The Trouble With Or Without Sequestration

 

Focus in Washington has remained on possible $1 trillion across-the-board budget cuts that may be looming under a penalty known as sequestration.  But equally concerning to business aviation are the negotiations that will be ongoing later this fall to avert such drastic cuts.

Lawmakers are expected to look for revenue raisers to help meet debt caps, and this opens the door to user fees, extended depreciation or other proposals, business aviation advocates fear. These negotiations are expected to be pushed beyond the elections into the following “lame-duck” session.

. “No one really knows how it’s going to work,” says National Business Aviation Association President and CEO Ed Bolen, but “Business aviation, like every other industry, is at some risk.”

Pete Bunce, president and CEO of the General Aviation Manufacturers Association, agrees. “It’s just not all about sequestration,” Bunce says. “It’s about a lame-duck session where things can happen so quickly without thought of what the ramifications could be.”

In Washington, Bolen says, “bad ideas are really hard to kill” and user fee proposals never seem to go away.  In fact, the Obama administration strongly backs its proposal for a $100-per-flight air traffic control charge. “Because it’s out there, it’s a problem,” Bolen says.

While proposals for user fees have been thoroughly vetted on Capitol Hill, macro budget decisions could be made by a few individuals who may not have been involved in past user fee debates. “We’re going into a pretty uncertain time,” Bolen says. “We’re operating in a gray area.”

Equally concerning though is the possibility of those negotiations failing, opening the door to sequestration. An Aerospace Industries Association study estimates that FAA could see $1 billion in cuts in fiscal 2013 and that they would hit operations, facilities, equipment, and research and development.

Bunce notes the cuts could have “all kinds of tentacles,” from unleaded fuel research to Nextgen equipment.

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