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Republican bill would slash U.S. air traffic budget

WASHINGTON (Reuters) - Proposed legislation in the U.S. House of Representatives would roll back funding for air traffic control and would eliminate a popular airline subsidy that ensures service to small communities.

The four-year, $59 billion measure released late on Friday touts more than $4 billion in savings consistent with Republican aims to slash domestic spending and provides funds to take the next steps in modernizing the government-run air traffic system.

"This legislation increases the efficiency and effectiveness of our aviation programs while ensuring that the U.S. aviation industry remains competitive in the global marketplace and continues to be the safest system in the world," Rep. John Mica, chairman of the House Transportation

and Infrastructure Committee, said in a statement.

Companion legislation is working its way through the Senate.

Both chambers will now consider similar proposals to roll back funding of Federal Aviation Administration (FAA) operations to 2008 levels -- or roughly $200 million to $300 million annually in reduced spending -- to roughly $9 billion per year from 2011 through 2014.

The FAA would not comment on efforts to cut its budget, but some ardent supporters of the agency in Congress have said that the sharp reductions could lead to furloughs and a reduction in services to thousands of airline and private flights each day.

The bill requires the agency to find savings without undermining safety.

The proposal also would eliminate a $170 million government subsidy given to airlines annually to ensure passenger service to rural communities.

The Essential Air Service is a byproduct of 1970s-era airline industry deregulation that is utilized in more than 150 remote communities in 30 states and crucial to a handful like Alaska and West Virginia.

Republicans looking for opportunities to fulfill a November 2010 voter mandate for spending cuts and reduced budget deficits honed in on the program that has been under attack for years by some conservatives as outdated and underperforming.

Subsidized flights mainly carried out by small and regional airlines are not always filled compared with airline flights from larger airports that are almost always packed.

Some EAS flights receive thousands in subsidies while others nearly cover their own costs without the help.

A similar provision has been attached to the Senate bill.

Several contentious provisions that helped derail aviation legislation last year were not included in the bill.

These included a proposal that would have ended antitrust immunity agreements among U.S. and overseas airlines and a proposal that would have made it easier to organize ground workers at package delivery giant FedEx Corp.

(Reporting by John Crawley; editing by Carol Bishopric)

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