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Wed, Apr 30, 2008

OMB Threatens Trouble For FAA Reauthorization Bill

Says Capacity Cap Limits, No User Fees Could Spell Veto

As the aviation world counts down to the Senate vote on the FAA reauthorization bill, there's a renewed veto threat on the legislation from the White House.

On Tuesday, the Office of Management and Budget said the Bush administration would refuse any FAA funding plan that included limits governing the Department of Transportation's ability to impose caps on traffic at congested airports like LaGuardia, Philadelphia and Newark... and that doesn't include language hinting at a future move towards user fees.

As ANN reported, in January DOT moved to allow individual airports to charge higher landing fees during busier times. DOT Secretary Mary E. Peters said the new policy, once implemented, would allow airports to curb delays through imposing fees on airlines landing at airports at peak times -- a practice that, in theory anyway, should result in flights being spread out throughout the day.

Not surprisingly, that plan is opposed by the Air Transport Association, lobbying group for the nation's biggest airlines. But the plan has drawn the ire of the Aircraft Owners and Pilots Association, as well... which fears it would be slippery slope from higher charges for air carriers, to imposing similar charges on general aviation traffic.

Several lawmakers are also against congestion pricing, saying it would reduce the amount of choice available to consumers... but in a Statement of Administrative Policy issued Tuesday, OMB says any language in the FAA reauthorization bill to curb such congestion pricing would spell an end to the funding plan, period.

"The Administration strongly opposes any attempt to limit the Department of Transportation’s legal authority to manage aviation congestion at the Nation’s most crowded airports," OMB writes. "Restricting the Department’s authority would hurt passengers by locking-in the large and growing congestion and delay problems. It would also limit the Department’s ability to protect competition, which in turn helps promote quality passenger service and lower fares."

OMB adds any attempt "to delay or otherwise suspend implementation of" a controversial New York-New Jersey-Philadelphia airspace redesign plan, meant to bring greater efficiency to routing flights into and out of area airports, would also mean defeat of the funding plan at the hands of the president.

Most ominously for general aviation, however, OMB also reiterated the administration's support of broad user fees for all users of the nation's air traffic control system. Both the House version of the FAA funding bill -- approved last September -- and the Senate plan currently under consideration include hikes in fuel taxes to cover the costs of implementing the FAA's touted "NextGen" air traffic control system.

The bills do not include additional user fees, however, for such matters as filing flight plans, or certifying pilots and aircraft. The White House wants those fees, to curb what it calls "the current inequitable tax system" it says "could shift aviation costs away from the system’s users and onto the shoulders of taxpayers.

"The proposed substitute does not include much-needed aviation financing reforms to more efficiently and effectively spend taxpayer money on air traffic control services," the OMB writes, under the heading 'Perpetuation of Inefficient Funding Mechanisms.'

"The Administration appreciates that the bill takes some steps in moving the contribution from business jets towards a level that is more reflective of those aviation users’ fair share of the costs," OMB adds. "However, given that the bill does not include any of the other necessary cost-based financing reforms for air traffic services or cost-based registration and certification services, the fuel tax increases alone reflect an unsound financing policy. These tax increases are designed to facilitate increased spending above proposed levels and are would be part of a system that, at bottom, does not reflect true system costs."

The Senate could being debate on its FAA funding bill as soon as Wednesday afternoon... with a vote coming by the end of the week. If approved, the Senate plan would need to be reconciled with the House version of the bill, before heading to the president's desk for approval or rejection.

FMI: Read The OMB Statement (.pdf)

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