Obama Plans $32 Billion in Air Traveler Fees to Cut Debt

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Airport security. (Courtesy eyeliam/flickr)

President Barack Obama's spending proposal for fiscal year 2013 calls for the federal government to collect about $32 billion in fees from airline passengers over the next decade, reports Reuters. That's a hike of about $25 billion in fees.

Most of the money would be set aside to reduce the national debt, instead of being spent on airport safety or construction. About $18 billion of the fresh $25.5 billion in proposed fees would go to US debt reduction, according to the Wall Street Journal.

The plan, announced today would require the okay of the House of Representatives, and the instant analysis from political bloggers was that the proposed fees are dead-on-arrival in the Republican-controlled House.

But budget negotiations have a way of taking surprising turns. The proposed fees would double the "passenger security fee" to a minimum of $5 per one-way trip, from as low as $2.50 that's typical today for nonstop flights. The fee would rise over time to about $15 round-trip, according to Dow Jones Newswires.

"It makes absolutely no sense [to] discourage flying by trying to balance the budget on the backs of airline customers with yet another tax," Nicholas E. Calio, president of Airlines for America, lobbyists for big US airlines.

The Administration defends its proposed hike in the terrorism-security fee by saying that the current system doesn't cover the costs of funding the TSA. Today, the passenger fee ($5 max each way), covers less than half of the Transportation Security Administration's aviation security costs. In other words, the TSA is funded out of other non-transportation related sources, so air travelers are footing less than half the bill for security services they take the most advantage of, according to the president's budget, as quoted by Dow Jones Newswires.

Airlines would also be hit with fees of about $100 per flight, which would be incrementally passed on to passengers in the form of higher ticket prices. Administration officials are insisting on this as "non-negotiable."

President Obama’s budget also calls for nearly $30 billion more than the amount proposed by the House and Senate’s rival plans, notes the Journal of Commerce. The bigger-spending Obama plan would include a major investment in high-speed rail. This money would come out of other tax revenue, not the fees discussed above. This White House plan is also unlikely to pass through Congress, say political analysts.


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