Bush signs airline bailout package
WASHINGTON (CNN) -- President Bush signed into law an emergency aid package for the U.S. airline industry Saturday, saying that "the terrorists who attacked our country on September 11th will not shut down our vital businesses or thwart our way of life."
The measure provides $5 billion in direct federal aid and $10 billion in loan guarantees for an industry that has announced tens of thousands of layoffs since the terrorist hijackings.
The measure also offers the industry federal help with rising insurance costs in the wake of the terrorist strikes, and limits airline liability in any federal lawsuits that could result from the deadly hijackings.
The House approved the measure late Friday night, 356-54. The Senate passed the package earlier in the day, 96-1. Sen. Peter Fitzgerald, R-Illinois, was the only senator to vote against the bill.
"I commend the Congress for their cooperation and quick action in passing responsible legislation that will improve passenger safety, help the victims and their loved ones, and keep America's airplanes flying while the airlines develop long-term viability plans," the president said Saturday in a statement.
Senate and House leaders on both sides of the aisle feverishly worked with the White House on Thursday night and all day Friday to bring the bill before Congress with almost unprecedented speed -- despite concerns on all sides about a variety of issues.
Some senators who questioned parts of the bill -- like the absence of assistance for the unemployed or uninsured or aid to other industries -- decided to support it anyway because of the extraordinary circumstances and as a continued show of bipartisan cooperation.
"Why am I up here supporting this bill? Because I think we are in a new era . . . where every one of us has to give a little bit. We heard the president speak, we were unified yesterday, we must keep that unity," said Sen. Charles Schumer, D-New York.
Many senators raised concerns about bailing out an industry that already had financial problems before the terrorist attacks, and questioned why the airlines, not other industries, were receiving taxpayer dollars.
Two hijacked airliners destroyed the twin towers of the World Trade Center on September 11, while another slammed into the Pentagon.
A fourth hijacked jet, believed headed for another Washington target, crashed in Pennsylvania. Planes were grounded for three days due to security concerns.
"I think this assistance is too generous, it gives too much money, it goes far beyond compensating the airlines for those three days that government edict was in effect, and the question I have is clearly we are compensating them for far more," said Fitzgerald, who like some other Republicans, openly worried that the bill was being passed too fast.
But other senators argued saving the airline industry has a ripple effect that helps the whole economy.
"If planes don't fly, the whole economy shuts down," said Sen. Jay Rockefeller, D-West Virginia.
Many senators voted for the bill because of last-minute additions forcing airlines not to shut down business in small communities and a provision to allow the government to receive airline stock options as collateral for the loan guarantees.
As well as the money for airlines, the package includes an ambitious plan for compensating families of victims in the attacks. Rep. Roy Blunt, R-Missouri, said it was like nothing ever tried before.
Under the legislation, the families of those killed at the World Trade Center, Pentagon and Pennsylvania sites, with those who were injured in the crashes, would have two options: they could decide to forgo the right to sue the airlines and instead go to a government fund for compensation; or they could sue.
If they opt into the government fund, the amount of money they eventually receive would be determined by a "special master" appointed by Attorney General John Ashcroft.
That determination must be made within 120 days of filing the claim. A payment would be made within 20 days after that.
The special master would decide what would be fair compensation and move quickly to pay it. Congress would not limit how much the special master could pay out.
If victims sue in court, there would be pre-determined limits on how much money they could receive.
"They can choose one way or another," said House Speaker Dennis Hastert, "but there is a limited amount of money, a pot of money, to sue to get any relief."
The "pot of money" available to those who file lawsuits in court would probably equal the amount of insurance coverage carried by airlines involved when the attacks occurred.
That would include American Airlines and United Airlines but could also include insurance carried by airlines, which ran connecting flights to those that crashed.
There are advantages and disadvantages to choosing either the victims fund or going to court, congressional aides explained.
Opting for the victims fund might prove easier. Families could avoid a potentially long trial and an uncertain outcome. But there would be a formula used to determine how much a victim would receive, based on that person's income and possibly on the amount of insurance the victim carried.
Going to court would be risky, but victims could end up receiving more money if a jury is sympathetic. On the other hand, a jury trial could take a long time and the airlines could be bankrupt -- or at least out of insurance money-- by the time a trial ended, according to congressional aides.
House Speaker Dennis Hastert explained the approach being taken by Congress as a tradeoff.
"What we're trying to do is lift the airlines out of that liability issue so they can get insurance, they can go fly, they can do their work. And we're afraid they couldn't get insurance unless we intervened."
The bill also contains a measure limiting salaries for airline executives. In exchange for accepting the government's money, airlines would not be allowed to give a raise for the next two years to any executive who made more than $300,000 in the year 2000.
It also limits the "golden parachutes" available to retiring executives to twice their salary in the year 2000.
Most lawmakers conceded the bill is not perfect and promised to re-examine and revisit the issues.
"I would call upon my colleagues at the proper time to support this aviation legislation, not to say that it is perfect, not to say that some of this legislation that has risen out of this crisis is perfect, and we will have a chance to revisit and this is only the first of a wave of accountability," said Rockefeller.
-- Senior White House Correspondent John King, Congressional Correspondent Kate Snow, Dana Bash and Ted Barrett contributed to this report.
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