$15B Aid Package For Airlines

Mineta grilled on safety

By Ellen Yan | WASHINGTON BUREAU

September 21, 2001

Washington - The Bush administration and Congress agreed early today on a $15-billion package yesterday that would send airlines $5 billion to recover from the four-day air travel shutdown and use another $3 billion from the attack relief approved last week to pay for immediate security improvements.

The government also will provide the airlines with loan guarantees of $10 million.

The announcement came after members of a key Senate panel demanded immediate safety measures - cockpit doors that can't be "pried open with a fork," one senator said - and put Transportation Secretary Norman Mineta on the defensive, complaining that safety recommendations have been studied for years without much result.

The proposed aid is expected to be the first installment of federal assistance for the industry, whose executives have blanketed Capitol Hill and the White House this week in search of cash and loans with the federal government as co-signer after the Sept. 11 terrorist attacks, which involved four passenger jets. Airlines already were projected to lose $3 billion this year.

"They were ordered to put all their planes down on the ground and stop flying by an action of the government," said Ari Fleischer, spokesman for President George W. Bush. "That order by the government is what allowed us to know exactly how many terrorist planes were up in the air."

The administration's plan, worked out Wednesday night and agreed to early today, also would temporarily change the Department of Transportation's war risk insurance program so it would provide terrorism risk insurance.

The airline trade group, the Air Transport Association, had warned that loan guarantees must be included.

"Anything less could be detrimental to the health of the industry," said spokesman Michael Wascom.

The House is expected to approve the package today with the Senate expected to follow soon afterward.

As part of a growing chorus for caution, Treasury Secretary Paul O'Neill testified yesterday at the Senate Banking Committee against loan guarantees, saying viable airlines wouldn't need them and others could eventually cost taxpayers if they defaulted.

Mineta warned the Senate Transportation Committee yesterday that a major airline was on the verge of bankruptcy because Reagan National Airport in Washington, D.C., is the only one still closed.

While Mineta and the airlines insisted on immediate aid, senators demanded immediate safety measures. They want heavy locks for cockpit doors and cameras positioned outside cockpits so pilots can see signs of trouble in the cabin. Lawmakers urged Mineta not to worry about price tags and to look at security issues.

"The truth of the matter is that we have, collectively, all of us, let our guard down," said Sen. John Edwards (D-N.C.). "The reality is we have to prepare for the next creative attack that these terrorists are working on right now."

Senators berated Mineta, who had conducted security hearings when he was chairman of the House Transportation Committee, for not yet taking a public position on whether the workers who screen passengers and baggage should be federal employees.

"I don't want you to have the feeling that I'm for the status quo," Mineta said. "It's going to be a hell of a lot better than it is right now."

Chief economic correspondent James Toedtman contributed to this story.