Airlines Lobby to Kill Plan for Higher U.S. Security Fee

Photographer: Andrew Harrer/Bloomberg

A traveler waits at a Transportation Security Administration checkpoint at Reagan National Airport in Washington, D.C. Close

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Photographer: Andrew Harrer/Bloomberg

A traveler waits at a Transportation Security Administration checkpoint at Reagan National Airport in Washington, D.C.

Eager to find new revenues to fend off automatic spending cuts next month, Republicans are embracing an increase to the so-called Sept. 11 security fee on U.S. airline tickets they’ve long resisted.

It’s one of the few money-raisers that has bipartisan support in budget negotiations, even as its surprise emergence mobilized resistance from airlines in the U.S. and abroad, the Air Line Pilots Association and the Consumer Travel Alliance.

“The threat of a TSA passenger tax increase is painfully real,” said Sean Kennedy, senior vice president, global government affairs at Airlines for America, a Washington-based trade group. “If there’s a deal assembled, there’s a strong chance we’ll be one of the core components.”

The Department of Homeland Security proposed raising the fee in its 2013 budget request to $5 per one-way trip, no matter how many stops, up from $2.50 per flight segment.

The fee was created as the Transportation Security Agency was set up in 2002. It has never been raised, even as the agency grew to more than 50,000 employees, added high-technology explosive scanners at airports throughout the country and expanded beyond checkpoint screening.

Fee collections peaked in 2007 and covered 25 percent of the TSA’s aviation security costs last year -- $1.88 billion of $7.48 billion. Increasing the fee to $5 per one-way trip would generate $317 million, the administration said. Airlines pay another security fee that totaled $380 million in 2012, according to TSA.

David Castelveter, a TSA spokesman, declined to comment, citing an agency policy against discussing pending legislation.

Earlier Efforts

Attempts to raise the fee have been made since President George W. Bush’s administration and “have garnered little congressional support,” the Congressional Research Service said in an October 2012 analysis. President Barack Obama’s proposals raising the fee have been rebuffed by Republicans, until now.

Lawmakers have told TSA Administrator John Pistole during budget hearings that the Department of Homeland Security’s proposal to raise the fee wouldn’t fly. The House Appropriations Committee called $122 million from the fee revenue in the 2013 budget an “unauthorized, fictitious offset.” Neither the Senate Commerce Committee nor the House Homeland Security Committee, which oversee the TSA, have held a hearing on a fee increase in the past two years.

TSA’s policy goal has been to offset about 80 percent of its aviation-security related costs through fees, according to the Government Accountability Office. Doing that would require an additional $4 billion, meaning a one-way fee of $14, the GAO estimated.

Fiscal Talks

Congressional budget negotiators are trying to undo the damage of this year’s across-the-board automatic budget cuts known as sequestration. The focus is coming up with a $50 billion to $100 billion deal by a Dec. 13 deadline to avert more cuts that both parties agree are hurting the military, scientific research and education.

Senate Democrats such as Budget Committee Chairman Patty Murray insist that new revenue be part of a deal. House Republicans, including Budget Committee Chairman Paul Ryan, oppose new taxes. Ryan’s alternatives include increasing the TSA fee, according to aides. Raising fees is seen as a bargaining chip to Republicans who have pledged to hold the line on taxes.

The negotiators are near a deal that relies on user fees to raise the federal spending cap to $1 trillion, instead of $967 billion, Representative Tom Cole, an Oklahoma Republican, said today. Budget experts estimate fee increases could save as much as $11 billion to avoid automatic cuts.

‘No Contest’

Raising the TSA security fee makes sense to government officials trying to find alternatives to cutting defense programs and senior citizen entitlements, said Josh Gordon, policy director at the Concord Coalition, an Arlington, Virginia group that advocates for responsible federal budgets.

The $2.50 fee hasn’t come close to covering the agency’s costs and boosting the fee so travelers pay a little more of their expenses is one of the low-hanging fruits available to Congress, Gordon said.

“If you’re making Americans choose between cuts to Social Security and Medicare and increasing airline fees, it really becomes no contest,” Gordon said.

Still, the airline sector isn’t taking the fee-increase quietly. The industry spent more than $20 million lobbying in Washington so far in 2013, according to the Center for Responsive Politics, a nonpartisan watchdog in Washington.

Lawmakers’ Scapegoat

Besides writing to lawmakers, Airlines for America fanned out at airports yesterday to speak with travelers and lawmakers returning to Washington. The group is handing out leaflets and air sickness bags with the message: are higher taxes on air travel making you ill?

“The needle that Republicans are trying to thread is being against new tax increases while still finding a way to raise revenue,” Kennedy said. “They’ve come up with a semantic argument that fees are not the same thing as taxes.”

The GAO Nov. 14 advised Congress to kill or limit TSA efforts to spot potential terrorists by observing behavior in airports, saying they’re ineffective and a waste of money. The agency has spent $900 million on those efforts since 2007, without detecting anyone who was later arrested on terrorism charges.

Even before that, it hasn’t been an easy year for TSA with Congress. A plan to allow pocket knives on airplanes was harshly criticized by airlines, flight attendants and its own screeners -- and their lawmaker backers -- leading TSA chief Pistole to pull back three months later.

TSA Efficiencies

TSA has also drawn criticism in Congress over its equipment purchases and inability to create a reliable biometric identification card for port workers. Critics such as Representative John Mica, the Florida Republican who sponsored legislation creating the TSA in 2001, have called the agency bloated and pushed for airport screening to be privatized.

A temporary 1993 aviation fuel surcharge adopted as part of a budget deal President Bill Clinton negotiated with lawmakers is in place 20 years later, Kennedy said.

Congress might find savings by making the TSA more efficient, expanding the PreCheck expedited screening program and changing the agency’s acquisition process, said Michael McCormick, executive director and chief operating officer of the Global Business Travel Association, which also signed the letter.

When businesses want to expand, they send people on the road, McCormick said. Taxes will be a drag on an industry that’s key to U.S. growth.

“They think that one extra little fee won’t matter,” McCormick said. “They think the business traveler can afford it. At some point, you have to say enough is enough.”

The budget measure is S.Con.Res. 8.

To contact the reporter on this story: Jeff Plungis in Washington at jplungis@bloomberg.net

To contact the editor responsible for this story: Bernard Kohn at bkohn2@bloomberg.net

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