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Thursday, February 19, 2009

Helicopters for the Prez

Do As I Say, Not As I Do: $400M Helicopters

As former President George Bush left office, the order to upgrade the Presidential fleet of Marine Corps helicopters was already underway.    Not just one helicopter, known a Marine One when it is carrying the President of the United States, but a fleet of 28 helicopters.   Cost of the deal: $11.2 Billion, or a mere $400 Million per helicopter.    Enough of a manufacturing project (or is that a pork spending project) for Lockheed-Martin to build a special manufacturing plant in New York State.    And the price tag?   This of the total general fund for the state of Colorado!   

So, will POTUS 44 cancel the order(s)?     According to press reports, “The order has become mired in delays and budget overruns. It was originally supposed to cost $6.1bn, but now stands at $11.2bn (£7.8bn) – about $400m per aircraft. That means that each new helicopter would cost more than the customized jumbo jet that flies the president under the banner Air Force One.

Such a display of conspicuous spending would clearly be awkward for Obama at a time of economic crisis, particularly after he reprimanded US chief executives for their lavish ways. Citigroup, the stricken bank that has received $45bn of state support, recently cancelled an order for a new corporate jet costing $50m, after the White House objected that this was not the best use of money.”

So what has President Obama had to say about private sector CEO’s that have corporate jets and planes on order, such as US Banks that received government “bail out” money?

According to ABC News and the Huffington Post  member of the President’s staff and Mr. President himself were harshly critical of CitiGroup Bank and their corporate jet order.  

“The high-flying execs at Citigroup caved under pressure from President Obama and decided today to abandon plans for a luxurious new $50 million corporate jet from France... ABC News has learned that Monday officials of the Obama administration called Citigroup about the company's new $50 million corporate jet and told execs to "fix it."  ABC news quoted in the Huffington Post

In addition, the new $800 Billion “Pork-ulous” spending and tax break bill, we find a tax break for buyers of corporate aircraft.   According to AP news  

WASHINGTON (AP) -- Just a few months after lawmakers scolded auto executives for flying to Washington in private jets, Congress approved a tax break in the stimulus package to help businesses buy their own planes.

The incentive -- first used to help plane makers recover from the 2001 terror attacks -- sharply reduces the upfront tax bill for companies who buy assets such as business planes.

The aviation industry, which is cutting jobs as it suffers from declining shipments and canceled orders, hopes the tax break in the economic-stimulus bill just signed by President Barack Obama will persuade more companies to buy planes and snap a slump in general aviation that began last year.

"This is exactly the type of financial incentive that should be included in a stimulus bill," said Rep. Todd Tiahrt, R-Kan. in an interview. His state lost at least 6,900 jobs at Cessna and Hawker Beechcraft, both based in Wichita.

Roughly 11,000 jobs have been cut in the last three months by the 65 or so member companies of the General Aviation Manufacturers Association, an industry trade group.

So the complex and tricky world of populism is coming back to haunt the new president.  What he says is for those big shot bank execs to not buy or use corporate jets.   But what Obama does is sign a Federal stimulus bill for tax breaks for those same buyers and…. it is likely that he’ll take delivery on a fleet of 28 Marine helicopters, costing $400 Billion each. Don’t want to loose all those jobs up in New York (Democrat) State!

So it is do as I say, not as I do for POTUS 44.  

© 2009, Jasper Welch, Four Corners Media,  

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