FSM Congress Overrides Veto, Provides $1,000,000 To Our Airline

Pacific Islands Development Program, East-West Center With Support From Center for Pacific Islands Studies, University of Hawai‘i

News Release

FSM Information Services Palikir, Pohnpei, FSM

June 9, 2014

A supplemental appropriation for the FSM Congress included an amount of $1,000,000 earmarked as a subsidy for Our Airline to extend services to the states of Kosrae and Pohnpei in the Federated States of Micronesia.

Our Airline is the former Air Nauru, the flag carrier airline for the Republic of Nauru with air service that connects the Marshall Islands to the South Pacific region and Australia.

In April, President Manny Mori line-item vetoed the subsidy request included as part of an amendment bill to Public Law 18-15, the fiscal year 14 budget law. Congress took no action in response to this decision to veto at that time.

Later, the subsidy request reappeared during the final days of the recently concluded 4th regular session in Congressional Act 18-66, "to appropriate a supplemental budget of $1,294,000." Out of this amount, $1 million was appropriated for the airline service and $294,000 was appropriated for congressional representation fund. President Mori maintained his decision to veto the $1,000,000 air service subsidy and signed into law the representation fund portion of the Act.

Mori stated his reasons for deciding to veto the subsidy in his May 28th message to Congress:

"While I agree on the importance of seeking air service alternatives for our nation, I prefer that we wait for the Airline Task Force to conduct and submit a cost-benefit analysis to support the $1,000,000 subsidy, as explained in my transmittal of Public Law 18-54. Absent this analysis, I am again compelled to line item veto the $1,000,000 appropriation for the airline subsidy. As a matter of fact, there is no committee report that explains the rationale for the airline subsidy and the strategy employed to recoup it. Also, there is no justification given as to why two states could not be accommodated in the subsidized airline services. These are major considerations that require in-depth analysis before the National government can knowingly commit its resources."

In response, the FSM Congress chose to override the president’s veto, which in effect, has made available the appropriation of $1,000,000 to Our Airline to be taken out of the general funds of the FSM for the fiscal year ending September 30, 2014.

A May 30th Congressional Standing Committee Report No. 18-162 states:

"Your Committee on Ways and Means held a meeting on May 29, 2014, to discuss the grounds for the line item veto. Your Committee notes that the reason stated in the veto message did not say there was a lack of funds available for the airline subsidy. Furthermore, your Committee notes that the veto message did not point to a problem with the drafting or raise a legal/constitutional objection to the airline subsidy. The veto message merely questioned the economic wisdom of the subsidy that your Committee had already determined was in the best interest of the FSM."

The report added, "Your Committee assumes therefore that the line item veto is merely the result of some policy decision. Your Committee has revisited the items subjected to veto, has found the vetoed items to be consistent with sound public policy, and therefore disagrees with the decision to veto."

Whether in response to the oresident’s request for a cost-benefit analysis or for some sort of guidance, Congress has not made available for public understanding of its determination that the $1,000,000 subsidy to Our Airline is "in the best interest of the FSM" as the Committee report underscores.

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