January 5, 2009
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| THE SOURCE FOR PUBLIC TRANSPORTATION NEWS AND ANALYSIS |
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Lawmakers Continue to Press for SILO/LILO Relief
Shortly before Congress recessed for the holidays, 31 members of the U.S. House of Representatives and two Senators sent a letter to President Bush, asking him to consider applying comparable “deliberations and actions” as he did in authorizing financial rescue and recovery funds to prevent GM and Chrysler from collapsing toward the SILO/LILO issue.
In the letter co-signed by U.S. Reps. James P. Moran (D-VA) and Chris Van Hollen (D-MD), the officials asked the President to direct the U.S. Treasury to intervene in SILO/LILO transactions to protect transit agencies from technical defaults caused by the downgraded credit ratings of AIG and other guarantor agencies.
The letter read in part: “We would very much hope that you would consider, as part of your Administration’s deliberations and actions, comparable actions to provide any affected transit agency lessee of ‘qualified transportation property’ an option to request that your designee (the government) serve as guarantor of the lessee’s obligations. As we had agreed in [H.R. 7321, the Auto Industry Financing and Restructuring Act, which passed the House but was defeated in the Senate], under this provision, the government would set the terms and conditions of such a guarantee within the next 14 days and would provide authority to the government terms and conditions, including a fee to recoup within three years any payments the government made to such a lessor in its role as guarantor … During this difficult period, Section 18 of the Auto Industry Financing and Restructuring Act reflects a bipartisan consensus that public transit agencies should not suffer collateral damage as a result of credit downgrades in the financial industry that the transit systems did not cause and which have nothing to do with their ongoing operations.”
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