White House Threatens Veto of FAA Reauthorization Bill

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.

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 increase.

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 said.

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.

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 2011.

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 reauthorization.

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.

Source: CQ Today Round-the-clock coverage of news from Capitol Hill. ©2007 Congressional Quarterly Inc. All Rights Reserved.