Spending deal does not hike EV credit, boosts aviation inspection funds

WASHINGTON (Reuters) – The U.S. Congress declined to extend a $7,500 tax credit for electric vehicles but will boost funding for aviation safety after two deadly Boeing 737 MAX crashes.

General Motors Co (GM.N) and Tesla Inc (TSLA.O) have been pushing for more than a year for extension of the credit, which phases out once an automaker hits 200,000 vehicles sold, and many lawmakers had been pushing to include the extension. The tax credit is aimed at defraying the cost of electric vehicles that are more expensive than similarly sized internal combustion engine vehicles.

Both GM and Tesla have already hit 200,000 EV sales. Senator Debbie Stabenow, a Michigan Democrat who authored a proposal to extend the credit, said Monday the EV proposal faced significant opposition from the White House, according to her office.

Tesla’s credit fell to $1,875 in July and will be zero after Dec. 31. GM’s credit fell to $1,875 on Oct. 1 will be zero after March 31.

Stabenow proposed in April granting each automaker a $7,000 tax credit for an additional 400,000 vehicles on top of the existing 200,000 vehicles eligible for $7,500 tax credits. A separate bill in the U.S. House proposed a smaller credit for used EVs.

In response to two Boeing crashes that killed 346 people and led to the grounding of the 737 MAX fleet, Congress will increase funding for aviation safety by $67 million, which is “targeted for hiring specialized staff with expertise in human factors; and increases training and credentialing requirements for safety inspectors.”

It also boosts funding to “improve the safety reporting database… and to promote U.S. safety standards with foreign civil aviation authorities through outreach and training.”

The Federal Aviation Administration’s certification of the MAX and its long-standing practice of delegating some tasks to Boeing has come under harsh criticism from lawmakers.

A report released in October said the FAA had just 45 people in an office overseeing Boeing’s Organization Designation Authority and its 1,500 employees.

The FAA’s office overseeing Boeing has just 24 engineers, some with limited experience, and they face a wide range of tasks to ensure compliance in overseeing Boeing’s 737, 747, 767, 777 and 787 programs.