TARP funds urged to create aero jobs
WASHINGTON (Reuters) - The U.S. government should consider using up to $6.4 billion in federal bailout money to jump-start upgrades to the air traffic control system, a top aerospace industry trade official said on Wednesday.
"This industry doesn't have its hand out and we're not asking for a bailout," Aerospace Industries Association Chief Executive Marion Blakey told the Reuters Aerospace and Defense Summit.
But Blakey said any use of the Troubled Asset Relief Program (TARP) by aviation would create thousands of jobs and help the economy in the long run by streamlining an aging navigation system experts agree must be modernized.
"If they are going to start tapping TARP funds for jobs, we believe very strongly that aviation infrastructure should be right at the front of the line," Blakey said.
Democrats have suggested using TARP money to create jobs and lift the sluggish economy. U.S. unemployment stands at 10 percent and many lawmakers are pushing for job-creating programs to help their local economies.
The Treasury Department has said it is working on "a number of fronts" to use TARP money to boost lending to small businesses. TARP resources have grown in recent weeks as big banks scramble to repay billions in bailout money.
Senior U.S. Treasury counselor Gene Sperling, responding to a question on Capitol Hill about Blakey's suggestion, said that future decisions on TARP funding were up to Congress.
The $700 billion TARP program was created last year by Congress to rescue U.S. banks amid a credit freeze that threatened to destabilize the banking system.
It was extended to struggling automakers and suppliers, a step that was criticized by Republicans as going beyond its original intent.
The Treasury Department recently extended TARP until October 2010.
Efforts in Congress to produce a blueprint for air traffic modernization are moving slowly with funding questions dominating the debate. Struggling U.S. airlines have said they cannot afford the multibillion-dollar investment now.
Blakey's group represents big and small aerospace manufacturers who stand to play a vital role in modernizing the air traffic network. She is also a former head of the Federal Aviation Administration (FAA) which oversees air traffic control.
Blakey also said any use of TARP money for aviation should not carry the same strings that have been faced by banks, such as restrictions on executive compensation.
Blakey also suggested the establishment of an infrastructure bank to help fund priority projects like air traffic modernization. That idea is supported strongly by the Obama administration but faces skepticism in Congress.
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