Burgess Everett Politico Pro
Carney: Job Losses for Aviation Workers Just 'Difficult Choices'
February 22, 2013
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  • By Burgess Everett

    White House press secretary Jay Carney didn’t ooze sympathy Wednesday for the thousands of plane builders who could lose their jobs if the Obama administration succeeds in its call to eliminate a tax break for corporate and private jet owners.

    “I would say that making choices about budgets and deficit reduction always involves difficult choices,” Carney told a reporter who asked what he would say to “tens of thousands” of middle-class aviation workers whose jobs could be affected in states like Kansas, Washington and Oklahoma.

    Carney then went back to the administration’s usual argument on how to avert the looming sequester — that the debate is a choice between “special” tax breaks versus national defense, Head Start for children and jobs for teachers.

    “When it’s a choice between laying teachers off or affecting our national security or in the broader scheme, reforming our Tax Code in a way that eliminates these special interest tax breaks or subsidies, that is a better option,” Carney said. “The question here is: What choices do we make? Do we choose to protect narrow special interest loopholes?”

    Rep. Mike Pompeo (R-Kan.) raised concerns earlier this month that more than 1 million people in the general aviation industry could be affected by touching the 1986-era tax exemption for personal and corporate jets. The reporter at Wednesday’s briefing said thousands of layoffs have already occurred in Kansas “since the president started mentioning this.”

    But Carney was unmoved.

    “I don’t doubt that there are benefits that are enjoyed by companies and others that flow from loopholes,” he said. “None of these are cost-free, but it’s a pretty clear choice.”

    The infamous loophole, a frequent target of President Barack Obama, stole the show at the daily press briefing. Carney repeatedly pitted the billions of dollars in automatic spending cuts looming on March 1 against “corporate jet owners,” along with the oil and gas industry.

    One reality, though: Eliminating the tax benefit would pay for a fraction of the billions in domestic spending cuts that sequestration threatens to impose March 1.

    The tax break allows general aviation aircraft to be depreciated over five years rather than seven for commercial planes. Eliminating that provision has been estimated to generate about $300 million a year, or $3 billion over 10 years. The sequester will deliver about $43 billion in domestic cuts this year alone should it go into effect.

    “Can we acknowledge here that closing the loophole for corporate jet owners … is not going to solve your sequester problem?” another reporter asked Wednesday.

    “We can acknowledge it, but implicit in your suggestion is that we ever said that it would,” Carney responded. “Can you tell me a single tax loophole … that Republicans have identified that they’re willing to close that would reduce the deficit?”

    However, the press secretary also said Obama supports legislation from Senate Democrats that would avert the sequester, mostly through raising taxes on the rich but also ending some farm subsidies and cutting some defense spending.

    The Senate bill doesn’t include anything to eliminate the break for jets. So while Carney continued to hammer private jet owners, he also was endorsing a bill that would do nothing to close that loophole.

    “There’s legislation that has been submitted that would avert the sequester implementation by House and Senate Democrats. The president supports that legislation,” Carney said.