Burgess Everett POLITICO
Mike Pompeo introduces bill for FAA small-plane rules
May 23, 2013
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  • Lawmakers and industry groups are working to reverse a downward trend in one of the few manufacturing segments that the United States still dominates: general aviation.

    Many of those small- and medium-sized planes, which are used for everything from business travel to crop dusting, are built in America’s heartland, especially in Wichita, Kan., represented by Republican Rep. Mike Pompeo. He said an outdated regulation structure and consistent targeting in tax proposals from President Barack Obama have led to tough times in his hometown, which has lost thousands of jobs up and down the aircraft building supply chain in the past five years.

    Wichita is nicknamed the Air Capital of the World, but Pompeo — an aerospace company founder — describes the industry there as “very, very troubled.” He’s trying to change that by taking the lead on a bill he hopes can increase innovation in the industry and employment in his hometown.

    Just in Wichita, the workforce at Cessna Aircraft has been halved from 12,000 to fewer than 6,000 jobs in five years; aircraft maker Beechcraft is just emerging from bankruptcy; and Boeing is set to clear out by the end of the year. Meanwhile, companies like Brazilian plane builder Embraer are creeping in on U.S. market share.

    “You have a very, very, very low demand side for general aviation aircraft generally,” Pompeo said in an interview. “We’re absolutely losing out to competitors from across the globe.”

    The congressman has worked with the Federal Aviation Administration to write legislation to speed the certification process for new general aviation aircraft, which encompasses any planes not used for commercial air travel. More than 20 co-sponsors, including the progressive Rep. Rick Nolan (D-Minn.) and conservative Rep. Tim Huelskamp (R-Kan.), have joined Pompeo’s effort to direct the FAA to decrease certification costs and make safety tests less onerous.

    Sen. Amy Klobuchar (D-Minn.) told POLITICO she plans to introduce a companion bill in the coming days that could benefit Cirrus, an aircraft builder in Duluth, Minn., and help “make sure they keep strong.”

    Pompeo expects the House Transportation and Infrastructure Committee to approve his bill this summer.

    “We have to go create a climate where [plane manufacturers] can go compete,” he said. “Sometimes they may well still not be successful, but you cannot have a tax and regulatory structure that puts American manufacturing at a decided global disadvantage. And that’s what I think we have today.”

    But one cannot discuss the state of the general aviation industry without getting an earful about the president and his calls to close a “loophole” for small-plane depreciation schedules as well as his proposed $100 plane-landing fee.

    Eliminating the tax break on planes — which the White House usually describes as “corporate jets” — would raise about $3 billion over 10 years. Obama first introduced the tax proposal in 2011 and has frequently used it to portray Republicans as favoring wealthy jet owners over ordinary taxpayers.

    “It is the wrong way to reduce our deficit or eliminate the sequester by simply saying: ‘You know what, we’ll just ask seniors to deal with it,’” White House press secretary Jay Carney said in late April, adding, “‘We’ll hold harmless millionaires and billionaires. We’ll let those tax loopholes stay in place for those who benefit [from] or own corporate jets.’”

    In February, Obama said the impact on the industry would be minimal.

    “The reason people buy corporate jets is because it’s extremely convenient, and they can afford it,” the president said. “And they don’t need an extra tax break.”

    But airplane builders say their orders suffer when Washington singles them out.

    “Beating up on general aviation polls well,” said Jens Hennig, a top executive for the General Aviation Manufacturers Association. “The rhetoric is really harmful for our sales.”

    It’s not just the manufacturers who bristle every time the president or Carney takes aim at the tax break. Small-business leaders who have grown tired of traversing the country by car also fear that the president is targeting them, said National Business Aviation Association President Ed Bolen. Aviation groups contend that Obama’s budget proposal for a $100-per-flight fee for all aircraft would disproportionately whack the small planes that executives and business owners use.

    “When the president uses the term ‘business aviation’ or ‘business jet,’ he does it with a dismissive or disparaging tone, which is frustrating because this is one of America’s great industries,” Bolen said.

    Pompeo said his constituents have told him that Obama’s comments on general aviation are more harmful to customers and plane builders than the proposals themselves. Indeed, members of Congress from both parties as well as general aviation groups say they are open to talking about the depreciation tax break as part of broad tax reform, but they dislike Obama singling them out.

    “He’s given — gotta be careful — dozens and dozens of speeches in which he says, ‘Corporate fat cat jet owners,’” Pompeo said. “You can talk to the folks at these businesses; they will all tell you: ‘The president gives that speech; it spooks the market.’”

    The president is certainly fond of referring to general aviation aircraft as “corporate jets,” but it’s not clear whether he’s ever called owners of those planes “fat cats,” as he has done for bankers. Pompeo wrote in a letter to the president in February that Obama has “demonized” the industry by calling owners “fat cat corporate jet owners.” But a LexisNexis search didn’t turn up any references of Obama using the phrase, and the White House had no record of it.

    Democrats who have joined Pompeo to attempt to alter the regulatory structure for manufacturers aren’t as worried about White House rhetoric or the proposals targeting jet owners or builders.

    “Oh, I don’t know that,” Klobuchar said when asked whether Obama’s proposals have hurt business for Cirrus, the builder in her district. “I’m just focused on making sure they keep exporting.”

    Rep. Daniel Lipinski (D-Ill.) said he’s confident Capitol Hill will never go for either the per-flight fee or the tax break individually — those would come only during broad reform.

    “Every time the president has recommended it, Congress has pushed it aside. I assume that will continue,” said Lipinski. “I can understand those who are in aircraft manufacturing — you don’t want to hear any sort of rhetoric.”

    Lipinski’s Chicagoland district has seen a gradual erosion of aviation jobs in recent years. He said he hopes the Pompeo bill will help bring it back to the visible community icon he remembers from his childhood.

    “I used to play Little League baseball at Aircraft Gear Field,” Lipinski said. “The company is still there, but it’s smaller than it used to be.”