Executive
Waste of the Day: Throwback Thursday: FAA Bails Out Airline Loans
In 1983 the Federal Aviation Administration bailed out several bankrupt airlines by letting them default on $47 million in loans.
In 1983, the Federal Aviation Administration landed a $47 million default on the taxpayer — $132 million in 2023 dollars — to bail out bankrupt airlines.
For this wasteful spending, Sen. William Proxmire, a Democrat from Wisconsin, gave the FAA a Golden Fleece Award in 1986. He gave awards to wasteful and nonsensical spending, eventually handing out 168 Golden Fleece Awards between 1975 and 1988.
Airlines used the FAA’s federal-guaranteed loan program to buy airplanes and parts. The program ended in 1983, when it began paying out $47 million to cover defaults.
“This sounds like ‘plane’ nonsense to me,” Proxmire quipped then. “The taxpayers should be making a flap over this loss.”
The money came straight form the U.S. Treasury, not paid by some sort of airline user fee or tax.
When airline deregulation began in 1978, removing federal control of fares, routes, and more, this FAA loan program ran into turbulence.
“Market demand, instead of bureaucratic decisions started determining which airlines would prosper,” Proxmire noted. “What had been a comfortably settled industry was thrown into turmoil. The taxpayers are paying for part of that turmoil.”
He listed nine airlines that most Americans today have never heard of all, all which had defaulted on their loans and were bailed out by the U.S. government.
“These loans have put the government in a ‘heads, they win, tails, we lose’ situation,” the senator said. “Some air carriers are going to make a bundle from deregulation. Their owners will win. What about the losers?”
The #WasteOfTheDay is brought to you by the forensic auditors at OpenTheBooks.com.
This article was originally published by RealClearInvestigations and made available via RealClearWire.
Adam Andrzejewski (say: Angie-eff-ski) was the CEO/founder of OpenTheBooks.com. Before dedicating his life to public service, Adam co-founded HomePages Directories, a $20 million publishing company (1997-2007). His works have been featured on the BBC, Good Morning America, ABC World News Tonight, C-SPAN, The Wall Street Journal, The New York Times, USA Today, FOX News, CNN, National Public Radio (NPR), Forbes, Newsweek, and many other national media.
Today, OpenTheBooks.com is the largest private repository of U.S. public-sector spending. Mission: post "every dime, online, in real time." In 2022, OpenTheBooks.com captured nearly all public expenditures in the country, including nearly all disclosed federal government spending; 50 of 50 state checkbooks; and 25 million public employee salary and pension records from 50,000 public bodies across America.
The group's aggressive transparency and forensic auditing of government spending has led to the assembly of grand juries, indictments, and successful prosecutions; congressional briefings, hearings, and subpoenas; Government Accountability Office (GAO) audits; Congressional Research Service (CRS) reports; federal legislation; and much more.
Our Honorary Chairman - In Memoriam is U.S. Senator Tom Coburn, MD.
Andrzejewski's federal oversight work was included in the President's Budget To Congress FY2021. The budget cited his organization by name, bullet-pointed their findings, and footnoted/hyperlinked to their report.
Posted on YouTube, Andrzejewski's presentation, The Depth of the Swamp, at the Hillsdale College National Leadership Seminar 2020 in Naples, Florida received 3.8 million views.
Andrzejewski has spoken at the Columbia School of Journalism, Harvard Law School and the law schools at Georgetown and George Washington regarding big data journalism. As a senior policy contributor at Forbes, Adam had nearly 20 million pageviews on 206 published investigations. In 2022, investigative fact-finding on Dr. Fauci's finances led to his cancellation at Forbes.
In 2022, Andrzejewski did 473 live television and radio interviews across broadcast, major cable platforms, and radio shows. Andrzejewski is the author of The Waste of the Day column at Real Clear Policy. The column is syndicated by Sinclair Broadcast Group, owners of nearly 200 ABC, NBC, CBS, and FOX affiliates across USA.
Andrzejewski passed away in his sleep at his home in in Hinsdale, Illinois, on August 18, 2024. He is survived by his wife Kerry and three daughters. He also served as a lector at St. Isaac Jogues Catholic Church and finished the Chicago Marathon eight times (PR 3:58.49 in 2022).
Waste of the Day articles published after August 18, 2024 are considered posthumous publications.
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