Congressioanl Observer March 2005
In his State of the Union message to Congress, President Bush laid out the broad and ambitious objectives and goals the administration hopes to achieve during his second term. Topping the list was social security reform, for which the President sketched out options but acknowledged that it would be up to Congress to thrash out the details of any proposed legislation. The President noted that small businesses must be free of needless regulation and protected from junk lawsuits. He also touched on an energy strategy that would encourage conservation and development of alternative sources.
Next on the President’s agenda was sending Congress a proposed $2.57 trillion budget for FY 2006 that would eliminate some 150 politically sensitive programs. Of concern to aviation were the administration’s requests for $3 billion for the Airport Improvement Program, $500 million less than the amount authorized in the FAA reauthorization Vision 100 and $2.448 billion for the FAA’s facilities and equipment budget, $600 million less than the previously authorized figure.
The administration’s long-term goal is to reduce the budget deficit by half by 2009. When it comes down to which of the 150 programs should be eliminated, legislators may very well balk if any of the proposed programs will have an effect on their constituencies. Last year, the administration targeted 65 programs for elimination and Congress axed just five.
Several legislators have already gone public and declared it is unlikely that more than a dozen of the 150 proposed cuts will leave congressional holding patterns. House Minority Leader Nancy Pelosi (D-Calif.) said, “The President’s budget is a hoax on the American people. The spending blueprint is fiscally irresponsible, morally irresponsible and a failure of leadership.”
Airline travelers may be in for an increase in taxes, as the administration will propose raising the security fee from $2.50 to $5.50 for a one-way airline ticket and from a maximum of $5 to $8 for multiple-leg trips. Justification is that the increase will create an additional $1.5 billion for the Transportation Security Administration. A report issued last year by the Government Accountability Office indicated that airlines and passengers pay 13 major taxes and fees. The report estimated that those fees would produce a revenue of $15.8 billion this year. Airlines will oppose the increase because they cannot justify raising fares and passengers will object to higher fare costs.
The Joint Committee on Taxation, at the request of the chairman of the Senate Finance Committee, issued a study titled “Options to Improve Tax Compliance and Reform Tax Expenditures,” a 435-page document that includes options for tax reform to include expansion of limitations on the personal use of business aircraft to “all” employees. The American Jobs Creation Act of 2004, passed last fall, imposed limitations on the personal use of business aircraft only by “covered” employees, defined as officers, directors and those who owned 10 percent or more of private and public companies. Copies of the report are available at the NBAA Web site at http://web.nbaa.org/public/govt/2005/JCS-02-05.pdf.
Legislators have not been idle since the start of the 109th Congress in late January. At press time there were 323 bills introduced in the Senate and 676 in the House.
• S.170, introduced by Sen. Lisa Murkowski (R-Alaska), would clarify the definition of rural airports.
• S.171, introduced by Sen. Lisa Murkowski (R-Alaska), would exempt seaplanes from certain transportation taxes.
• S.217, introduced by Sen. Jeff Bingaman (D-N.M.), would preserve the essential air service program and ensure that communities that had commercial air service before airline deregulation would continue to receive scheduled service.
• H.R.455, the Airport Noise Curfew Act of 2005, introduced by Rep. Joseph Crowley (D-N.Y.), would establish a commission to study and make recommendations to Congress regarding the establishment of curfews on nonmilitary aircraft flying over populated areas of the U.S. during normal sleeping hours.
• H.R.488, introduced by Rep. Steve Pearce (R-N.M.), would promote greater access to air transportation for all by permitting a public charter operator operating under part 380 of Title 14, Code of Federal Regulations, to use any direct air carrier certified under FAR Parts 121 or 135, either alone or in combination with other such direct air carrier, in conducting public charters. The bill would also make provision for public charter operations in turbine-powered aircraft with nine or fewer passenger seats under FAR Part 135 under certain conditions.