U.S. House panel boosts rural air service subsidies

WASHINGTON -- Tea party lawmakers from rural areas were among those fighting the hardest to preserve taxpayer subsidies for airline flights into and out of small towns last year after senior Republicans tried to eliminate the oft-criticized program. Now, the House Appropriations Committee is awarding the program an 11 percent budget increase.

Next year, the subsidies would reach a record $214 million under a bill the GOP-run committee approved Tuesday.

The subsidies can reach hundreds of dollars per ticket -- and can exceed $1,000 in a few routes. A recent change to the program will soon take care of such $1,000-plus cases, but critics of the program say more needs to be done to shelter taxpayers from runaway costs.

Last year, the House voted to eliminate the program in the lower 48 states by 2013. But rural tea party lawmakers like Reps. Rick Berg, R-N.D., and Kristi Noem, R-S.D., were among those who fought to save it.

Instead of killing the air subsidies, Congress in February approved a watered-down set of changes when passing a measure renewing federal aviation programs.

The subsidies increase approved Tuesday came as the panel also moved to cut food aid to poor nations overseas and funding for implementing new Wall Street regulations.

The Essential Air Service program is a product of deregulating the airlines during Jimmy Carter's presidency. It was established to guarantee that small communities would continue to get commercial air services even though the routes were no longer profitable after deregulation.

The program awards contracts, usually worth between $1 million and $2 million a year, to subsidize airlines that serve airports such as Escanaba, Mich., Pueblo, Colo., and Scottsbluff, Neb. Such subsidies work out to as little as $6 per passenger for airports like Cody, Wyo., and Sault Ste. Marie, Mich. But subsidies can often reach hundreds of dollars each way on a round trip flight to and from isolated places like Kalaupapa on the island of Molokai in Hawaii or Great Bend, Kan., whose three or so passengers a day benefited from a subsidy exceeding $600 in 2010, the most recent year for which data is available.

Cape Air, operating out of the Cape Girardeau Regional Airport, receives $1.6 million annually through the program.

The program's budget has quadrupled since the 2001 budget year, when it was just $50 million. After the Sept. 11, 2001, terrorist attacks, however, airlines pulled out of smaller unsubsidized markets, leading more cities to require taxpayer subsidies to keep their flights.

In 2009, the subsidies cost $136 million but jumped to $175 million in 2010 and to $193 million for the ongoing budget year.

That kind of spiral has earned the program many detractors among government watchdog groups and anti-waste conservatives. So when House Republicans last year took up legislation renewing federal aviation programs it contained a provision to eliminate the program by 2013.

That got the attention of newly-elected tea party freshmen, many of whom reclaimed for the GOP districts occupied by rural, "Blue Dog" Democrats. Just as they support much-maligned farm subsidies, rural conservatives like Berg dropped the anti-government rhetoric when a program is popular back home.

"Rural regions rely on [the Essential Air Service subsidies] for vital air transportation," Berg said on the House floor in February. "In North Dakota, airports like Jamestown and Devil's Lake would not be able to provide critical air service without this support." Berg, Noem and others won public assurances that the program would not be killed in the end.

"The logic and the rationality and the common sense of eliminating this relic of a program runs into the politics of rural state lawmakers and some of the freshmen that were elected represent areas that would be affected," said Steve Elis, vice president of Taxpayers for Common Sense, a Washington-based watchdog group.

The program is most strongly backed by lawmakers in large states where it can be a drive of hundreds of miles to the nearest hub airport. Backers of the program say having air service is essential to attracting business investment to isolated communities.

"The reason we call it Essential Air Service is because it is just that," said Sen. Lisa Murkowski, R-Alaska. "It really is an essential link for our small communities."

Presidents from Ronald Reagan to George W. Bush sought unsuccessfully to cut the subsidies that keep flights going to 120 communities in 35 states in the continental U.S. and Puerto Rico and 43 tiny towns in Alaska, according to the most recent reports. Subsidies are greatest for airports that are more than 210 miles from regional hubs. Communities within 70 driving miles of a hub airport are ineligible.

The February reforms require that subsidized routes must average at least 10 passengers a day if they are to be renewed when current contracts are up and block new communities from receiving the subsidies. Last year, Congress blocked subsidies from exceeding $1,000 a passenger. That means no more subsidized flights for Alamogordo, N.M., and a likely cutoff for Ely, Nev. -- where subsidies exceeded $2,000 a passenger in 2010 -- when the contract of Great Lakes Aviation expires in September.

Lawmakers have successfully pressed to allow airlines to use planes smaller than 15 seats to cut costs and try to preserve service to communities with the fewest passengers. And the House panel is suggesting allowing single-engine airplanes to carry some of the load.