Hill with chief executives of major airlines making the point that the full operations would have to come to a grinding halt if there was no intervention from the government. The White House was initially said to be reluctant to any direct cash assistance to the airlines.

With layoffs expected in the neighbourhood of 100,000 or more and an additional 30,000 from Boeing Company, the consensus evolved that the situation was indeed very serious to the point of several major carriers filing for bankruptcy, and very soon.

The original expectation was that the administration and Congress will look at a $24 billion package. But under the new Bill some $5 billion is being earmarked for direct assistance and $10 billion in loan guarantees. A sum of $3 billion for enhanced security will come out of the earlier $40 billion emergency package.

In the last several days, the airlines business is reeling and for many reasons - the initial shutdown, the FAA's stipulation that unless airlines and airports agree to the new security provisions business cannot resume, increased insurance premiums in the aftermath of the hijackings and loss of passenger confidence. The investment firm, Morgan Stanley, had informed the Treasury Secretary that there would be ``no functioning of capital markets'' for the U.S. airline industry unless the government stepped in and provided relief.

In Congress, while there was the sentiment that the nation's airline industry had to be helped in such special circumstances, there was also apprehension of making use of the taxpayers' dollars to help industries where problems existed much before the terror attacks of September 11.

The Chairman of the Senate Commerce Committee, Mr.Ernest Hollings, said, ``I am not interested in propping up carriers that were not viable at the beginning of this month.''

What is being pointed out is that in coming up with this package of $15 billion, the interests of the workers who are being laid off have not been taken into consideration. While efforts are on to include measures for this category of people, not many are hopeful of anything substantive evolving by the end of the day.

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Section  : Business
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