What Won’t Actually Happen to Travel if We Go Over the Fiscal Cliff

First of all there is no ‘fiscal cliff’ — there’s a series of changes in law as well as fiscal circumstances that cluster around the same time. And the analogy is misleading because in most cases nothing irreversible happens on January 1; tax rates if reset can be done so retroactively to the start of the year, program spending put on hold a few days can still be greenlit, etc.

But even if we go past December 31 under current law, none of the Really. Scary. Things.(tm) being predicted in travel will actually come to pass. At least not the bad stuff leading this USA Today piece.

The big threat is that if Congress and President Obama can’t reach an agreement on spending cuts and tax increases, automatic spending cuts are scheduled to hit the Federal Aviation Administration and the Transportation Security Administration on Jan. 2.

If that should happen, the FAA could be forced to close more than 100 smaller airports because they’d have fewer air-traffic controllers, according to separate reports by a former congressional aide and a current lawmaker.

I debunked this story back in September. FAA cuts would predominantly come from capital accounts, meaning delays in modernizing air traffic control.

The USA Today story goes on to warn of severe layoffs at TSA:

And, they warn, the TSA could lay off thousands of baggage screeners, which could force the agency to abandon full-body screening for hundreds of thousands of passengers at airports each day.

Except… nothing is actually going to happen on January 1.

But because lawmakers are expected to continue negotiations in January if they can’t reach agreement, government officials say there should be no immediate changes at FAA or TSA.

..David Castelveter, a spokesman at TSA, says that “if a budget agreement is not reached, front-line screening operations would continue uninterrupted.”

Darn, I was hoping something positive might come from all of the drama playing out (and being played up) on television.

And yet the rest of the piece of full of a parade of horribles that is best understand as representing the interests of the people being quoted, the airline industry lobbies for more government funding for air traffic control so they warn of the terrible things that will come if that doesn’t come to pass. But it’s a stretch to suggest any of those terrible things are real. Just as any budget showdown focuses on the most visible projects that enjoy the most popular support, so too does this article.

NextGen air traffic control may well be a good thing, may well warrant investment, but doesn’t generate the sort of outrage, worry, or indignation that ‘unsafe planes’ headlines would. But that’s really what we’re talking about — delayed investment in capital projects, not immediate layoffs of personnel.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. Like most gov. decisions, the stuff that will hurt the citizens will take effect rapidly, the stuff that will effect the politicians buddies will be further “discussed”

  2. We will surely go over “the cliff.” If not now, at some point. I’m not sure what to do anymore. I think every lawmaker needs to have term limits, because it will reduce the temptation to sell their own soul for mere votes. In many cases, it is harder to do what is right, and popular to do what isn’t. Take green energy, for example. Here is the list of faltering or bankrupt green-energy companies:

    Evergreen Solar ($25 million)*
    SpectraWatt ($500,000)*
    Solyndra ($535 million)*
    Beacon Power ($43 million)*
    Nevada Geothermal ($98.5 million)
    SunPower ($1.2 billion)
    First Solar ($1.46 billion)
    Babcock and Brown ($178 million)
    EnerDel’s subsidiary Ener1 ($118.5 million)*
    Amonix ($5.9 million)
    Fisker Automotive ($529 million)
    Abound Solar ($400 million)*
    A123 Systems ($279 million)*
    Willard and Kelsey Solar Group ($700,981)*
    Johnson Controls ($299 million)
    Brightsource ($1.6 billion)
    ECOtality ($126.2 million)
    Raser Technologies ($33 million)*
    Energy Conversion Devices ($13.3 million)*
    Mountain Plaza, Inc. ($2 million)*
    Olsen’s Crop Service and Olsen’s Mills Acquisition Company ($10 million)*
    Range Fuels ($80 million)*
    Thompson River Power ($6.5 million)*
    Stirling Energy Systems ($7 million)*
    Azure Dynamics ($5.4 million)*
    GreenVolts ($500,000)
    Vestas ($50 million)
    LG Chem’s subsidiary Compact Power ($151 million)
    Nordic Windpower ($16 million)*
    Navistar ($39 million)
    Satcon ($3 million)*
    Konarka Technologies Inc. ($20 million)*
    Mascoma Corp. ($100 million)

    *Denotes companies that have filed for bankruptcy.

    The problem is that government gives too many favors to their buddies, and there is too much waste. The government has become a huge problem. They do all this at taxpayer expense. Then they say raise taxes. To hell with them all.

  3. Will any of the federal airline taxes expire for a day or two? Last year I was able to buy tickets for my family to Hawaii in the sweet spot where taxes expired before they were renewed a few days later…that saved me close to $100.

  4. @J. Galt – Term limits won’t change a thing, except the names of the people in the headlines. You’d have to fundamentally change the ENTIRE political system in order to have any effect, and that’ll never happen.

  5. @J Galt Since nearly all of these companies are owned or run by people who bundled multi-million dollar contributions to Obama’s campaign fund, the WH doesn’t see this as a problem. Just think of it as taxpayer funding of elections, except that all of it goes to Obama.

    All this talk of an immediate “fiscal cliff” is nonsense. What we are really facing is a long term “going over Niagara falls without a barrel”, as the ever increasing Federal debt eventually reaches the point where every dollar brought in thru taxes is required to pay interest costs on that debt, and nothing is left over to spend on anything else. Or the Chinese run out of money to loan to us, whichever comes first.

    “The problem with {Progressivism} is that sooner or later you run out of other people money”. M Thatcher

    “What can’t go on forever, won’t”. Instapundit

    “Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded — here and there, now and then — are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right-thinking people. Whenever this tiny minority is kept from creating, or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty. This is known as “bad luck.”
    Robert Heinlein

  6. You make the economic crisis sound like a lot of fuss about nothing. I hope you are right, and wish I could share your confidence that the travel industry won’t be affected too badly. I guess only time will tell.

  7. @Robert Hanson

    I am not sure about the efficacy of just throwing out silly quotes about progressives. The Thatcher one is particularly disturbing. Politics is about figuring out how to allocate resources and make rules for society. Conservatives waste just as much money. Maybe not on green energy specifically- which has a rational argument for government support at this stage in its development, but then on wars, the oil industry subsidies, subsidies for the financial industry, etc etc.

    @Gary. The fiscal cliff is not just one thing I agree but I am not sure how that doesn’t make it real. The recovery is weak enough that if could tip the country into recession. To me, that’s real.

    @Mikey. The problem with the cliff is that no matter what is chosen real people and real political constituencies are affected. I think it is not logically coherent to argue that politicians both only care about voters and election and then also say they only care about themselves.

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