White House formally backs plan to transfer air traffic control system to private corporation

WASHINGTON – The White House on Monday formally endorsed a plan to spin off more than 30,000 federal workers into a private nonprofit corporation, separating the nation’s air traffic controllers and those who work on a $36 billion modernization program from the Federal Aviation Administration.

The Trump administration proposal essentially is an endorsement of a plan that failed to gain sufficient traction in Congress last year. The plan is in keeping with the stated desire of the administration and congressional Republicans to streamline government and transfer some functions into private hands.

President Donald Trump condemned the Obama administration and the FAA for wasting billions on modernization without results.

“The current system cannot keep up, has not been able to keep up for many years,” Trump said at White House ceremony. “We’re still stuck with an ancient, broken, antiquated, horrible system that doesn’t work.”

He said that during the Obama administration the FAA “didn’t know what the hell they were doing” in spending $7 billion to modernize the aviation system.

Monday’s announcement launched a week in which the administration will focus on infrastructure, with Trump traveling to Cincinnati on Wednesday to discuss the movement of freight on inland waterways, and on Thursday he has invited mayors and governors to the White House to discuss their infrastructure needs.

Trump will wrap up the week with a trip to the Department of Transportation to discuss ways to change rules and regulations to expedite project construction, with the goal of compacting the process from an average of eight years to two years or less.

The administration hopes to win congressional approval to spend an additional $200 billion tax dollars on infrastructure in the coming years, administration officials said.

“We absolutely do feel that the infrastructure package can be accomplished this year. We are working every day to that end,” said one administration official.

While the separating air traffic control from the FAA has been discussed for decades and was proposed under the Clinton administration, in its current iteration it has fractured the airline industry, divided the unions that represent the federal workers, raised the ire of private plane operators, been opposed by ranking House Democrats and raised eyebrows in the Senate.

White House officials in briefing reporters said they had given reassurance to the Department of Defense, rural airports and operators of non-commercial planes that their interests would be protected under the proposal.

The Trump administration endorsement, first signaled in a preliminary budget released in March, could provide the momentum needed to get the proposal through both houses and to the president’s desk for his signature.

Rep. Bill Shuster, R-Pa., chairman of the House Transportation Committee, embraced the dormant concept last year and fought to win the approval of his committee. But the bill it passed got no attention on the House floor, and there was muttering on the Senate side that suggested it had no future there.

“I first spoke to President Trump back in 2014 about the need for reform, and I’m glad to be working on it with him in 2017,” Shuster said. “President Reagan once said ‘government is not the solution to the problem; government is the problem.’ Government bureaucracy has held back innovation in American aviation. It’s time to bring our aviation system into the 21st century.”

The issue on Capitol Hill has not been the functioning of the 14,000 air traffic controllers, who are universally subject to praise for their devotion to safety when mentioned in the House or Senate committees that oversee them.

Instead, Congress has expressed enormous frustration over the pace of the FAA’s modernization program, called NextGen.

While commonly referred to as a GPS-based system for directing the flow of aircraft, that simplistic explanation is akin to saying it’s the carburetor that makes a car’s wheels go around.

The reality is that NextGen is a complicated group of systems intended to smooth the flow of airplanes, speed air travel, save fuel and accommodate a 20 percent increase in passengers in the next two decades.

The current system is radar-based and requires planes to fly from one waypoint to the next rather than in a straight line to their destination. (Complaints about low-flying airliners have been legion across the country as the first of several NextGen projects has come on line.)

Selling Congress and the airlines, who would bear some of the cost, on a multibillion-dollar modernization program seemed like a dicey proposition, so about a dozen years ago the FAA came up with a catchy name for all its projects: NextGen.

That gave the FAA a single name to use when it sought money from Congress. But it also gave Congress a single program to hold accountable when elements of NextGen moved slowly, or not at all.

Congress’s perception that NextGen wasn’t moving fast enough was amply bolstered by critical reports from the inspector general’s office and from the Government Accountability Office.

The FAA, however, has been able to point to success in recent years with some elements of NextGen.

When Shuster revived the concept of moving the controllers and the NextGen program to a private nonprofit corporation run by a board of directors, one of the big four airlines – Delta – opposed the move and parted company with the lobbying group Airlines for America, which endorsed it. Operators of small planes and corporate jets – known as “general aviation” to distinguish them from the airlines – pushed back out of fear the airlines would dominate the corporation’s board.

That National Air Traffic Controllers Association backed Shuster’s plan, saying the new corporation would ensure more stable funding than Congress could provide, while the 11,000-member Professional Aviation Safety Specialists union strongly opposed it.

“It is unfathomable, even dangerous, to consider gambling with the future and safety of our air traffic control system through privatization,” PASS President Mike Perrone said in a statement last month.

Paul Rinaldi, president of the National Air Traffic Control Association, whose union supported Shuster’s bill last year, said of the new plan, “We look forward to reviewing the specifics of the air traffic control reform legislation so we can evaluate whether it satisfies our Union’s principles, including protecting the rights and benefits of the ATC workforce.”

Mirroring much of Shuster’s 2016 proposal, a four-page White House proposal underscores that “no group should have the appearance of influence over the board of directors,” countering the argument that the airlines would dominate the board.

The White House plan tinkers with Shuster’s original plan in an attempt to ensure that airlines don’t dominate the board. Rather than assigning seats on the board to entities like airlines, unions, general aviation and the public, the initial selections would be similarly selected.

“We have totally unended that,” said a senior White House official. “Going forward it should operate like any other board and perpetuate itself and not be divided out by special interest groups.”

The new corporation would pay for itself through user fees for airlines and “reasonable” fees passed on to passengers, the administration said. It also would have the authority to adjust air routes after seeking public comment, recognizing that NextGen routing will cause noise over houses that haven’t previously experienced low-flying planes.

The wording of the White House paper may cause concern for union members who would go off the federal payroll. It specifies twice that current employees will retain their pay and benefits and be able to participate in federal retirement and health-care plans. It does not say that the corporation’s new hires should expect the same pay or benefits.