U.S. Senate Republicans Object To Proposed Airline Relief

WASHINGTON—Several U.S. Senate Republicans objected to a proposed standalone bill to approve $25 billion in additional airline payroll support, further complicating the path for a late-stage effort to restore tens of thousands of furloughed workers to payroll.

In a joint statement Oct. 8, Senators Mike Lee (R-Utah) and Pat Toomey (R-Pennsylvania) raised fresh doubts about the merits of the proposed stimulus, highlighting issues ranging from lack of payroll support in other sectors of the economy to excess airline capacity as a result of CARES Act minimum service levels.

“For the past six months, the American taxpayers have spent $25 billion covering the payroll obligations of passenger airlines. No other Fortune 500 companies—including restaurant groups, transportation firms, hotel chains, or entertainment businesses—have received taxpayer-funded grants,” the senators said. “The excess capacity of the airline sector will not be resolved in the near future and continuing to force the entire payroll obligation onto the taxpayers is not sustainable.” 

Rather than collect another round of grant funding, the lawmakers urged carriers to take advantage of the low-interest long-term loans made available by the CARES Act Secured Loan Program. While six carriers including American Airlines and United Airlines have availed themselves of the loans, other large carriers like Delta Air Lines and Southwest Airlines have opted against them, preferring instead to seek financing at more attractive terms in the public markets.

“Consideration of legislation providing grants to the airlines should not happen unless there are adequate protections for taxpayers and the opportunity to offer related amendments,” the lawmakers said.

The objections from the two senators are critical because the Senate has taken a recess until Oct. 19, meaning any bill passed in the meantime would require unanimous consent. Senator Rick Scott (R-Florida) has also voiced opposition to additional airline relief, recently joining Sens. Lee and Toomey to block an effort to pass standalone legislation in the upper chamber. A parallel effort led by Peter DeFazio (D-Oregon) was also blocked by Republican lawmakers in the House.

A standalone bill to reauthorize the Payroll Support Program was seen by many industry watchers as the likeliest path forward for more airline relief, following a decision by President Donald Trump to freeze talks between Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi (D-California) toward a comprehensive coronavirus relief package on Oct. 6.

Pelosi appeared to throw cold water on a standalone bill on Oct. 8, however, telling reporters she would only support the relief as part of a broader stimulus deal, according to the Wall Street Journal, marking yet another setback for airlines and labor unions that had grown cautiously optimistic in recent days about the prospects of more relief.