WASHINGTON, D.C. — Money continues to be the topic dominating the conversations and actions here as the President, Congress, and businesses, including aviation groups, face a series of challenges.
The federal debt is passing $16.5 trillion and increasing at the rate of $3.2 million a day. The President wants more taxes to slow it. That’s one spot where aviation groups differ with him. They also differ with his proposals to assess a fee on all flights using Air Traffic Control services and a reduction on the depreciation schedule for general aviation and business aircraft.
Officials from the General Aviation Manufacturers Association (GAMA), National Business Aircraft Association (NBAA), and Aircraft Owners and Pilots Association (AOPA) came out fighting after Jay Carney, the White House press secretary, commented about closing “loopholes” for items like corporate jets.
Craig Fuller, president and CEO of AOPA said: “AOPA is very disappointed in the Obama Administration’s endless attempts to lengthen the depreciation schedule for business aircraft. At a time of widespread concern over job creation in this country, we feel it is short-sighted to put further financial burdens on an industry that contributes positively to our nation’s balance of trade, and one that supports highly skilled, good-paying jobs.”
“Once again,” said Pete Bunce, president and CEO of GAMA, “the Obama Administration is starting the drumbeat that we could end all the fiscal challenges our nation faces by changing the depreciation schedule for general aviation and business aviation from five to seven years. Their rhetoric is wrong and all it does is hurt general aviation companies and workers across this country.”
“Purchasers of jets, turboprops, rotorcraft, and piston aircraft didn’t create the country’s misfortune, but contributes more than $150 billion to the economy annually and employ more than 1.2 million people,” he added.
Ed Bolen, president and CEO of NBAA, said the White House rhetoric about general aviation depreciation ignores established facts and long-standing tax policies related to business aircraft ownership and use. Noting changes to the depreciation schedule for GA aircraft would not yield meaningful progress toward reducing the national debt, Bolen added it has the potential to harm a great American industry.
Business jets are used by government officials. A report from the General Accounting Office shows that for fiscal year 2002 the federal government spent $289.9 million operating its aircraft. All cabinets in the administration have their own business jets. In that year 15,545 flight hours were racked up by business jets operated by the Departments of Agriculture, Commerce, Energy, Justice, State, Interior, Treasury, Transportation, National Aeronautics and Space Administration, National Science Foundation, and Tennessee Valley Authority.
The President’s business jets are two Boeing 747-200Bs operating as “Air Force One.” Cost to fly these on presidential business trips is $180,000 an hour. The recent extra vacation trip to Hawaii taken by the president in his business jet cost taxpayers $3 million. This business jet has also been used on local hops. One example is a 90-mile trip from Washington, D.C., to Richmond, Virginia.
Many in aviation are puzzled by the confusing positions of the President, who recognizes the value of aircraft for conducting government business while at the same time proposing raising taxes on individuals and companies that find business and personal aircraft of distinct value.
The issue is sure to continue.