Bush: Put Airline Bailout On A Diet

Intensifying a clash among Republicans, White House officials on Wednesday said the GOP-controlled Congress has crafted excessive aid packages for the airlines, but congressional leaders vowed to resist major changes.

The Senate plan is worth about $2.7 billion and the House proposal about $3.2 billion. Both are part of a supplemental budget that contains money to pay for the war with Iraq.

Airlines say they need help to offset war-related losses and have asked for $4 billion.

White House press secretary Ari Fleischer questioned the need for such large packages, noting jet fuel prices have fallen recently and ridership has not dropped as much as airlines feared.

"We want to continue to work with the Hill on this, but the amounts that they have passed we believe are excessive," he said.

President Bush is seeking quick action on the spending bill, and Fleischer would not say whether a veto is possible if the aid package is not reduced when the House and Senate work out their differences next week.

Senate Majority Leader Bill Frist, R-Tenn., said it's unlikely the Senate plan will be changed much.

"We have a responsibility to address the issue surrounding the airlines, the impact of war," he said.

House Speaker Dennis Hastert, R-Ill., is the driving force behind the House plan. Spokesman John Feehery said Hastert still believes the amount is fair.

The House plan gives the airlines cash by returning taxes and fees they've paid for security since the Sept. 11 terrorist attacks and relieves them of those costs until Sept. 30, 2003. The Senate proposal gives the airlines a tax holiday for the security fee from April 1 through Sept. 30, reimburses them for specific security measures, extends unemployment insurance for aviation workers and gives airports $375 million.

Airlines are experiencing the worst downturn ever because of terrorism fears, the war in Iraq, overcapacity, mismanagement and high labor costs, say airline analysts. Since the war began two weeks ago, the airlines have announced 10,000 job cuts, according to industry estimates.

Congress passed a $15 billion aid package after the Sept. 11 attacks — $5 billion in cash and $10 billion in loan guarantees. Bush administration officials say rather than provide money to keep afloat some airlines that might otherwise fail, market forces should be allowed to determine which carriers survive.

"The industry is undergoing a period of fundamental restructuring to align costs and capacity to the demands of the marketplace, and excessive, generalized assistance would only delay and disrupt these important and inevitable changes," the White House budget office said in a statement.