Latest News

Still against taxes, Bush embraces user fees

WASHINGTON—The Bush administration may be squarely against new taxes, but its proposed fiscal 2008 budget seeks to raise almost $81 billion in new revenue over the next five years by hiking user fees and other charges on taxpayers and businesses.

Technically, changes to these fees aren't taxes. But for anyone who must pay them—everyone from recreational hikers to war veterans—it's a question of semantics.

The big revenue gains would come from changes to federal health-care programs.

Bush would raise more than $15 billion through 2012 by allowing the Defense Department to raise enrollment fees and deductibles for medical care provided to military retirees under age 65. It would also raise retail pharmacy co-payments for all military retirees.

He'd raise another $1.6 billion over five years by increasing the pharmacy co-pay for all veterans and another $526 million by raising medical care fees for non-disabled, high-income war veterans. Veterans with household income above $50,000 a year would pay an annual enrollment fee of $250, which would jump to $750 a year for vets with household income above $100,000.

The president also seeks to limit the growth in health care subsidies for high-income beneficiaries of Medicare, the federal health-insurance program for the elderly. His budget estimates collecting $5.5 billion over five years through "reduced subsidies for certain high-income beneficiaries."

Bush also proposes to end the practice of indexing for inflation the income thresholds that determine just how much wealthy Medicare beneficiaries must pay out of their own pockets. Over time, failure to index those income thresholds for inflation would allow more Americans to shoulder a greater share of their health-care costs.

Corporations of many stripes also would have to pay new fees.

The biggest single new revenue generator under Bush's user-fee section is $35 billion he'd collect over five years from airlines for use of the nation's air traffic control system. This would ostensibly eliminate ticket taxes and other charges imposed by airlines on consumers.

But this isn't necessarily good news for flyers, since the airlines would still be expected to pass on the new costs to the flying public. It simply would make funding of the Federal Aviation Administration less vulnerable to swings in passenger traffic.

Businesses that still offer pensions to their employees would get nicked too. The president seeks almost $5.5 billion over five years from increases in the premiums that companies pay to the Department of Labor for defined-benefit pensions. This would help close the $19 billion deficit faced by the Pension Fund Guaranty Corp., which pays worker pensions, at least in part, when employers go bankrupt.

Bush also seeks to raise $325 million in fees from U.S.-based businesses that are seeking certification from the Department of Labor that they cannot find sufficient workers in the United States and need to bring in foreign workers.

And he envisions raising $461 million in user fees to fund regulation by the Commodity Futures Trading Corporation. The CFTC regulates trading of contracts for future deliveries of everything from oil to orange juice, but remains the only federal financial regulator not funded by those it supervises.

No federal activity is too small to escape a fee. Take the Corps of Engineers. Its civil works division manages 4,300 recreation areas, mostly at lakes and reservoirs, on 12 million acres in 43 states. This costs $267 million annually. Bush wants the Corps to charge unspecified entrance fees at some high-use areas. This could raise $65 million in fees collected from ordinary citizens over five years.

The administration also hopes to raise $2 million over five years by charging conference fees for events put on by the Minority Business Development Agency, part of the Department of Commerce. It hopes to raise another $1 million through registration fees at Federal Election Commission events.

———

(c) 2007, McClatchy-Tribune Information Services.

Need to map

  Comments