Was aviation designated a ‘loser’ under tax reform?

February 21, 2013

New comments by Obama administration officials indicate that the White House has picked the aviation industry as a “loser” under deficit reduction efforts despite widespread layoffs and cutbacks already facing workers in the sector, said Sen. Pat Roberts (R-Kan.).

Roberts issued a statement after a White House press briefing Feb. 20 in which Jay Carney, President Obama’s press secretary, contrasted the industry with other administration budget priorities during efforts to reduce the federal deficit.

According to a transcript, a questioner at the briefing asked Carney what he would say to middle-class aviation workers who are “very worried about the President’s comments” about the general aviation industry, which has already laid off thousands during difficult economic times.

Carney responded, “I would say that making budgets and choices about deficit reduction always involve difficult choices. And that when there's a choice between laying teachers off or affecting our national security, or in the broader scheme of reforming our tax code that—in a way that eliminates these tax breaks, special interest tax breaks or subsidies, that is a better option than voucherizing Medicare or cutting education investment, or throwing people—kids off of Head Start.” (See the continuation of the question-and-answer session here.)

Roberts, who recently objected to the administration’s characterizations of the industry in confirmation hearings for Treasury Secretary nominee Jacob “Jack Lew,” said Carney’s remarks showed that the administration was willing to select aviation industry workers as “losers’ in the deficit battle. Carney had also criticized the industry in a press briefing on Feb. 6.

“Today, the White House made it clear it sees the Administration’s role in deficit reduction as picking winners and losers," Roberts said in a news release. "Unfortunately for Kansans and for the hardworking employees of the American general aviation industry, the Obama White House has determined they are the losers.”

Roberts said it was “a sad day for American aviation, for Kansas, and for our struggling economy.”

“These comments exemplify how our GA supporters in the U.S. Senate really make a difference for AOPA,” said Lorraine Howerton, AOPA vice president of legislative affairs. “Senator Roberts’ defense of the GA industry could not have come at a better time.”

Later, in an interview, Obama told the reporter who had questioned Carney that the administration wanted to “give more tax breaks to all the aviation companies in Kansas” to spur production and hiring, according to a news report. Obama’s statement drew criticism from Sen. Jerry Moran (R-Kan.).

In a news release, Moran said, “The President continues talking out of both sides of his mouth. His obsession with the so-called ‘corporate jet loop hole’ stands in direct contrast with his supposed desire to help the aviation industry and create jobs. Ending the accelerated depreciation schedule for general aviation aircraft will send hundreds if not thousands of hardworking Kansans straight to the unemployment lines. The President says his political gimmick isn’t about cutting jobs, but that will be the result.

“This rhetoric from the President is misguided and dangerous. According to the nonpartisan Joint Committee on Taxation, the revenues raised by the President’s proposal over the next 10 years will not even cover what the federal government borrows in one day. The five-year depreciation schedule for general aviation aircraft has been law for nearly a quarter century, and was created not for the benefit of the aircraft purchaser, but for the 1.2 million Americans who make a living building and servicing these planes. Accelerated depreciation for aircraft helps spur manufacturing sales and creates jobs. I’m disappointed the President would rather continue his endless campaign to score political points with sound bites like the ‘corporate jet loophole’ than work toward a real solution to solve our nation’s fiscal challenges.”