Wednesday, July 27, 2011

The Sky is the Limit: Aviation and the Debt Ceiling

Can we agree? The ongoing "debt ceiling" debate needs to be resolved soon, right?

Might further agreement be had, then, that aviation—business aviation specifically—is not an obstacle to ending federal budget deficits?

Maybe that question invites more debate, but it is not a settled one.

Yet, at every chance, the Obama administration seems bent on linking private aviation with the nation's economic turbulence.  As recently as his last national address on Monday, President Obama, attacked private jet owners:

So the debate right now isn't about whether we need to make tough choices. Democrats and Republicans agree on the amount of deficit reduction we need. The debate is about how it should be done. Most Americans, regardless of political party, don't understand how we can ask a senior citizen to pay more for her Medicare before we ask corporate jet owners and oil companies to give up tax breaks that other companies don't get.

The aviation community has little idea what Mr. Obama means.

In the absence of a specific criticism, industry analysts speculate that the President objects to aircraft depreciation rates.  As an editorial in Aviation Week & Space Technology ("Obama's Bizarre Attacks on Biz Av") observed, under current law, new business aircraft, engines, and avionics can be depreciated in as quickly as one year, rather than the seven years more typical of tangible business assets.  "Amazingly, that shortened schedule was authorized by Obama's own economic stimulus package.  Now, he wants a seven-year schedule."

This still would not help the budget very much, constituting as it will only $3 billion in additional revenue over ten years—a far cry from the more than $1 trillion deficit amassed yearly and the $4 billion, 12-year budget proposal now under consideration.

The fervor against private jet owners was not helped when, on November 19, 2009, automobile industry executives appeared before Congress to request taxpayer bailout money to survive the worst economic crises since the Great Depression—they flew to Washington, D.C. in corporate jets, drawing the ire of politicians and citizens alike by perpetuating the perception that equates general aviation with wealth and luxury. 

Public relations can always be handled better, and balancing the budget may be tough stuff, but blaming the business aviation industry should not be so easy.

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