With help from Tanya Snyder
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— An intentionally skewed formula and Congress telling the FAA to divide by zero are two of the reasons why some smaller airports got a disproportionate amount of money from the CARES Act, and the agency is now trying to square the numbers.
— President Donald Trump suggested buying years worth of airline tickets for government employees as another way to boost carriers’ fortunes in the short-term.
— Trump, Christie, Barrasso, Biden. What do they all have in common? They each think a massive infrastructure bill should be a big part of the next phase of coronavirus response.
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AIRPORT GRANTS, EXPLAINED: After local news reports started coming in around the country about smaller airports being shocked by the sizes of grants they got from the CARES Act, your MT host began digging. Here’s what we found:
Part of the reason is the bill’s formula for airport grants was designed to favor smaller airports, after a rushed process in which a Senate-developed formula using factors other than size and traffic won out over a simpler House proposal.
Another reason is part of that formula involves, in some cases, an impossible calculation: dividing by zero. The way the FAA handled that mathematical paradox led to a surprising bonanza for 56 airports, which were each handed $17.56 million simply because they had no debt but some level of cash reserves.
What happens next: Some airports aren’t actually getting all the money they were initially promised. The FAA now says it will give out initial grants of, at most, four years worth of operating expenses. Airports that were allocated more than that will have to prove to the FAA they have a need for the remaining money and request it in a separate process.
What they’re saying: The formula and its implementation were “badly done,” said Allan Penksa, chief executive officer of Gainesville Regional Airport in Florida. And a congressional Democratic aide told POLITICO: “We pushed back against [the formula taking debt into account], but the process happened so quickly.”
TOWER HOURS: We also got our hands on the list of air traffic control facilities that are being considered for reductions in their operating hours as part of the FAA’s Covid-19 response: 115 towers are candidates, in some cases facing potential reductions of as much as 16 hours. The FAA has said operations won’t be affected, and the cuts are in line with drastically reduced air traffic, but at least one airport has already publicly complained that the move shifts the burden of safety to its employees.
ANOTHER WAY TO RESCUE AIRLINES? At a bill signing on Friday, Trump tossed out another way the federal government could help boost airlines beyond the billions it’s already pumped into the industry: buying up tickets. As our Brianna Gurciullo reports, Trump said the government could buy “four or five years worth” of heavily discounted tickets to “infuse them with some cash.”
Big caveats: Beyond the offhand comments, there’s no suggestion that the U.S. is actually considering this policy, and it’s not clear whether it would be a good idea anyway. As aviation analyst Scott Hamilton noted on Twitter: The move would “destroy yield for years” in a desperate attempt to get cash now.
But it’s already been done elsewhere: Hong Kong’s airport authority announced earlier this month that it would buy 500,000 airline tickets in a cash injection for the industry, according to the South China Morning Post.
THE LATEST ON AIRLINE GRANTS: The Treasury Department gave out new numbers over the weekend as it continues handing out money to airlines from the CARES Act. Since an initial spate of payroll grant payments on April 20, the agency has given out an additional $9.5 billion in initial payments to eight major airlines and 29 smaller carriers. In total, that’s $12.3 billion to 93 companies so far, with more to come.
LOOKS LIKE INFRASTRUCTURE’S BACK ON THE MENU, BOYS: Despite an internal debate over spending in the Republican party, Trump continues to push for an infrastructure investment, The Washington Post reports. He’s also got support from Capitol Hill, as Sen. John Barrasso told the Post that the plan is to merge his highway bill with a water infrastructure bill once the Senate returns. “Barrasso said he had spoken to Trump about that strategy and that he’s been “very encouraging,”” Seung Min Kim reports.
Chris Christie thinks so, too: “The next congressional relief package should include a bipartisan infrastructure bill to rebuild our roads, bridges, airports and tunnels,” wrote the former New Jersey governor in an op-ed over the weekend, adding that it’s a “perfect time” to start while roads and transit systems are near empty.
A bipartisan sentiment? Presumptive Democratic presidential nominee Joe Biden agrees, although the details may be just a little different. Biden told POLITICO’s Michael Grunwald that the next round of coronavirus response legislation should include investments like a “trillion-dollar infrastructure program that can be implemented really rapidly.”
Green infrastructure: “Biden said investments in light rail, clean drinking water, and half a million electric vehicle chargers on the nation’s highways could help retool the economy for the future,” Grunwald writes.
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TRANSIT STILL FACING CRUNCH: The $25 billion for transit agencies included in the CARES Act was much-needed, but it might not be able to buoy some of the biggest systems for longer than a few months, according to a new analysis from the Transit Center. The money will sustain operations for just 5-8 months in the 10 U.S. regions with the highest transit ridership, while for smaller transit markets it will last on average 13-21 months. “Some of the hardest-hit transit agencies get the least help, relative to their need,” the analysis notes.
CHAO ON THE (CONSERVATIVE) MEDIA CIRCUIT: Transportation Secretary Elaine Chao did interviews with Fox News and One America News on Friday. She told Fox’s Neil Cavuto that discussions are ongoing with unions and airlines about whether airline passengers should be required to wear masks.
T&I TO DHS: Trump is planning to nominate Elizabeth Spivey, a former House Transportation and Infrastructure Committee staffer, to be assistant secretary for legislative affairs at the Department of Homeland Security. As Brianna reports, Spivey was a senior staffer under former T&I Chairman Bill Shuster, before launching a lobbying firm where her clients included Airlines for America and BNSF Railway Company.
Marc Scribner, a transportation policy expert at the Competitive Enterprise Institute, is moving to the Reason Foundation, where he’ll continue working on the same portfolio as senior transportation policy analyst.
— “Boeing drops plan to merge with Embraer.” POLITICO Europe.
— “Will the coronavirus kill the state’s transit comeback?” Connecticut Mirror.
— “Train possibly belonging to North Korean leader spotted in resort town: think tank.” Reuters.
— “Tesla rolls out Autopilot navigation for traffic lights and stop signs.” Engadget.
— “Covid-19 delays Canada’s clean fuel standard regulations.” POLITICO Canada.
DOT appropriations run out in 156 days. The FAA reauthorization expires in 1,252 days. Highway and transit policy is up for renewal in 156 days.