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How the Trump Budget Could Impact Travel

March 16, 2017
4 min read
How the Trump Budget Could Impact Travel
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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.

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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.

The TSA could be impacted by President Trump's 2018 budget. Image courtesy of Chip Somodevilla/Getty Images.

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.

Amtrak's subsidies could be ended if the Trump administration's 2018 budget is passed. Image courtesy of Getty Images.

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.

Potential Impact:

  • 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.

Featured image by Getty Images
Editorial disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

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3XEarn 3 Points per $1 spent at Gas Stations, Air Travel and Hotels
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    For a limited time, earn 80,000 bonus ThankYou® Points after you spend $4,000 in purchases within the first 3 months of account opening

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  • For a limited time, earn 80,000 bonus ThankYou® Points after you spend $4,000 in purchases within the first 3 months of account opening
  • Earn 3 Points per $1 spent at Restaurants and Supermarkets
  • Earn 3 Points per $1 spent at Gas Stations, Air Travel and Hotels
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  • Annual Hotel Savings Benefit
  • 80,000 Points are redeemable for $800 in gift cards when redeemed at thankyou.com
  • No expiration and no limit to the amount of points you can earn with this card
  • No Foreign Transaction Fees on purchases