President Barack Obama stated
on April 18 that there will be "no sacred cows" as he works
to cut inefficient programs out of the 2010 U.S. budget; however, at
least one program may be saved by the blessings of congressional guardian
angels.
Bloomberg recently reported
that there are few line items that have faced the butcher's blade more
times than the Essential Air Service program. Whether Democrat or Republican,
every president since Ronald Reagan has tried to slice the fat away
from the tenderloin only to discover that, Democrat or Republican, Senator
or Congressperson, the legislature takes the plate off the table.
"Congress watches this
program like a hawk," Patrick Murphy, who ran the program under
Reagan, told Bloomberg. "They don't want to hear that you
want to save money."
The program, part of a deal
struck with states during Carter-era airline deregulations, was designed
to maintain air service to communities whose air routes would likely
be cut due to un-profitability. According to the ironically named Essential Air
Service website, the program provides subsidies to 153 communities. In order
to qualify for the program, communities must be at least 70 miles away
from a medium or large airport, unless the subsidies would exceed $200
per passenger. However, for locations over 210 highway miles away, the
subsidy restriction is dropped.
In providing these sometimes needed
services to remote locations, the government is slated to feed the program
$123 million in fiscal year 2009.
While the President's budget
outline
noted it is increasing the program's budget by 55 million dollars -- the biggest
increase since a $63 million boost in FY 2002 -- it explained that the
program "is not efficiently designed." It went on to read:
"the Administration intends to work with the Congress to develop
a more sustainable program model...and improve cost effectiveness."
Bloomberg cited the route between
Albuquerque and Alamogordo, N.M. as the top subsidy heifer. The 150
mile route, flown by New Mexico Air, costs taxpayers $3,600 per passenger
in subsidized funds. The cost to the passenger is $195 to be transported
in a nine-person Cessna 208B/9.
Given that the
projects distance report states that
Alamogordo is 209 highway miles away from Albuquerque International
Airport, it is unclear why they are not subject to the $200 subsidy
limitation. However, what is clear is that though the airline flies
the route 12 times a week, on average less than one person per day flew
from Alamogordo.
Perhaps, the programs last
assessment done in 2006 by the U.S. Office of Management and Budget
offers some explanation. The report explained "it is unlikely that states would vigorously impose
the eligibility standards such as the $200 per passenger cap since they
want to preserve air service at their communities even if it would violate
our eligibility criteria." It further commented that congress had
been "repeatedly recommended" by the U.S. Department of Transportation
to create higher levels of efficiency but chose note to do so.
The Management and Budget offices
website, ExpectMore.gov, currently rates the Essential Air Service program
as "not performing."
It explains: "The program design is not effectively targeted...The
program is not targeted to only the most isolated communities, especially
those that do not have highway access to air transportation."
The effects of inefficiency
is clear in some of the routes. Bloomberg reported that most subsidized
air routes cost between $1 million and $2 million a year. As flight subsidy
is dependent on passenger numbers, the federal government essentially
is paying for the expenses incurred as a result of empty seats.
This means that a flight from Memphis, Tenn., to Meridian, Miss., that
carts 60 passengers per day costs taxpayers only $37.52 per passenger,
while the programs second most costly flight between St. Louis and Decatur,
Ill. that averages only four customers a day, costs $1,220 per passenger,
per round trip.
Though there has been no move
to cut the program as of yet by the Obama administration, the feathers
of congressional wings have been ruffled. According to a press release
by Sen. Robert Byrd, D-W. VA,
he along with Sen. Jay Rockefeller, D-W. VA, spearheaded a bipartisan
letter signed by 22 Senators to the White House budget director, Peter
Orszag, informing him of the importance of the air-service programs.
"Adequate air service
has become imperative to the success of our local economies," the
letter read. "Our discussions with the
Department of Transportation (DOT) indicate that funding for the EAS
program is facing a shortfall this year and we urge you to address this
critical matter. Simply put, the Essential Air Service program was a
promise made to rural America, and a promise that must be kept."
Senate leaders used the letter
as an opportunity to voice their concern over Essential-Air routes they
deem imperative to their constituency.
"We cannot turn this economy
around if we do not provide businesses and communities in every corner
of New York with adequate access to air travel," said Senator Gillibrand. "I will continue to work with Senator Schumer and the entire Congressional
delegation to ensure that New York gets its fair share of federal dollars."
With so many other programs
and legislative battles on the horizon, it is unlikely Obama will
waste political capital or seek to anger members of Congress over funding
for a small program such as the Essential Air Service.
"Let's say you cut Alamogordo;
you've immediately alienated two senators from New Mexico," Murphy
told Bloomberg. "In Washington terms, that's probably not worth
it."
For now, Alamogordo will continue
to see an average of one person a day for the most expensive flight
per person in the program. What does the tax payer get out of it?
Mike Espiritu, executive director of the Alamogordo
Chamber of Commerce,
told Bloomberg that the service was necessary to increase tourism and
drive the economic well-being of an area famous for White Sands National
Monument.
Others feel the program could
save millions of dollars by serving only remote towns. Michael Boyd,
head of the Evergreen, Colorado-based aviation consultant Boyd Group
International, told Bloomberg that "About 50 percent of this
program is a total boondoggle." He advocated serving locations
such as Devils Lake, North Dakota, which he explained was 400 miles
away from a significant air hub, and dropping the service to others
such as Macon, Georgia that is 80 miles outside of Atlanta.
Boondoggle or economically essential,
the President, the U.S. Office of Management and Budget, and others
have noticed that there is fat to trim from not only the Essential Air
Service, but numerous other programs in government that are not performing
up to standards. The biggest question is how many sacred cows are going to keep getting
fed tax payer dollars before their congressional angels put them on
a diet.
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