The Delta Democrats

Kudos to some smart maneuvering on the part of the Georgia Dems. They tried to get the call of the special session changed to deal with Delta, but were unsuccessful. Legally, I think they were on dubious grounds with that, but it has made for great politics and kept the Dems in the headlines.

The most interesting issue though is what to do with Delta. The Democrats want to give some tax savings to the company, That they are picking a fight on Republican grounds is somewhat dangerous. Shouldn’t Home Depot also get a tax break, given all the aid and charity it has provided in the Katrina recovery effort? Playing on the tax turf is risky, but smart.

So, what should be done? Should there be a special session to deal with Delta?

Chime in in the comments.

Technorati Tags: Delta, bankruptcy

12 comments

  1. stephaniemills21 says:

    Now, while I agree that Delta is too important to be ignored and needs help while it goes throught bankruptcy I am not moved by the call for increased tax cuts. The reality is that cuting their taxes will only help them out to the tune of like $40 million (rough) and while nothing to scoff at, is basically nothing when one consideres that Delta is about to spend over $100 million on lawyers alone in bankruptcy court. I think that the state and federal government can come up with some more innovative and truthfully better ways to help the company out, if they even should. A special session will do nothing but offer another publicity stunt, but this time it will be on the dems back.

    Now, as far as offering tax cuts to Home Depot, get a grip. Just because they want to help out through donations does not give justification for a tax cut. They are about to make a ton of money off all the increased building that will be hapening in the Gulf. Not to mention the fact that Delta (as well as almost every other freaking company and individual around) was offering relief to the victims of the hurricane. Do we all then get offered tax cuts when we have underfunded schools and ballooning deficits?

  2. The biggest help the government can give to American business is to nationalize their health care. It would immediately level the playing field with their international counterparts (whose governments assume pension and benefit costs) and it would also level the playing field for small business — they’d be at no competitive disadvantage against their larger peers in the benefits they could use to attract talent.

    Can the state of Georgia assume Delta’s pension costs? Doubtful. Delta’s debts (many of them to their own employees in the form of underfunded pensions) are massive (approaching $20 billion) which is greater than the annual state budget of Georgia. Only the federal government can and should assume such a large responsibility, and luckily for the workers (but unlucky for we taxpayers) the federal government will if it has to.

    To borrow a page from Sonny Perdue’s playbook, we could eliminate the fuel tax for airlines, although that creates problems. One of the reasons are fuel tax is so low is that the airlines (due to their huge volume of fuel usage) subsidize the low tax for drivers. If they no longer pay, Georgia drivers will have to pay more. I don’t think Sonny wants to raise the gas tax for drivers after temporarily eliminating it.

    So what can Georgians do? On the state level, we can prepare for layoffs and reduced salaries and benefits. The state should be mobilizing to make sure that Delta employees who see reduced salaries (or lose their jobs) can get their kids on Peachcare and can be retrained for new jobs in other industries. And on the federal level, Georgia politicians (of both parties) can use their alleged clout in Washington to bail out Delta (short term) and reform the things that got Delta into this trouble (energy policy and pension policy) to prevent it from happening to Delta or other Georgia companies. I’m not going to hold my breath on the latter.

  3. Bill Simon says:

    (Cough! Cough! Cough! Hackkkkk! Choke!)

    Talk about Left-Field thinking, Chrisis, telling us that the way to shore-up Delta is to nationalize the healthcare industry is about as dumb as saying (and, doing) that if we attack Iraq, it will save us from anymore 9-11s.

  4. Melb says:

    Not that I think that what Chris said was bad but Bill you should have said as dumb as [the right-thinking] (and, doing)………

  5. Bill, Delta has underfunded their pensions by $10.6 billion. That means that they have basically borrowed/stolen that amount from their employees, and we taxpayers will bail them out. Imagine a system where under pension reform Delta has to pay that money up front and can’t just keep getting the law changed to let them divert that money and then pass the buck to the taxpayers.

    Under a system where big corporations, small businesses and independents are treated equally, Delta would have to pay this money up front to a third party (doesn’t have to be the government necessarily) that would manage the pensions and healthcare. And, if Delta starts to have business troubles, they could file for bankruptcy when the trouble starts instead of plowing into $11 billion of their employees’ money.

    If the government is going to pick up the tab, we might as well pick up the inexpensive tab at the beginning instead of picking up the “we blew all the money” $11 billion tab at the end. Looks like the taxpayers got {edited – keep it clean please – Clayton}.

  6. Romegaguy says:

    Shouldnt the title of this piece be the Delta Senate Democrats because it wasnt the state party or the state Dem Reps that came out with it?
    Anybody know why the bill in the special session wasn’t engrossed on the House side but was on the Senate side. My guess is that they knew the House Dems werent smart enough to attempt to change the bill but maybe the Senate Dems would be.

  7. Hammertime says:

    The House rules allow for “closed” debate (no amendments) to be establishe by the Rules Committee. The Senate doesn’t have that rule. Ala the difference.

    Since when should taxpayers bail out the private sector? Would $50 million save them? $100 million? What if government sent them a bunch of money and they closed? Maybe – duh – we should wait and see what they actually need….

  8. Bill Simon says:

    Chrisis: You gave a cogent argument for how the pensions should be structured, but I don’t quite get how nationalizing our entire healthcare system will be the direct remedy for preventing airlines from going under.

  9. Ben King says:

    Bill – on a basic level, having a nationalized healthcare plan would mean one less thing with out-of-control price hiking for Delta to have to fund. Maybe enough that it could have kept them out of the hole long enough to get above water. If you are looking for someone to connnect the dots, thats the most basic way to do it, I’d think.

    I know you’ll ask me, “Why should the taxpayers have to take on this burden of paying Delta’s healthcare, isn’t that something the private world could handle better?”

    Basically, no. National healthcare can help keep rates lower, can provide greater oversight and accountability, and can eliminate a fair amount of red-tape, helping healthcare providers run the shop more efficiently.

    Remember, Mississippi recently lost industrial jobs to Canada in part because a Canadian factory would not have to pay for healthcare (the other main reason cited was education, an entirely different topic).

    One more thing – how much money do taxpayers put into airline companies? How much to airlines and airports get in tax breaks to build and expand runways, to bail out pensions, to help with fuel costs? And yet we insist that any new rail project ‘pay for itself’?? Everyone complains that Amtrak just can’t get it together. Give me a break, four of the biggest airlines in America are all under.

  10. Bill Simon says:

    But, nationalizing our healthcare system will mean turning our quality of healthcare to sh** (astericks typed by author). Do you want to get your knee worked-on by a doctor who has spent 10 years in Cuba or Canada? Or, would you rather have a doctor YOU can specify to visit in the U.S.?

  11. Ben King says:

    What?? Why would nationalizing health care prevent you from seeing specific doctors? Right now HMOs and insurance companies tell you which doctors you can see.

    Why couldn’t a national insurance plan cut away all those layers of bureacratic red tape and create a plan that every doctor, from New York to Georgia to Texas to California, would be on? Getting rid of that red tape might let hospitals and doctors focus on working for patients instead of insurance companies.

    I’m still not sure why you think that nationalizing health care would lower the level of care our doctors provide. Isn’t that really more about the quality (and funding) of our schools and management of our hospitals? How does making doctors and hospitals spend hours (and costs which get passed to patients) jumping through insurance company hoops and paperwork provide better treatment for patients??

  12. Ben King says:

    BTW, nice patriotic “Cuba/America” phrasing there. You almost had me thinking we were going to start shipping patients off to Castro.

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