Alaska
Opinion: A plea to Alaska’s congressional delegation for responsible economic policy
The Trump Administration’s unilateral imposition of tariffs, tax cuts for the rich and elimination of cabinet departments and federal employees invite U.S. economic calamity.
The trade war tariffs will neither reduce U.S. trade deficits nor bring about a renaissance in American manufacturing. Federal government revenue generated by these tariffs will cover only a fraction of the revenue lost to tax cuts proposed in the federal budget bill. The oppressive, indiscriminate federal workforce reductions brought about by the Department of Government Efficiency raise deep concerns about the delivery of immediate critical health, safety and welfare services and longer-term agency function. One would be hard pressed to craft a more irresponsible economic policy. It punishes the poor today and future generations of Americans.
The Trump fiscal plan is corrosive for the U.S. as a whole and disastrous for Alaska in particular. Consider each of these fiscal plan elements in turn:
Trade war
The Trump administration’s heavy-handed tariffs on steel, aluminum, automobiles and other raw materials and finished goods are illegal and will raise the costs of imported cars, equipment, machinery and supplies to American manufacturing firms and ultimately result in higher costs passed through to intermediate goods and end-product consumers. In general, a tariff on imported goods and services amounts to a sales tax levied on domestic, U.S. businesses and consumers. It’s a highly regressive form of taxation, hitting low- and middle-income households the hardest. Right now, the blended ‘sales tax’ rate on all imported goods stands at 17.8 percent, up 15 points from its pre-2025 levels. Since imports are more than 11 percent of GDP, it’s a huge pending inflation uptick to consumer prices, which can already be seen in the recent, steep decline in consumer sentiment. Beyond this, the chaotic, haphazard implementation of tariff policy is acutely counterproductive to business investment because trade policy predictability is the cornerstone of well-managed fiscal policy. This is why federal law does not authorize the president to impose tariffs without congressional approval.
For Alaska commerce, which lies at the very edge of the global logistics, the impact from this hurtful cost structure and supply chain disruption has already fueled business network chaos and American brand destruction. Other damages include 1) weakened crude oil price impacts on state royalty and tax revenue, on Permanent Fund earnings, and on oil company capital project optics; 2) time-critical Alaska seafood market disruption from China and other Asia-Pacific counter-tariff policies; 3) falling tourism bookings and 4) disastrous cost increases on the already budget-stressed Alaska LNG energy lifeline. The ultimate outcome of this trade war for Alaska and American business is higher structural inflation, investment contraction, business slowdown, rising unemployment, climbing interest rates, and widening housing and stock market implosion – all tipping the U.S. and especially Alaska toward a recessionary downward spiral. And all entirely unwarranted and unnecessary.
Federal budget and tax cuts. The proposed “big beautiful” budget bill passed on May 22 by the House of Representatives will deepen federal debt to $40 trillion or to 125 percent of GDP by 2035. In response to this nightmare scenario, Moody’s rating agency lowered the U.S. government’s credit score. The U.S. bond market reacted; yields on medium- and long-term US Treasury bonds spiked yet again. According to CBO estimates, the proposed tax cuts will lower after-tax income to the bottom 40% and raise after tax-income to the richest 10%. In addition to tariff shocks, Alaska household disposable income and business earnings will be impaired by the combined impacts of regressive income taxation and higher interest costs.
Beyond these disturbing policy and market dislocations, the proposed budget bill imposes unconscionable safety net impairment to America’s most vulnerable population, including added work requirements and cuts to healthcare spending ($715 billion), SNAP/food stamps ($300 billion), and Medicare ($500 billion). Alaska’s 279,000 Medicaid recipients (including 109,000 children) would face about $3 billion in uncovered healthcare costs for which no safety net alternative exists.
Department of Government Efficiency actions. Over the past 90 days, DOGE has carried out indiscriminate layoffs of about 280,000 federal employees and contractors without consideration for organizational structure and job function; all in the quest to save money by eliminating waste. The layoffs have extended beyond federal agencies, affecting contractors and nonprofit organizations that rely on federal funding. The ripple effect has led to additional job losses, with over 4,400 positions eliminated in related sectors.
Alaska’s 15,000 federal employees, including about 8,000 military, play a disproportionate role in our economy, both in public service delivery and in disposable income. Alaska’s federal workforce serve in mostly year-round jobs, are among the state’s highest paid workers and, critically, they spend locally. Setting aside diminished quality-of-life, public safety and security, a 15% reduction in Alaska’s federal workforce — well below DOGE 20-30% federal reduction target — would result in direct, devastating $250 million in lost wages to local business spending, based on $1.6 billion in reported Alaska federal workforce earnings in 2024 from Alaska Department of Labor and Workforce Development. Add to this further indirect, additional multiplier losses that would follow in step.
Taken together, the Trump Administration’s tariffs and tax cuts will cause economic chaos and destruction. So far, global tariffs — even those recently scaled back — have resulted in trillions of dollars in U.S. capital market destruction, enormous financial market instability, and the promise of rising inflation with slowing economic growth. President Trump’s faulty perception of tariff ‘medicine’ to fix bilateral trade deficits and to generate new federal revenue is analogous to a physician prescribing heavy chemo doses to a perfectly healthy patient. Furthermore, giving gigantic tax cuts to the wealthiest households is like to prescribing steroids to the now-ailing patient — due entirely to unnecessary and irresponsible tariff poisoning! And DOGE’s reckless efforts have brought disruption and dysfunction to all levels of the federal government’s responsibility for: protecting individual rights, overseeing infrastructure and commerce, and providing a safety net lifeline.
Bottom Line: The Alaska congressional delegation must continue to build the congressional coalitions to accomplish three critical things:
• Assert congressional tariff-making authority and oversight to reign in the president,
• Restore congressional authority for federal program formation and spending, and
• Craft a budget that protects the safety net and keeps guard rails on federal deficit expansion.
Will Nebesky is an economist and pilot who lives in Anchorage.
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Two US soldiers were wounded by a brown bear during a training exercise in Alaska on Thursday, the US Army stated.
Anchorage Daily News reported that the soldiers were from the 11th Airborne Division, and that the exercise had been a “land navigation training event” near Joint Base Elmendorf-Richardson.
State wildlife officials said that the bear attack seemed to be a defensive one, from a bear which had recently emerged from its den. Staff members from the Alaska Department of Fish and Game collected evidence at the scene in an attempt to learn more about the bear, such as its species and gender.
“The incident is currently under investigation, and we are working closely with installation authorities and local wildlife officials to gather all relevant information and ensure the safety of all personnel in the area,” the 11th Airborne Division said in a statement, reported ABC News.
ABC News also cited an 11th Airborne Division spokesperson, Lt.-Col. Jo Nederhoed, who said that the two soldiers had been seriously wounded, but were receiving care at a hospital in Anchorage, and had shown improvement by Saturday morning.
“We hope both individuals have a full and quick recovery, and our thoughts are with them during this time,” Fish and Game Regional Supervisor Cyndi Wardlow said in a statement reported by Anchorage Daily News. “In this case, having bear spray with them in the field may have saved their lives.”
Both of the soldiers reportedly had and used bear spray during the attack.
The bear’s condition and whereabouts are currently unknown.
Up, up and away … that’s where most travel prices are going.
It’s true. Not only are our nation’s geopolitical thrusts in the Mideast affecting the cost of your fill-ups, every component of your trip from airfares to car rentals and hotel stays are subject to price hikes.
Imagine filling up a jetliner with jet fuel that’s doubled in price. It’s enough to melt your credit card, regardless of the number of points you get for every dollar spent!
Because the price of oil affects everything, higher prices are eating away at your travel budget in many ways.
Bag fees
There’s lots of press on this. All airlines are increasing their checked-bag fees because of the jump in fuel prices.
Back in 2009, Alaska Airlines instituted a $15 fee for the first checked bag and $25 for the second bag. At the time, there was no charge for the first bag and a second bag was $25.
Last week, Alaska Airlines, along with other major airlines, increased its fees to $45 for the first checked bag and $55 for the second bag. Delta Air Lines charges the same.
Even if the cost of oil comes down, I don’t expect bag fees will ever be reduced.
Travelers who live in Alaska are somewhat insulated from the new hikes because both Delta and Alaska Airlines offer two free checked bags, with conditions:
1. Alaska offers two free checked bags for travelers flying to or from Alaska who are enrolled in Club 49. This does not affect other flights on Alaska. Separately, ATMOS credit card holders can get a free checked bag. Also, elite members of the ATMOS scheme get one or two free checked bags systemwide.
2. Delta offers two free checked bags for travelers flying to or from Alaska who are SkyMiles members who live in Alaska. Again, this does not apply to other Delta flights. Separately, Delta American Express cardholders can get a free checked bag.
3. Elite-level travelers with the oneworld airline cartel, including Alaska Airlines, can get one or two checked bags on American, British Airways, Japan Airlines, Qantas or other oneworld carriers.
[Anchorage’s international airport rolls out self-driving wheelchairs]
Main Cabin vs. Basic Economy
The spread between the lowest available price, Basic Economy, and a more flexible ticket, Main Cabin, has increased. While the difference used to be $20-$30 each way when the Basic Economy scheme was introduced in 2018, the round-trip upcharge now can exceed $100.
For example, the lowest Basic fare to Portland is $337 round-trip on Alaska Airlines. The upcharge to Main Cabin, with full loyalty points, pre-assigned seats and more flexibility on changes and cancellations, is $447, a 33% upcharge.
This trend is not specifically attributable to the new Iran War. It’s just a cost that continues to rise.
New fees
I’m impressed at the creativity of airline people who dream up new fees. Here are some of my favorites from Alaska Airlines:
1. Phone reservations: $15
2. Partner award booking fee: $12.50
3. Pet travel fee: $100 in the cabin, $200 in the baggage compartment with a kennel
4. Left on board item return fee: $20
On Condor Airlines, operating the only nonstop service from Anchorage to Europe, travelers can choose from four different bundles in economy class. The least-expensive, Economy Zero, from $840 round-trip, features fees for travelers:
1. Carry-on bag fee, up to 8kg: $35; a small bag like a purse always is included for free
2. Checked bag: $75
3. Airport check-in: $30
All three of these fees are included in the next-highest fare bucket, Economy Classic, from $900 round-trip. It’s cheaper to buy the bundle than it is to buy the components a la carte. Seat assignments are additional, from $25 for economy.
Airfares on the rise
There are a few good deals available for travel to select West Coast/Intermountain destinations in May, including:
1. Anchorage-San Francisco on Alaska Airlines, from $307 round-trip. Fly May 15-28 only. Add $90 round-trip for Main cabin.
2. Anchorage-Los Angeles on Alaska Airlines, from $317 round-trip. May 15-25 only. Add $90 round-trip for Main.
3. Anchorage-Phoenix on United, Delta or Alaska, from $267-$287 round-trip. Fly May 8-June 9 only. Add $90-$100 for Main.
4. Anchorage-Denver $357 round-trip on Delta. Fly May 8-June 9 only. Add $90 round-trip for Main.
For travel to other destinations, or later in the summer, be prepared to pay more.
Flying to Hawaii? Alaska Air’s nonstop prices out at $706 round-trip between May 30 and June 6. Add $110 round-trip for Main.
Nonstop flights from Anchorage to Salt Lake City start at $669 round-trip with Delta on May 17. That’s $100 more than the cost for the same flights last month. Add $90 more for Main.
Hotel costs continue to rise, accompanied by pesky resort fees.
The Outrigger on the Beach in Waikiki is a very nice beachfront hotel. It’s not plush, or the nicest property. But it’s solid. The cost is $334 per night.
But there’s more: a $50 per night resort fee, plus a variety of taxes and charges, totaling $112.55 per night.
Down in Seattle, the Sound Hotel in the Belltown neighborhood is marketed by Hilton. The discounted rate for “Honors” members — it’s free to join — is $313.34 per night for a king room in late May. Taxes and fees add an extra $56.40 per night.
There’s no appreciable bump yet for hotel rates as a result of the oil price surge. Yet. But if these hotel rates seem high, they’re in line with hotel rates in Anchorage this summer. At the Sheraton in Anchorage in June, it’s $450 per night, plus $54 in taxes and fees, when booked at Expedia.
Car rentals are not cheap
My go-to site for car rentals is the Costco site, which compares major brands and automatically includes Costco discounts.
In Las Vegas, for a one-day rental in May, Budget charges $67 per day, which includes taxes and fees of $22.77. In Anchorage, the same kind of car, medium SUV, costs $92.97 with Alamo.
The biggest differences so far in car rental rates seems to be the bill you’ll pay when you fill up the tank before returning. There’s no appreciable jump in prices because of the new war.
When it comes to making travel arrangements for the spring and summer, it’s more risky making completely non-refundable arrangements.
I made the decision to purchase most of my summer travel plans in advance, but only after determining I would not need to change the dates. Particularly with airline tickets, it’s expensive to change your dates.
There’s lots of uncertainty regarding travel arrangements, particularly international travel. As fuel prices go up due to oil shortages, travel companies will look for ways to recoup the increased costs. In most cases, those higher costs will be borne by travelers.
ANCHORAGE, Alaska (KTUU) – The reopening of the Strait of Hormuz has led to a decrease in oil prices nationally, but Alaska’s senior senator said the state faces a different situation that could threaten rural communities.
“If you can’t produce power because you don’t have the diesel or you just can’t pay the prices, your little communities can collapse,” Sen. Lisa Murkowski, R-Alaska, said at a Friday press conference at the Arctic Encounter Summit in Anchorage.
The price of oil has been a double-edged sword for Alaska. On one hand, the increased price of North Slope oil brings more revenue to the state, but consumer prices can also rise.
North Slope oil prices were $106.36 a barrel on Thursday.
“This is a very precarious time,” Murkowski said. “Our state has enjoyed a bounty because we have benefited from the higher prices of oil that goes into our treasury, but it’s the Alaskans in … the off-road communities that are threatened to be hit most hard.”
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