How the Trump Budget Could Impact Travel
This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.
The Trump Administration released its proposed 2018 budget for the federal government this morning. The proposals will affect many aspects of how people travel in the US. We’re taking a non-partisan look at the suggestions below:
Privatizing Parts of the FAA
The first and most significant change the president has outlined would be shifting the air traffic control function, currently a government run program under the Federal Aviation Administration (FAA), to “an independent, non-governmental organization.” Airlines have been pushing privatization for years, hoping to make operations more efficient and to avoid spending disputes and worker furloughs. More stable funding is needed if the FAA wants to modernize, advocates say, while skeptics contend that privatization would mess with a system that is already the safest in the world.
A private air traffic control group would receive its funding from fees and taxes that users already pay to the government. It’s unclear how much the fees would be and who exactly would pay for them.
The FAA is currently undergoing its own modernization program, called NextGen, which is upgrading radar, GPS tracking and plane guidance. Privatization advocates say the move could speed up this process.
Cuts to the TSA
The TSA could see its funding lowered by $500 million, which would represent an 11% cut to its current $7.6 billion budget. The US Coast Guard and Federal Emergency Management Agency, or FEMA, could also see resources decrease with the new plan.
Specifically, there would be $65 million less for the TSA’s behavioral detection program, which has been shown, according to in-house documents, to be ineffective and discriminatory. Additionally, local law enforcement grants to provide security at airports would see a $55 million cut.
The plan also calls for a $3 billion increase for Customs and Border Protection, mainly for more border agents and construction of the US-Mexico border wall.
Increase in Taxes and Fees for Travelers
According to a report obtained by Politico the decrease in funding would be offset by a $1 increase in the TSA security fee, raising it from $5.60 to $6.60. All flyers currently pay a $5.60 tax on every one-way ticket and $11.20 round-trip. The fee was raised in 2014 from $2.50 and you see this tax tacked on to award tickets (i.e. 12,500 miles + $5.60). The administration expects to raise $470 million in revenue from the fee, compensating for the other cuts to the TSA.
An End to Other Programs
The proposed budget also trims spending on well-known programs, including ending federal support for Amtrak’s long-distance train services. On many of its routes, Amtrak operates at a loss and the plan calls to focus on its profitable Northeast Corridor train services.
The Essential Air Service, which subsidizes commercial flights to rural airports, would be completely eliminated. The program currently costs $175 million and the budget states that many of the flights are “not full” and have high per-passenger costs.
Other transportation infrastructure costs could be cut, like TIGER grants (short for Transportation Investment Generating Economic Recovery) and The Federal Transit Administration’s Capital Investment Program. Trump wants states and localities to take the lead on many of these projects.
- Long security lines plagued airports last summer because of a lack of TSA agents, but Congress approved better overtime pay, leading to a decrease in congestion and wait times. The majority of the TSA’s budget goes to staff, so less money could mean an increase in security wait times.
- Higher fees means travelers will most likely bear the costs of the cuts
- With a loss of subsidies, passengers could see reduced service and higher prices for train transportation and flights to small airports
Despite all the reductions in spending, the president has proposed a massive increase in infrastructure spending, and many of those dollars could go into transportation programs. According to a report from the Wall Street Journal the $1 trillion in spending could go towards construction of more highways and high-speed railways. Trump has even expressed interest in the Hyperloop.
Ultimately, congress has the final say on actual funding levels since they craft and approve the federal government’s budget. Agencies can appeal the cuts before they are put in place. If passed, the changes wouldn’t likely take effect until October 1 (2017) for the 2018 fiscal year. But only time will tell if these changes have a positive or negative effect on travelers.
How do you feel about President Trump’s 2018 budget?
Featured Image courtesy of Getty Images.
Welcome to The Points Guy!
WELCOME OFFER: 80,000 Points
TPG'S BONUS VALUATION*: $1,600
CARD HIGHLIGHTS: 3X points on dining and 2x points on travel, points transferrable to over a dozen travel partners
*Bonus value is an estimated value calculated by TPG and not the card issuer. View our latest valuations here.
- Earn 80,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $1,000 when you redeem through Chase Ultimate Rewards®.
- Enjoy benefits such as a $50 annual Ultimate Rewards Hotel Credit, 5x on travel purchased through Chase Ultimate Rewards®, 3x on dining and 2x on all other travel purchases, plus more.
- Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards®. For example, 80,000 points are worth $1,000 toward travel.
- With Pay Yourself Back℠, your points are worth 25% more during the current offer when you redeem them for statement credits against existing purchases in select, rotating categories
- Count on Trip Cancellation/Interruption Insurance, Auto Rental Collision Damage Waiver, Lost Luggage Insurance and more.