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Aviation Spending Guarantee Mechanisms
holding-down of FAA capital spending to free up trust fund resources for FAA operations costs as
a violation of the intent and spirit of the 1970 Act.6
A Note on the Unified Congressional Budget and the Aviation
Trust Fund
The adoption of the 1970 Act followed closely on the heels of the 1969 congressional adoption of
the unified budget concept, a change that would have ongoing influence on both the budgetary
treatment of trust fund revenues and the operation of subsequent spending guarantees that rely on
trust fund resources.' Under the unified budget concept, all trust fund receipts and expenditures
were made part of the annual federal budget. Consequently, trust fund amounts, collected and
spent, influence the overall budget deficit or surplus totals. This, in turn, can have an impact on
the budgetary treatment of trust fund-supported programs and activities. Although the inclusion of
the aviation trust fund within the unified budget was not a major issue during debate over the trust
fund's creation, the unified budget has, historically, had an impact on trust fund spending levels.
Within the context of the unified budget, an excess of aviation trust fund revenues over
expenditures can be seen as an offset in federal deficit computations. In some cases, however, the
balance may be seen as having been spent on non-aviation programs or purposes. Because the
balance is invested in short-term Treasury notes (the interest is payed to the aviation trust fund),
the federal government is lending itself an amount roughly equal to the balance. This, in effect,
frees up the money for spending elsewhere in the budget without pushing up the overall budget
deficit or putting pressure on budgetary ceilings established by the congressional budget process.
During the history of the aviation trust fund, concerns have been raised that this situation creates
an incentive, for those whose priorities for non-aviation spending (or for deficit reduction) are
higher than for aviation spending, to hold-down federal aviation trust-fund-supported spending on
aviation. This situation, where the trust fund's unexpended balance (at times, somewhat
inaccurately referred to as a surplus) is allowed to grow and is not spent on federal aviation
programs and activities, has been opposed by much of the aviation community and by the
transportation authorizing committees.9 The unexpended balance has also been a factor cited in
attempts, since the creation of the trust fund, to legislate mechanisms that would encourage full
funding of the FAA's capital budgets and assure that the aviation trust fund revenues are spent for
aviation purposes only.
6 U.S. Congress. Senate. Committee on Commerce. Aviation Subcommittee. Airport and Airway Development and
Revenue Acts Amendments of 1971, Hearings on S. 1437. Hearings held June 22 and 23, 1971. "Serial No. 92-19" 86 p.
"To amend the Airport and Airway Development and Revenue Acts of 1970 to further clarify the intent of Congress as
to the priorities for airway modernization and airport development, and for other purposes."
In making this decision Congress apparently relied on President Johnson's Commission on Budget Concepts. See
President's Commission on Budget Concepts. p. 109. Report of the President's Commission on Budget Concepts.
Washington, U.S. GPO 1967.
8 Because the mechanism of borrowing from the trust fund, in effect, moves the amount borrowed to the general fund,
it is technically impossible to prove that these funds are spent on anything in particular. They become indistinct from
all the other revenues flowing into the general fund.
9 Because there are outstanding commitments against these balances, the entire trust fund balance is generally not
considered available for further spending and most observers consider the "uncommitted" balance to be a better
indicator of the amount of trust fund resources that could be available for additional spending.Congressional Research Service
3
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Kirk, Robert S. Aviation Spending Guarantee Mechanisms, report, March 25, 2008; Washington D.C.. (https://digital.library.unt.edu/ark:/67531/metadc808596/m1/7/: accessed July 17, 2024), University of North Texas Libraries, UNT Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.