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NTU Comments on TSA's High-Tech Proposal

May 16, 2005

The Honorable John Mica
Chairman, Subcommittee on Aviation
Committee on Transportation & Infrastructure
U.S. House of Representatives
Washington, DC 20515

Dear Mr. Chairman:

On behalf of the 350,000-member National Taxpayers Union (NTU), I write to outline our views regarding a recent plan crafted in your Subcommittee to provide the Transportation Security Administration (TSA) with funding for in-line Explosives Detection Systems (EDS) and other equipment. This so-called "TSA High-Tech Proposal," while offering the potential for some long-term savings, is marred by the imposition of yet another net tax increase on air travelers and carriers.

All of us at NTU appreciate your efforts to make TSA more accountable to taxpayers, and to make aviation security less reliant on a rigid, bureaucracy-driven structure. Indeed, we were most encouraged to read your statement last month (April 19) after the release of a critical report from the Homeland Security Inspector General on the state of airport screening across the country:

Over the last three-and-a-half years we have spent billions of dollars creating a Soviet-style, centralized bureaucracy that has resulted in great inefficiencies and inflexibility with little improvement in screener effectiveness. This money could have been much better spent on better screening and other security technology... [In addition] The GAO [Government Accountability Office] found the private screeners with federal oversight are doing better than the federal-only screeners.After three and a half years, common sense dictates that we do what's best for our nation's aviation security and make the necessary changes immediately.

We couldn't agree more. And for this reason, we were disappointed to learn that the Subcommittee's TSA High-Tech Proposal, meant to reflect part of this new vision, resorts to the same old tax-and-spend tactics of previous TSA ventures. Despite the repeal of some $945 million in airline security fees over three years, and the very real prospect of $1 billion in annual TSA labor-cost savings, the proposal calls for a three-year, $6.02 billion hike in other security fees (i.e., travel taxes).

Airlines and the customers they serve are already overburdened by billions of dollars in taxes, fees, and mandated charges. In fact, middle-class air travelers are now likelier to pay a higher effective tax rate (an average of 26 percent) on an airline ticket than they are on their 1040 income tax returns.

Such a lopsided burden would be reason enough to oppose yet another tax increase on this struggling sector of our economy, were it not for TSA's abysmal fiscal track record. Just a few of the agency's fiascoes include:

  • Increases in labor overhead costs of 104-130 percent, when security contracts were first handed over from airlines to the TSA in 2002;
  • An expenditure of more than $460,000 on a posh TSA celebration in 2003, including nearly $82,000 for plaques and other awards.
  • Most recently, a report of lavish expenditures associated with TSA's Transportation Security Operations Center, boasting a $350,000 fitness facility to serve 79 employees and a $282,000 array of artwork and silk plants (not counting contractor mark-ups and overpayments).

These kinds of expenditures are symptomatic of an agency that is pathologically incapable of properly managing its budget resources. Providing more tax dollars, even for the purchase of admittedly promising technology, will only reward TSA for its intolerable practices.

EDS technology could be an important part of an aviation security system that serves customers, airlines, and taxpayers more efficiently and effectively. However, such a plan could (and should) be funded from TSA's existing budget. As an alternative, if Congress deems this project to be a high priority, then reductions in other, less-important or poorly-performing programs should be enacted to offset the costs. Our staff will gladly assist you in identifying such options, as neither a tax hike nor deficit spending from the overall budget is necessary.

The federal government takes too large a share from the private sector, stifling the very innovation and entrepreneurial spirit that could develop products and procedures to make our nation more secure. I urge you and your colleagues to bear this important principle in mind, and reject tax increases or deficit financing to implement the TSA High-Tech Proposal.


Pete Sepp
Vice President for Communications