President Barack Obama on Feb. 26 announced his proposed federal government budget for fiscal year 2010, including a higher air passenger security fee (effective 2012), $800 million for development of the NextGen air traffic control system and $5 billion for high-speed rail grants. Debates over whether and by how much the passenger security fee should be raised (the increase was not detailed in the initial budget proposal), and if proposed NextGen funding is sufficient are just two of many government-related issues the travel industry currently is examining.
The NextGen ATC system is a topic on which several travel associations for months have focused attention. After industry constituents were disappointed that funding for NextGen was not included in the federal economic stimulus bill, Obama's budget earmarked $800 million to transition "from a ground-based radar surveillance system to a more accurate satellite-based surveillance system," which would allow for "more efficient routes through the airspace" and "improvements in aviation weather information."
An airline industry lobby group, the Air Transport Association declined to comment on whether it sees the $800 million as an appropriate amount at this point. "Until we see the particulars of the NextGen proposal, it would be premature to comment," according to a spokesman.
Officials from airlines contacted by Management.traveldirected inquiries to ATA, though a Southwest Airlines spokeswoman said the airline was "pleased to see the administration highlighting the need for the FAA to modernize the nation's air traffic management system."
An American Airlines spokesman added that AA "has previously said that the government needs to get started on the NextGen ATC system as quickly as possible."
"The $800 million is a start, but much more is needed--now--to begin the necessary processing of building and installing our nation's NextGen air traffic control system," according to a JetBlue Airways representative.
Meanwhile, according to the proposed budget, an increase in the air passenger security fee (known to many as the 9/11 fee, currently set at $2.50 per leg) "will offset costs associated with Transportation Security Administration screening of aviation passengers, as the current fee only captures 36 percent of the cost of aviation security."
Several have stated opposition. "The Obama administration is attempting to fund the lion's share of airport security through a user tax, primarily paid by corporations commissioning business travel, or leisure travelers spending limited personal funds for a vacation," according to a statement by Susan Gurley, executive director of the Association of Corporate Travel Executives. "Air transportation is a national asset vital to the economy. The nation has an obligation to protect itself and this asset. Airport security should be paid for from the general tax fund. Every increase in business travel charges results in another percentage of canceled trips, which the country cannot afford."
The National Business Travel Association agreed. "Travelers should not shoulder the weight of this national security priority," according to a statement by NBTA president and CEO Kevin Maguire. "At a time when the economy is hurting, it is especially dangerous to discourage travel by increasing travel taxes."
ATA also opposes the "9/11 fee" and "especially" any increase to it. "Aviation security is a government responsibility with all costs borne by the government--and not a responsibility of airlines or airline customers," according to an ATA spokesman.
Said the Southwest spokeswoman, "Overall, we feel the industry is over-taxed."
The JetBlue official said the air security fee "should not be raised on the backs" of passengers, instead suggesting the current security funding balance between consumers and the government "should remain as it is."
Meanwhile, the administration proposed a five-year, $5 billion high-speed rail state grant program, "building on the $8 billion down payment" included in the federal economic stimulus bill. According to the budget, the proposal "marks a new federal commitment to give the traveling public a practical and environmentally sustainable alternative to flying or driving. Directed by the states, this investment will lead to the creation of several high-speed rail corridors across the country linking regional population centers."
Beyond The Budget
Representatives for the U.S. Travel Association and NBTA on Feb. 19, during presentations at The Masters Program in Washington, D.C., suggested the Obama administration would, in some ways, positively impact the travel industry. Both USTA CEO Roger Dow and NBTA government affairs consultant Stewart Verderywere encouraged that Obama would improve the United States' outreach efforts and deliver to the world a more welcoming message. They both also praised the appointments of Janet Napolitano as U.S. Department of Homeland Security Secretary and Hillary Clinton as Secretary of State.
However, Verdery noted that while Napolitano is in place at DHS and Ray LaHood has been installed as Transportation Secretary, "We don't know who is running the Transportation Security Administration or Customs and Border Protection. We don't know who is running the FAA, the Highway Administration and other key agencies."
Top among the other issues that NBTA is tracking--and has been involved in for years--is taxation, or what the association describes as "discriminatory" taxes especially on car rentals. "Travel taxes are an easy target, so we have been playing whack-a-mole around the country, with Idaho the most recent to pop up with a huge travel tax," Verdery explained. "There have been others, including Colorado and New Jersey. They are not going away. It is a state-by-state fight. We hoped to have federal legislation, but with the mayors now having more pre-eminence in Washington under an Obama administration, getting federal legislation to stop cities and states from using their tax authority is going to be quite a struggle."
The "more promising" issue, Verdery continued, is related to taxes on unused airline tickets. "The airlines don't want to give it back to you because it's too much of a hassle," he said. "We are pushing very hard to make that happen, hopefully through a rulemaking or legislation mandating that you get the money back. It may not be much on one ticket, but when you have a million tickets, it adds up."
Another item of interest for NBTA is the domestic Registered Traveler program. TSA last summer ended security prescreening threat assessments, largely invalidating the program's risk management function. "It is just a front-of-the-line program right now, and we have said that is not the right model," Verdery said. "This will be a hot issue for this next TSA administrator. It will be a tipping-point year for Registered Traveler."
Other items on NBTA's radar include expansion of the International Registered Traveler program and passenger rights legislation. On the latter, NBTA "opposes micromanagement" of the airlines by the federal government, Verdery said. "We think that will hold. Something will pass with that label on it; it is just a question of what."
Meanwhile, USTA's Dow specifically discussed improvements to visa processing--saying that "it is getting better, but we still have some work to do--and advocated a further expansion of the Visa Waiver Program. "We are now looking to Brazil, Argentina, etc.," he said. "That is critical."
When asked which politicians specifically are hindering U.S. visa policies, Dow responded, "Sen. Diane Feinstein [D-Calif.]. She says our visa policy in the United States is the soft underbelly of our security. If she had her way, she'd shut down the entire Visa Waiver Program. But Brazilians are not terrorists."