The business travel industry for the most part is taking a wait-and-see approach to President Joe Biden’s plan, announced March 31, to spend about $2.3 trillion on infrastructure improvements in the United States. Some of that spending, according to the White House, is planned for travel infrastructure, including commercial airports and Amtrak.
Neither the Global Business Travel Association, the U.S. Travel Association nor the American Hotel & Lodging Association as of Friday had taken a public stance on the plan, at least for now. The plan, not yet legislation, calls on Congress to invest $25 billion in commercial airports, including terminal renovations and funding for transit to and from airports. It also calls for $80 billion for Amtrak, including an expansion of its route map and investment particularly in Northeast Corridor rail infrastructure.
While Congress hasn’t yet introduced legislation reflective of Biden’s plan, there are signs that passing a bill could be a contentious process. Democrats have an avenue to pass a bill without Republican support, but have no margin of error to do so. It’s not clear that all or any of Biden’s priorities will be included in the final bill, if Congress is able to craft one, but some of those planks could directly affect business travel.
The Airports Council International-North America, which says it represents about 300 commercial airports in the United States and Canada and the authorities that own and operate them, said it supported Biden’s plan, citing its pledged $25 billion in airport infrastructure improvements.
“This plan would help the industry continue to focus on safe and efficient air travel by supporting terminal renovations and multimodal connections that would provide affordable access for passengers and workers,” ACI-NA president and CEO Kevin Burke said in a statement, noting the devastating effects of the Covid-19 pandemic on airport revenue. Many commercial airports are funded in part by passenger facility charges on airline tickets, a revenue stream decimated by the sharp drop-off in air travel. The association estimates airports “will face at
least $40 billion in losses through March 2022,” and has advocated for more flexibility to raise PFCs, current capped by federal law at $4.50 per flight, a number established in 2000.
“On top of that, airport infrastructure has long been underfunded, creating a backlog of $115 billion worth of necessary projects,” Burke continued.
Biden’s plan doesn’t include specific airport infrastructure improvements. Those details will be hashed out in the coming months during the legislative process. But ACI-NA last month published a report that uses “a combination of public and private data to determine project-level infrastructure needs, concerns and priorities.”
While there’s no guarantee any particular project will be included in the final legislation, much less that it would pass and become law, the ACI-NA report includes dozens of potential initiatives that it said are needed at U.S. airports. Some examples:
- The replacement of Newark Liberty International Airport’s 20-year-old AirTrain rail connection and the construction of a similar AirTrain at LaGuardia Airport, at a cost of $2.05 billion each
- The $5.5 billion Landside Access Modernization Program at Los Angeles International Airport, an initiative to reduce traffic congestion around the airport that includes parking and drop-off improvements as well as the construction of a 2.25-mile elevated rail connection
- The construction of a new passenger terminal at John Glenn Columbus International Airport, with a price tag of $1.3 billion to $1.5 billion
- The expansion of Concourse A at Nashville International Airport by 10 gates, at a cost of $620 million, and extending one of the airport’s runways to enable nonstop service to Asia, at a cost of $500 million
- Replacing the passenger terminal at Hollywood Burbank Airport, which was built in 1930 and which “does not meet current established [Federal Aviation Administration] guidelines for objects located in the Runway Safety Area,” according to the report, at a cost of $1.2 billion
Amtrak responded to the announcement of Biden’s plan by releasing a map of new proposed service should it receive the infrastructure funding with dozens of new destinations, including Columbus, Nashville and Las Vegas, among many others.
Calling the would-be destinations a “bold vision,” Amtrak CEO Bill Flynn added in a statement that “Amtrak must rebuild and improve the Northeast Corridor and our National Network and expand our service to more of America. The NEC’s many major tunnels and bridges—most of which are over a century old—must be replaced and upgraded to avoid devastating consequences for our transportation network and the country.”
Still, Congress over the years has been anything but aggressive in funding Amtrak, although the rail service did receive more than $1 billion under the 2020 Coronavirus Aid, Relief and Economic Security Act, better known as the CARES Act. Given Congress’ willingness over the years to limit the growth of Amtrak’s federal subsidies, it’s questionable whether Biden’s plan and the planned expansion will pass legislative muster.
Will it Pass?
The Democrats theoretically could pass Biden’s plan, or a version of it, though Congress without any Republican support, much like they did the $1.9 trillion American Rescue Plan Covid-19 relief act. House Speaker Nancy Pelosi (D-Calif.) last week told CNN she wants the House version of the bill “largely complete” by July 4, there are signs, though, that passing a infrastructure bill could be a heavier political lift than was the Covid relief plan.
For one, while Democrats largely—but not unanimously—cheered the plan, Republicans were hardly enthusiastic, particularly about the size of the plan, the scope of what the Democrats consider “infrastructure” and Biden’s plan to raise primarily corporate taxes to pay for it. Senate Republican leader Mitch McConnell (R-Ky.) told reporters on April 5 that the plan is “something we’re not going to do,” citing the plan’s size and tax hikes, but added that Republicans could support a plan that was “much more modest.”
An infrastructure bill would need the approval of at least 10 Republicans in the Senate to overcome a filibuster. Without Republican support in the Senate, the 48 Democrats and two independents who caucus with them (Maine’s Angus King and Vermont’s Bernie Sanders) could pass a plan through the Senate’s budget reconciliation process with Vice President Kamala Harris as the tiebreaking vote. This was the process used to pass the Covid-19 relief bill, and the Senate parliamentarian last week determined that a similar route could be pursued for an infrastructure bill.
That path, though, would require no defectors among Democrats. Sen. Joe Manchin (W.V.), for one, already has said he opposes raising the corporate tax rate as high as Biden proposed to pay for the plan.
As such, whatever final form the Biden plan assumes—if it survives—the path Congress takes to funding travel-related infrastructure improvement isn’t likely to be a smooth one.