"Republicans insist EAS subsidies must be cut"

Friday, August 19, 2011

Republicans insist rural air subsidy must be cut
By JOAN LOWY
The Associated Press


WASHINGTON (AP) - Congressional Republicans are warning Transportation
Secretary Ray LaHood he must cut subsidies for air service to 10 rural
communities unless he can show it would be too difficult for residents to
reach a larger airport.

White House assurances that the cuts would be waived cleared the way for
Senate passage of legislation this month, ending a two-week partial shutdown
of the Federal Aviation Administration.

But in a letter released Friday by the House Transportation and
Infrastructure Committee, Republicans requested that LaHood provide a "full,
written justification" of any waivers of subsidy cuts.

The letter was signed by Rep. John Mica, R-Fla., chairman of the committee,
and GOP Sens. Tom Coburn of Oklahoma, Jim DeMint of South Carolina, Rand
Paul of Kentucky and Mike Lee of Utah.

A dispute between the House and Senate, in part over the subsidies, forced a
partial shutdown of the FAA beginning on July 23 that caused the furlough of
nearly 4,000 federal workers, halted work on more than 200 airport
construction projects and cost the government about $400 million in
uncollected airline ticket taxes.

House Republicans sparked the dispute by adding a provision cutting $16.5
million in air service subsidies to a bill temporarily extending the FAA's
operating authority through mid-September. Senate Democrats refused to
accept the House bill, saying Republicans were breaking with precedent by
including policy changes that hadn't been agreed on to an extension bill.

The bill would eliminate subsidies for 10 communities that are less than 90
miles from a hub airport: Morgantown, W.Va.; Athens, Ga.; Jamestown, N.Y.;
Bradford, Pa.; Hagerstown, Md.; Jonesboro, Ark.; Johnstown, Pa.;
Franklin/Oil City, Pa.; Lancaster, Pa., and Jackson, Tenn. However, the bill
also gives the transportation secretary the authority to waive the cuts if
the geographic characteristics of a community would make it too difficult
for residents to reach a larger airport.

The bill also eliminates subsidies for air service to Alamogordo, N.M.; Ely,
Nev., and Glendive, Mont., because the subsidies average more than $1,000
per passenger.

Congressional committees have identified the 13 communities as the cities
that would be affected by the law. But a Transportation Department
spokeswoman said the department is still working on interpreting the law and
which communities might be impacted.

The Essential Air Service program was created to ensure service on less
profitable routes to remote communities when airlines were deregulated in
1978. But the program's budget has quadrupled from $50 million to $200
million in the last 10 years.

Critics call the spending a boondoggle. For example, the government pays
Great Lakes Airlines to provide service between Ely and Las Vegas, but there
is so little demand that sometimes planes take off without a single
passenger on board.

But others see the program as a critical financial lifeline to ensure
economic stability in rural areas.

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