In the FY 2018 federal budget request released on March 16, the administration targets the reduction of discretionary spending for the Department of Transportation (DOT) by 12.7%, from $18.6 billion to $16.2 billion. It seeks to charter a private non-profit organization to take over air traffic control from the Federal Aviation Administration (FAA) and dismantle competitive grant programs meant to help transportation projects spur economic growth.
Trump’s proposal to spin off air traffic control (ATC) stalled last year, but as Congress begins work on reauthorizing the FAA which expires on September 30, there is now a push for establishing a private non-profit organization or a government corporation to operate the nation’s air traffic control system and separate it from the FAA. With President Trump embarking on loosening regulations and investing in infrastructure, removing the ATC system from federal control would insulate it from governmental “dysfunction.”
The budget also calls for eliminating the Essential Air Service (ESA), a subsidy program for airlines to provide passenger service to small and rural communities that would otherwise not be profitable. The EAS program assists airlines in serving small communities, and the elimination of funding would hurt rural counties where EAS services provide a crucial economic lifeline to communities with no airport in their region. The budget projected that eliminating the program would save $175 million over the annualized CR level.
The budget request also would eliminate the Transportation Investment Generating Economic Recovery (TIGER), a competitive grant program in which state and local governments request federal matching funds for projects with an economic impact. The request gives no details on the savings from the program. It was funded at $500 million in fiscal 2016 and has been proven popular, with the number of applications for TIGER grants exceeding the amount of funding.
The budget outline also would limit funding for the Federal Transit Administration’s New Starts program that provides grants for major rail-based public transportation projects. The White House called for those programs to be funded entirely at the local level. The outline asked Congress to fund only grants that have already been fully agreed to, indicating that no future grants would be approved.
The request would reduce federal funding for Amtrak, a long time target for GOP cuts. The White House called for eliminating federal support for long-distance service, saying it causes most of the organization’s operating losses. That approach would allow for a greater focus on more urgent priorities, like the Northeast Corridor lines and other state-supported passenger services. However, this could impact nearly 500 communities that are served by Amtrak.
The budget document stated the cuts would help the DOT focus on transportation needs of “vital national interests.” The budget request reflects a streamlined DOT that is focused on performing vital functions and reduces or eliminates programs that are either inefficient, duplicative of other Federal efforts, or that involve activities that are better delivered by States, localities, or the private sector.