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"White House Threatens Veto of FAA Reauthorization Bill"

Thursday, September 20, 2007

White House Threatens Veto of FAA Reauthorization Bill 
By Kathryn A. Wolfe
Congressional Quarterly Today 

The White House, upset that Congress is refusing to drastically alter the
current system of aviation fees and taxes to pay for modernization of the
air traffic control system, on Wednesday threatened to veto a House
reauthorization of the Federal Aviation Administration. 

The threat, issued in a statement of administration policy by the Office of
Management and Budget, was no surprise. The administration has been pressing
lawmakers to tie the FAA's revenues more directly to the costs imposed on
the system by its various users.

The statement said the bill (HR 2881) headed to the House floor on Thursday
"falls far short of providing critical reforms proposed by the
administration. Indeed, it would make the status quo worse by undoing
progress achieved in prior Congresses."

The White House wants to replace the current system of fuel and ticket taxes
with new fees that would be more closely tied with actual usage of the air
traffic control system, such as per-flight charges based on distance
traveled. The administration said such a shift is necessary to fund system
upgrades to handle increasing volumes of air traffic.

But House members balked at that approach. On Tuesday, the House Ways and
Means Committee approved by voice vote a measure (HR 3539) that would raise
aviation fuel taxes from 19.3 cents per gallon to 24.1 cents per gallon. The
new revenue would be dedicated to air traffic control modernization.

The proposal is expected to be added to the broader FAA reauthorization bill
prior to floor consideration.

Airport Improvements 

On another issue that affects air traffic congestion, airport lobby groups
are urging the House to support a proposal that would allow airports to levy
bigger fees on plane tickets to help pay for capital improvements such as
new runways.

The bill headed to the House floor would raise the cap on fees airports can
levy for improvements -- called Passenger Facility Charges (PFC) -- from
$4.50 per leg of a flight to $7 per leg. The underlying bill would also
reauthorize the Federal Aviation Administration through fiscal 2011.

"By allowing a small increase in a locally-based user fee, airports can fund
capital improvement programs that reduce delays, enhance safety, promote
competition and general economic development," said Airports Council
International - North America (ACI-NA) President Greg Principato. The group,
which represents airport governing bodies, also has backing from the
contracting lobby and groups such as the National League of Cities.

But when the House Rules Committee takes up a rule for floor debate on the
reauthorization bill Wednesday afternoon, Texas Democrat Nick Lampson and
Republican Ted Poe, who represent Houston, where Continental Airlines is
based, will seek permission to offer an amendment that would strike the

And the nation's airlines, which usually oppose any new fee or tax that
raises the price of a plane ticket, argue that raising the PFC cap would
unfairly drive up costs for passengers. 

During a Tuesday rally on Capitol Hill sponsored by the Air Transport
Association, the airlines' lobby group, Lampson said fighting the increase
is a matter of protecting consumers.

"That's a pretty big hit for families traveling to see loved ones during the
holidays and, in some cases, enough to prohibit a family vacation," Lampson

However, not all airports charge the capital improvement fees. According to
the Transportation and Infrastructure Committee, about 58 percent of the 561
commercial service airports permitted to charge PFCs actually do. Of those,
the majority charge the maximum allowed.

Backing the airport lobby, James L. Oberstar, D-Minn., and John L. Mica,
R-Fla., the chairman and ranking member of the House Transportation and
Infrastructure Committee, on Tuesday fired off a "Dear Colleague" letter
urging opposition to the amendment. 

Oberstar and Mica said the fee hike could generate more than $1 billion in
additional revenue for capital improvements such as runway expansions at a
time when congestion and flight delays are at their worst levels since the
government started collecting data.

The Rules Committee was expected to issue ground rules later Wednesday for a
Thursday floor debate of the FAA bill. 

Senate Finance Markup 

The Senate Finance Committee plans to mark up the financing portion of its
FAA reauthorization (S 1300) Thursday.

Senate Finance Chairman Max Baucus, D-Mont., is proposing a different
approach to generating more revenue for the air traffic control system.

His draft proposal would increase fuel taxes for private jets from 21.8
cents per gallon to 36 cents, to produce about $203 million per year through

The draft would repeal a 7.5 percent ticket tax on "fractionals," or partial
ownership shares of an airplane, and replace it with a flat $58 per flight
departure tax, yielding about $54 million per year over the four-year

The Baucus plan would raise the international air passenger tax of $15.10
per arrival or departure to $16.50 each way, indexed for inflation. That
would provide approximately $135 million per year.

And his plan would subject domestic legs of international flights to the 4.3
cents per gallon commercial fuel tax.

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