It’s not just millionaires who would pay more under President Obama’s latest plan to combat the deficit.
Air travelers, federal workers, military retirees, wealthier Medicare beneficiaries and people taking out new mortgages are among those who would pay more than $130 billion in new government revenues raised through new or increased fees. These fees are advertised as “savings” in administration budget documents.
Airline passengers, for instance, would see their federal security fees double from $5 to $10 for a nonstop round-trip and triple to $15 by 2017, raising $25 billion in the coming decade. Federal employees would contribute $21 billion more to their pensions in the same period. Military retirees would pay a $200 fee upon turning 65 to have the government pay their out-of-pocket Medicare expenses; they also would pay more for nongeneric prescription drugs.
And it’ll cost corporate jet owners a new $100 fee for each flight.
The fees aren’t taxes. They’re charged to people who use government services or receive benefits such as taxpayer-subsidized health care, and the fees typically defray the government’s cost of providing a service. The fee on corporate jets and other private passenger planes, for example, would raise about $1 billion a year to help finance the cost of air traffic control. Recreational flyers won’t have to pay.
Many of Mr. Obama’s proposals are retreads from earlier budget proposals, including those submitted by his predecessors. They’re rejected year after year. Some ideas, such as requiring wealthier veterans to pay more for their health care, whip up opposition from powerful interest groups. Others, such as the bigger security fee for flyers, seems too close to a ticket tax increase.
Unlike Mr. Obama’s tax proposals, the new fees aren’t all necessarily dead on arrival with Republicans. A group led by Vice President Joseph R. Biden Jr., for example, tentatively agreed to increase the airline security fee before their talks collapsed in June. The Biden-led group also was eying an increase in pension contributions by federal workers.
Another new fee would increase by one-tenth of a percentage point the fee that mortgage giants Fannie Mae and Freddie Mac charge lenders to guarantee repayment of new mortgage loans. The administration says the fee increase would add $15 a month to the monthly cost of an average new mortgage. Even without existing mortgages being affected, the fee increase would raise $28 billion over 10 years.
Some of the fees tilt toward the arcane. There’s a plan to save $3 million a year by developing an electronic records system for hazardous waste shipments. Another would give taxpayers $7 million more a year by giving the federal government a 50 percent share of receipts from geothermal leases on federal lands instead of just 25 percent, with the remainder going to the states.
Another proposal would charge $4 an acre on nonproducing oil and gas leases on federal lands, raising $1 billion in a decade. The idea is to prod energy companies to get their leases into production or give them up and allow others to develop them.
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