Flies on the Aviation Bill

Volume XXI No.14: April 8, 2016

One consequence of virtually no legislation passing Congress is that when something is likely to pass, every legislative Tom, Dick, and Harry is going to try to jump on board. We’re used to seeing that at the end of Congress, hence the Christmas tree moniker that often falls on end-of-year omnibus appropriations bills. It is far less common to see that action in April.

The Federal Aviation Administration reauthorization is viewed as must pass legislation. Back in 2011, Congress left town for the August recess without enacting an extension of the FAA legislation. This was the result of a House-Senate fight over the future of the Essential Air Service program (for what it’s worth,we sided with the House that this relic of airline deregulation was wasteful and needed reform). But because of the lapse in authorization, roughly 4,000 employees were furloughed and the FAA was unable to collect the ticket taxes that go into the Airport and Airway Trust Fund which helps pay for improvements at the nation’s airports. While on recess,Congress came back and passed a hasty short term extension that would get them through the fall.

This bill has a few months to go before it officially becomes “must-pass-right-away” – that is until July 15th when the current short-term extension expires. But given the current legislative doldrums in Congress, it is already attracting extraneous provisions as if it were the only game in town.

Earlier this week, the Senate voted unanimously to take up the FAA reauthorization (98-0). The amendments appeared fast and furious. And while there are amendments that are directly - or at least tangentially – related like airplane seating (failed) or amendments dealing with flight crews and airport security, there are also far flung amendments dealing with residential water conservation, benefits for retired mine workers, or to add on the entire “Carbon Capture Improvement Act.”

One amendment is missing from this list that will most definitely catch our eye and ire. Finance Committee Chairman Orrin Hatch (R-UT) is drafting the tax provisions to go along with the FAA reauthorization (remember the ticket tax extension). Senate Democrats want to attach a passel of renewable energy-related tax provisions that didn’t make it into the end of year tax extension package.

As you may recall, we were opposed to that budget busting package at the time and are certainly not eager to see more added. First off, we are opposed to Congress playing favorites in the tax code and, particularly in the energy arena, there is a crazy quilt of tax expenditures that favor every type of energy source going. They should all be eliminated. In addition, tax expenditures are budget-busting, typically given one or two year extensions because Congress is unwilling to find the offsetting cash or revenue to make them permanent or extended for a long-period of time. In December, Congress decided to throw that fiscal fig leaf out the window and nakedly made many of them permanent and gave others a long-term extension, without spending cuts or offsetting the revenue lost by their extension. Now it appears some Senators want to extract extensions of the few left on the cutting room floor.

The FAA reauthorization should move forward on the merits. There are big enough issues at hand regarding reforms to the EAS, air traffic control operations, and airport funding, that gumming up the works with extraneous tax provisions will only serve to ground the whole package and lead to another short-term extension.