Trump Mega Bill to Fund New Air Traffic Control System

Congress on Thursday passed President Donald Trump’s mega
bill, sending it to the Oval Office for his signature. The legislation included
more than $12.5 billion to improve the country’s challenged air traffic control
system, with funds to remain available through Sept. 30, 2029. 

The money will fund the new
air traffic control system plan introduced in early May by U.S. Department
of Transportation Secretary Sean Duffy. About a third ($4.75 billion) of the
ATC system budget was earmarked for telecommunications infrastructure
modernization and systems upgrades. Another $100 million was designated for air
traffic controller advanced training technologies.

The aviation and travel industry for years has called for
upgrades to the system as the number of near misses at airports and equipment
outages seem to have increased in recent years. The issue came to a head
beginning in late April and into May after multiple equipment outages at the
facility responsible for flights at Newark Liberty International Airport. 

The outages led to some air
traffic controllers taking leave due to the stress of the initial event on
April 28, United Airlines reducing
its schedule at the airport by 35 flights per day and the U.S. Federal
Aviation Administration temporarily reducing
hourly flight movements at the airport through Oct. 25.

“Throughout this entire reconciliation process, support
for modernizing our nation’s airspace has remained firm because it is a smart
investment that benefits all Americans,” Airlines for America said in a
Thursday statement. “Our country needs and deserves an air traffic control
system that builds upon our safety record, handles 21st century air traffic
volumes efficiently and provides innovation for our increasingly complex
system.” 

“This legislation is a giant step in the right
direction when it comes to improving America’s travel infrastructure and
security,” U.S. Travel Association president and CEO Geoff Freeman said in
a Thursday statement. “Bold, necessary investments in air traffic control
and Customs and Border Protection will make a meaningful difference in the
traveler’s experience.”

Additional Travel-Related Elements

Freeman’s reference to CBP was for the $4.1 billion in the
budget to hire and train at least 5,000 new U.S. CBP officers and $2 billion in
CBP retention bonuses to address ongoing staffing shortages, which will help
lower wait times at airports, according to U.S. Travel.

The bill also included $673 million to expand the biometric
entry-exit system at ports of entry in the U.S., which will “strengthen
border security and unlock future Visa Waiver Program expansion,” said
U.S. Travel.

A tax credit on “clean fuels” production, which
includes sustainable aviation fuel, was extended for two additional years, to
Dec. 31, 2029. “Growing domestic SAF production is expected to drive
substantial job creation and economic activity in heartland communities,”
Americans for Clean Aviation Fuels executive director Jeff Grappone said in a
statement. “The entire SAF value chain—including the farming, aviation,
manufacturing, oil and gas, and biofuels sectors—will continue to work together
to ensure that clean aviation fuels strengthen American energy independence and
security.”

The American Hotel & Lodging Association applauded the
inclusion of tax provisions “critical to the hospitality industry” in
a statement after the bill passed the U.S. Senate earlier this week.  Those provisions “prevent major tax
increases on both hotel employees and businesses,” AHLA president and CEO
Rosanna Maietta said. They also “provide small business hotel owners with
the level of certainty they need to effectively operate amidst tremendous
uncertainty resulting from years of inflation, trade impacts, and a softening
of demand within the broader travel sector.”

Frustration Among the Praise

Not all travel-related elements of the bill will have a
positive effect on travel. The bill also repealed incentives for the U.S.
electric vehicle market, which could affect car rental companies with EVs in
their fleets and corporations looking to include EVs in their programs. 

Tax credits valid until 2032 will now expire by Sept. 30,
2025, which could end up pushing up the cost of EVs. The bill also eliminates
Biden administration measures designed to give U.S. manufacturers a chance to
survive Chinese auto competition, according
to the New York Times, as demand for EVs and particularly hybrid cars
increases.

These changes paired with the February suspension of the $5
billion National Electric Vehicle Infrastructure program could spell upcoming
challenges for the EV industry.

Meanwhile, U.S. Travel called out the fact that federal
funding for Brand USA, the U.S. destination marketing organization, has not
been restored. Its federal match was reduced from up to $100 million annually
to $20 million as part of broader federal spending cuts. 

U.S. Travel’s Freeman also expressed frustration with the
bill’s “steep increases” to non-immigrant visa fees, which include a
new $250 Visa Integrity Fee for visitor visas, and it raises the Electronic
System for Travel Authorization fee for Visa Waiver Program travelers to $40
from $21.

“Failing to fully fund Brand USA is a missed
opportunity—especially as the administration seeks to maximize a historic slate
of global events on American soil,” Freeman said. “As Congress begins
work on FY26 appropriations, it must fully fund Brand USA and ensure visitor
fees are lowered, if not eliminated, wherever possible.”

Unite Here, the union that represents many hotel workers,
called the budget “a horror show that slashes services working-class
Americans depend on to fund tax-cuts for bosses and the ultra-rich,” Unite
Here secretary-treasurer Nia Winston said in a Tuesday statement. “It
would transfer billions of dollars to ICE to ramp up their mass-deportation
machine while taking healthcare away from 16 million people.”