According to Bloomberg, the FY 2007 budget request for the Department of Homeland Security will include a proposal to double airline security fees:
President George W. Bush’s administration proposes to double airline-security fees for most travelers starting in October, a Homeland Security official said.
The fee would increase to $5 a flight for non-stop travelers from $2.50, said the official, who spoke on condition of anonymity. The change would cost airlines about $746 million a year for domestic flights, said airline consultant Aaron Taylor. Low-cost carriers such as Southwest Airlines Co., which rely more on non-stop flights than network airlines, would be hardest hit, he said.
The increase will help pay for airport security, allowing Bush to free general tax revenue for other priorities and to help meet a pledge to cut the budget deficit in half by 2009. Bush will submit the proposal as part of his fiscal 2007 budget to Congress on Feb. 6 for the year beginning Oct. 1….
Congress in the current fiscal year expects fees to raise $2 billion, or 43 percent, of the Transportation Security Administration’s $4.6 billion aviation security budget. General tax revenues finance the remaining $2.6 billion.
This fee increase, if it took place, would essentially move most of the DHS budget outside of the normal appropriations process. This could potentially weaken Congressional accountability and oversight of TSA.
The article also notes the extent to which this proposal is driven by competitive factors within the airline industry, and would have the effect of hurting the upstart point-to-point airlines such as JetBlue and Southwest more than the older hub-and-spoke carriers.
The Administration proposed similar fee increases in the FY 2006 budget request, but they were a non-starter in Congress. The attitude in Congress toward a fee increase has not changed in the last year, but they might be persuaded to accept a fee increase this year given the tighter fiscal situation and the risk that other directly-funded programs could be threatened without the offset in general spending that the fee increase would allow.