Trump's Air-Traffic Spinoff Would Boost U.S. Budget Deficits

  • Budget estimates for air-traffic plan may complicate passage
  • White House argues system would be more efficient as nonprofit

Trump Budget With $3.6 Trillion in Cuts Hurts Supporters

One of the central elements of President Donald Trump’s infrastructure plan, a proposal to spin off the U.S. air-traffic system into a nonprofit corporation, would increase federal deficits, according to a budget plan released by the White House Tuesday.

By largely eliminating the current taxes on airline tickets and aviation fuel, the White House projects that revenues to the government would decline by $46 billion in the 10-year period from 2018 through 2027.

Costs to the government for running the air-traffic system would drop by about $10 billion a year starting in 2021, according to the budget documents. But that would be more than offset by declines in revenues to the Airport and Airway Trust Fund, according to the estimates.

The trust fund -- which gets revenue from taxes on airline tickets, aviation fuel and air cargo -- is projected to raise $14.7 billion this year.

The air-traffic proposal’s deficit numbers may create a new hurdle to the plan, which has faced skepticism in Congress.

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