US President Donald Trump is proposing to dramatically restructure both FAA and the Transportation Security Administration (TSA), removing air traffic control (ATC) from FAA and shifting the majority of responsibility for funding aviation security to airline passengers by significantly raising the flight ticket security fee.

The Trump administration’s “budget blueprint,” released March 16 for fiscal year 2018 starting Oct. 1, 2017, provides “lawmakers and the public with a view of the priorities of the president and his administration,” White House Office of Management and Budget (OMB) director Mick Mulvaney wrote in an introduction to the document.

ATC restructuring

The Trump administration, as part of a plan to reduce non-defense discretionary spending by $54 billion, is calling for a 13% decrease, or $2.4 billion reduction, in the Department of Transportation (DOT) budget compared to fiscal year 2017 ending Sept. 30, 2017. Included in the DOT proposal is the administration’s support for moving “the air traffic control function of the Federal Aviation Administration to an independent, non-governmental organization, making the system more efficient and innovative while maintaining safety,” the blueprint stated, adding, “This would benefit the flying public and taxpayers overall.”

The White House’s backing of separating ATC from FAA provides a powerful ally to proponents of such a plan, including US mainline airlines (minus Delta Air Lines), air traffic controllers and House of Representatives Transportation and Infrastructure Committee chairman Bill Shuster (R-Pennsylvania). Shuster’s proposal to create an independent, not-for-profit ATC entity ran aground last year, in part, because of opposition in the Senate and neutrality from the Obama administration, which took no position on Shuster’s plan.

FAA’s authorization, temporarily extended last year, expires Sept. 30, 2017. The budget blueprint indicates Trump wants to see a multiyear FAA reauthorization that includes separating ATC from FAA.

Shuster praised Trump for including the FAA proposal in the budget blueprint. “By removing the ATC function from the FAA, Americans will see a more efficient system, flight times decrease, on-time departures increase, emissions reduced, and 21st century technology deployed to guide our planes from gate to gate,” he said in a statement. “On top of that, the FAA will be able to focus on safety and robust oversight of the new not-for-profit service provider. For too long, the federal government has been the impediment in updating our ATC operation to a world-class, state of the art system … Like any transformative change in Washington, entrenched interest groups will do and say anything to protect their parochial interests. But the facts are not on their side. The president’s budget rejects adherence to the status quo and I applaud his leadership to disrupt the old way of thinking.”

IATA also offered its support for Trump’s backing of the ATC reform proposal. “The air transport system is vital to the American economy, but the US is falling far behind in the introduction of new and more efficient ATC technology to cope with the nearly 500 million more passengers expected to travel by air to, from and within the US by 2035,” IATA said in a statement. “Furthermore, the constraints of the federal budgetary, managerial and procurement processes create enormous structural hurdles to modernization. Now is the time to move forward with transformation in the US through the creation of a separate, corporatized non-profit entity to manage US skies.”

Airlines for America (A4A) called Trump’s ATC proposal a “bold step that will lead to the governance and funding reforms needed to move our air traffic control infrastructure into the 21st century,” adding, “Our system is safe, but it is outdated and not as efficient as it should—or could—be. We need to stop accepting pockets of progress and put in place a modernized system that better serves the traveling and shipping public.”

The budget blueprint also seeks to save $175 million from DOT’s budget by completely eliminating the Essential Air Service (EAS) program, which was established in the 1970s to subsidize airlines’ flights on routes to rural markets that otherwise would not have commercial air service. “EAS flights are not full and have high subsidy costs per passenger,” the Trump budget blueprint stated. “Several EAS-eligible communities are relatively close to major airports, and communities that have EAS could be served by other existing modes of transportation.”

Passenger security fee hike

The Department of Homeland Security (DHS), unlike most federal departments, would get an increase in appropriations under Trump’s fiscal year 2018 budget plan—a $2.8 billion, or 6.8%, increase from fiscal year 2017. But the added funding is aimed at immigration enforcement activities and not TSA, which the administration said should refocus on its “core mission” of airport security checkpoint screening and “ensuring federal security standards are enforced throughout the transportation system.”

Under the Trump budget plan, the airline passenger security fee would be raised “to recover 75% of the cost of TSA aviation security operations,” according to the blueprint document. The security fee, implemented after 9/11, is currently $5.60 per one-way trip for all flights departing from a US airport, a raise from $2.50 that was enacted in 2013. Under legislation passed by Congress in 2014, the fee cannot exceed $11.20 for a roundtrip ticket. TSA has said aviation security expenses totaled just over $6 billion in fiscal year 2016, $2.2 billion of which was covered by offsetting aviation security collections—well under 50%, let alone 75%.

Even if every dollar of flight ticket passenger security fees (totaling $3.7 billion in fiscal year 2016) were allocated to airport security screening—which is not currently the case—there would still be a substantial shortfall to get to funding 75% of aviation security expenditures.

A4A “stands in firm opposition to tax increases that further burden consumers and risk deterring air travel,” an A4A spokesperson told ATW in an emailed statement. “US aviation and our customers are already subject to 17 federal aviation taxes and ‘fees’, in addition to standard corporate taxes. In fiscal year 2016 alone, special US taxes on airlines and their customers totaled approximately $23.1 billion—more than $63 million per day. Tax increases are not the answer.”

The A4A spokesperson noted that the 2013 rise in the security fee diverted some of the funds collected as part of the fee to “to offset deficit spending, [meaning] that the traveling public will pay $13 billion in security fees over the next 10 years that won’t actually be spent on TSA.”

The budget blueprint said $80 million will be saved by eliminating and reducing “unauthorized and underperforming programs administered by TSA.” Importantly, this includes the “elimination of TSA grants to state and local jurisdictions, a program intended to incentivize local law enforcement patrols that should already be a high priority for state and local partners,” the blueprint stated. That likely means state and local governments would face a greater funding burden regarding airport security not related to screening checkpoints, such as perimeter patrols.

The budget blueprint does call for the National Aeronautics and Space Administration (NASA) to receive $624 million for aeronautics research and development, with a particular focus on “eventual over-land commercial supersonic flights and safer, more efficient air travel.”

The Trump budget blueprint sets the stage for what is expected to be a robust debate in Congress this year on federal spending for the next fiscal year.

Aaron Karp aaron.karp@penton.com