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Private-Jet Fuel Taxes Won´t Rise; Senate Pulls Aviation Bill

Private-Jet Fuel Taxes Won´t Rise; Senate Pulls Aviation Bill

U.S. business-jet owners may not face a proposed 65 percent increase in fuel taxes until 2009 at the earliest, as the Senate put aside an aviation-funding bill amid disputes over roads, pensions and rail projects.

The plan was removed from the Senate floor after lawmakers fell short of the 60 votes needed to end debate. Supporters mustered only 49 votes in favor of proceeding, to 42 against.

``We find ourselves in a stalemate,´´ said Mitch McConnell of Kentucky, the Senate´s top Republican. Senator Kay Bailey Hutchison, a Texas Republican, added, ``We should go back to the drawing boards.´´

The measure´s demise forces Congress to fund the Federal Aviation Administration´s $ 15 billion budget with temporary extensions of existing taxes as lawmakers try to settle their differences. Senate Democratic Leader Harry Reid of Nevada said last week the bill may not be worked out until next year.

Senate aviation leaders agreed on the planned tax increase on April 25 as they resolved a seven-month standoff over the aviation bill. The accord called for boosting business-jet fuel taxes to 36 cents a gallon from 21.8 cents, providing $ 240 million a year to upgrade air-traffic control equipment.

The Senate was trying to show it could act in the face of near-record airline delays, concern that the FAA provided poor safety oversight, and passengers being stranded in planes on runways.

The breakthrough lasted only three days, as disputes surfaced over items unrelated to funding the FAA through 2011.

``Republicans´ obstruction is just another unnecessary and unwelcome delay in making our air-traffic systems as safe and efficient as they should be,´´ Reid said in a statement after the vote.

Among the snags was a plan to divert $ 5 billion in Treasury funds to cover a shortfall in gasoline taxes for highway construction. The Treasury would have been reimbursed by doubling the oil-spill tax to 10 cents a barrel and collecting back taxes from firms incorporating abroad.

President George W. Bush´s budget office called the transfer a ``gimmick´´ and threatened to veto the FAA bill partly because of it. Some Senate Republicans also objected, saying the provisions would increase taxes.

Democrats ``bogged´´ down the FAA measure ``with measures that don´t belong in the bill,´´ McConnell said.

Another sticking point was the unsuccessful effort by some senators to repeal pension assistance for AMR Corp.´s American Airlines and Continental Airlines Inc. Finance Committee leaders said they wanted to try again to scale back the aid, creating another challenge for the FAA bill.

Some senators also objected that the FAA bill would include a plan to issue tax-credit bonds for rail construction and to let New York City keep some federal tax receipts from city and state workers for capital projects.

The House approved its version of the FAA funding legislation Sept. 20. That bill, which would boost business jet- fuel taxes to 35.9 cents a gallon, and the final Senate proposal would have needed to be reconciled in a conference committee before being sent to Bush for his signature.

Assuming that the current bills aren´t enacted by the time a new president takes office in January, Congress would need to start over and send the FAA legislation back through the committees and the full House and Senate.

/ Новости