AIA President and CEO Urges Congressional Leaders to Pass Defense Authorization, Other Key Aerospace Priorities

Arlington, Va - Aerospace Industries Association (AIA) President and CEO Eric Fanning last week sent a letter to congressional leadership, urging them to use their end-of-year legislative sessions to pass key priorities, including the National Defense Authorization Act (NDAA), reverse a harmful research and development (R&D) tax law, and pass the 12 regular appropriations bills that will fund functions of the government critical to national defense and aerospace.

"As Congress begins its end-of-year legislative push, we look forward to working with you to advance priority legislation important to our industry, out workers and their families, and the U.S. economy," Fanning began. "This includes fiscal year (FY) 2025 government funding, the FY25 National Defense Authorization Act (NDAA), and legislation to restore the immediate deductibility of research and development (R&D) expenses for federal tax purposes.

"American servicemembers, the Department of Defense, and the defense industrial base depend on the authorities and guidance provided in the NDAA each year. This critical bill has been passed by Congress for each of the past 63 years. We urge you to continue that important tradition and pass a conference agreement by the end of the year.

"We feel strongly that restoring the same-year deductibility of R&D expenses is a commonsense policy to support American innovation," Fanning continues. "This is especially true for small businesses, which may have to choose between salaries or investing in R&D.

"Our warfighters and aerospace innovators are hindered by a stop-and-start government funding their vital activities for a few weeks at a time for the fiscal year, as we experienced in FY24. Industries like ours cannot hire, plan, or invest without an understanding of where the federal government will set its funding priorities."

You can read the full letter below or by clicking here.

November 15, 2024

Dear Speaker Johnson, Majority Leader Schumer, Republican Leader McConnell, and Democratic Leader Jeffries:

The Aerospace Industries Association (AIA) represents more than 300 of the leading aerospace and defense companies in the United States. These companies provide high-paying jobs to thousands of Americans in all 50 states, contribute billions to the U.S. economy, and are responsible for innovations that power and strengthen our military, create new achievements in space exploration, and make commercial air travel safer and more efficient.

As Congress begins its end-of-year legislative push, we look forward to working with you to advance priority legislation important to our industry, our workers and their families, and the U. S. economy. This includes fiscal year (FY) 2025 government funding, the FY25 National Defense Authorization Act (NDAA), and legislation to restore the immediate deductibility of research and development (R&D) expenses for federal tax purposes.

American servicemembers, the Department of Defense, and the defense industrial base depend on the authorities and guidance provided in the NDAA each year. This critical bill has been passed by Congress for each of the past 63 years. We urge you to continue that important tradition and pass a conference agreement by the end of this calendar year.

American innovators in A&D and other industries have been negatively impacted by tax law changes put into effect beginning in tax year 2022 that disallow the deduction of most R&D expenses in the year they occur. By stretching out these tax benefits over five years, companies are encouraged to invest capital in other areas that are more financially advantageous. We feel strongly that restoring the same-year deductibility of R&D expenses is a commonsense policy to support American innovation. This is especially true for small businesses, which may have to choose between paying salaries or investing in R&D. AIA members in the defense industrial base rely on this tax deduction to generate cutting-edge technology that protects our warfighters and helps maintain our global leadership in aircraft manufacturing, emerging aviation technologies, and commercial space.

Finally, it is critical for Congress to finalize the 12 regular appropriations bills before the end of this calendar year and not depend, once again, on lengthy continuing resolutions (CRs). Companies like our members that do business with the Department of Defense, the Federal Aviation Administration, and the National Aeronautics and Space Administration rely on timely, sufficient, responsible levels of government funding. This is especially important with a new administration entering the White House in January and a fiscal year 2026 budget due to Congress the following month.

Our warfighters and aerospace innovators are hindered by a stop-and-start government funding their vital activities for a few weeks at a time for six months of the fiscal year, as we experienced in FY24. Industries like ours cannot hire, plan, or invest without an understanding of where the federal government will set its funding priorities. Long CRs lead to months of stagnation and costly inefficiency that undermine our partnership with vital agencies and make it challenging to recruit new businesses into the defense sector. With the progress made thus far, we believe it is possible for Congress to finalize the FY25 appropriations bills this year, and we strongly urge that result.

AIA remains Congress' partner in these critical efforts. Please let me know how we can support you with this agenda as you finalize legislation for the 118^th Congress and prepare for the 119^th.

Respectfully,

Eric Fanning

President and CEO

Aerospace Industries Association

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