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New Fees in Obama Plan Won't Just Hit Millionaires

AP
Monday, 19 Sep 2011 | 6:07 PM ET

It's not just millionaires who'd pay more under President Barack Obama's latest plan to combat the deficit.

Plush Studios | Blend Images | Getty Images

Air travelers, federal workers, military retirees, wealthier Medicare beneficiaries and people taking out new mortgages are among those who would pay more than $130 billion in new government revenues raised through new or increased fees.

These fees are advertised as "savings" in administration budget documents.

Airline passengers, for instance, would see their federal security fees double from $5 to $10 for a nonstop round-trip and triple to $15 by 2017, raising $25 billion over the coming decade. Federal employees would contribute $21 billion more to their pensions over the same period.

Military retirees would pay a $200 fee upon turning 65 to have the government pay their out-of-pocket Medicare expenses. They'd also pay more for non-generic prescription drugs.

And it'll cost corporate jet owners a new $100 fee for each flight.

The fees aren't taxes. They're charged to people who use government services or receive benefits such as taxpayer-subsidized health care, and the fees typically defray the government's cost of providing a service.

The fee on corporate jets and other private passenger planes, for example, would raise about $1 billion a year to help finance the cost of air traffic control. Recreational flyers won't have to pay.

Many of Obama's proposals are retreads from earlier budget proposals, including those submitted by his predecessors. They're rejected year after year.

Some ideas, like requiring wealthier veterans to pay more for their health care, whip up opposition from powerful interest groups. Others, like the bigger security fee for flyers, seems too close to a ticket tax increase.

Unlike Obama's tax proposals, the new fees aren't all necessarily dead on arrival with Republicans. A group led by Vice President Joe Biden, for example, had tentatively agreed to increase the airline security fee before their talks collapsed in June. The Biden-led group was also eying an increase in pension contributions by federal workers.

Another new fee would increase by one-tenth of a percentage point the fee that mortgage giants Fannie Mae and Freddie Mac charge lenders to guarantee repayment of new mortgage loans. The administration says the fee increase would add $15 a month to the monthly cost of an average new mortgage.

Even without existing mortgages being affected, the fee increase would raise $28 billion over 10 years.

Some of the fees tilt toward the arcane. There's a plan to save $3 million a year by developing an electronic records system for hazardous waste shipments.

Another would give taxpayers $7 million more a year by giving the federal government a 50 percent share of receipts from geothermal leases on federal lands instead of just 25 percent, with the remainder going to the states.

Another proposal would charge $4 an acre on non-producing oil and gas leases on federal lands, raising $1 billion over a decade. The idea is to prod energy companies to get their leases into production or give them up and allow others to develop them.

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