Tuesday, June 4, 2002

Madam President, when the shocking events of September 11 hit us, we all realized that major changes had occurred. The devastation and the death that was visited by the terrorists were truly shocking. But there was collateral damage as well in many areas. We are seeing small businesses that have been put out of business. We have worked hard to try to help them.

But, obviously, one of the most severely affected areas of our economy--really, the lifeline of our Nation's transportation system--the airline industry, was severely hurt by this action. Not only did we shut down flights for a period of days, which cost the airlines literally billions of dollars, their insurance rates skyrocketed and put them at risk. And when you put the airline industry at risk, you put all of us at risk because ours is a very mobile country that depends upon a healthy, competitive airline industry.

I came to the floor on September 13 to urge my colleagues to take immediate action. Well, people in both Houses shared that view, and we did act. We adopted critical legislation to ensure that our airlines could continue to operate even as their insurance rates skyrocketed. This was a successful approach.

Then we embarked on another approach. We said we would set up a $10 billion loan guarantee program to provide assistance to airlines that were doing well, that were ``taking off,'' so to speak, but whose cash shortfall was exacerbated by the shutdown and the slow return of airline passengers. That $10 billion loan guarantee program sounded like a good idea.

We should support this amendment that tries to preserve the full commitment we made to our airlines and to the traveling American public. Now, we have a problem, specifically with the ATSB--that fine group of Federal servants--that decide what airlines get the money.

So far, I think there have been seven applications; and they have only granted one. Even if all the applications were granted, I understand that $10 billion would be more than enough to cover them.

I have had a real problem because we have a fine, growing airline, a new airline in Kansas City, called Vanguard Airlines. So far, the ATSB has formally denied three loan applications submitted by Vanguard. Actually, they have only approved one. That was for America West. We are very glad that our colleagues who fly on America West and the people served by America West will be helped. The intent of this program was to help airlines such as America West and, I believe, such as Vanguard.

When you look at the facts, Vanguard actually stacks up better than America West when you consider the necessary criteria. The airline was growing rapidly and consistently prior to September 11. The airline is trying to get back on its feet, has recently made new hires, is getting back on a growth track. It is increasing routes and hiring people. They wanted a private loan package that would allow them to purchase more aircraft, more Boeing MD-90s.

When I talked with one of the officials at ATSB, they said: Well, we don't have any collateral. If you don't have collateral, and you are going to use the loan to buy an airplane, guess from where the collateral is going to come? They are even bringing in equity funding that would come in with the loan if it were granted. If we fail to do that, the potential ripple effect will not only be on the airline industry but on the entire Kansas City metropolitan area where Vanguard has become a major employer in the area.

I am reminded of a very old and very troubling definition. A friend of mine once said: A banker is a guy who loans you an umbrella and takes it back when it rains. If this loan fund were to be made available solely on the criteria by which a bank would issue a loan, we would not need it. If these airlines are healthy enough to go out and get loans--and many of them are--then they do not need the loan guarantee package.

We set up criteria which should be observed, but somehow those criteria have resulted in denying everybody except America West a loan.

I hope we adopt this amendment by the distinguished chairman and ranking member of the Appropriations Committee to knock out the rescission because we want to make sure airlines that are healthy, that have a good record, that have the potential to grow, are not killed in their infancy because of the cashflow problems, the insurance problems, and the short-term lack of confidence in airline travel that came about as a result of September 11.

I say to our friends who serve on the ATSB, we appropriated this money, we made available these loan guarantees for one simple purpose; and that is, to loan the money to airlines that could otherwise not stay in business and that would not meet bankable loan standards.

This is extremely important to the airline industry. It is important to my constituents in Kansas City. I hope we will support the amendment, and I strongly hope that one of these days they will figure out how to provide money to airlines that may not have bankable loan capabilities but which have the growth and which have the potential to get back on their feet after the tragedy of September 11.

Madam President, I yield the floor.