Wednesday, July 24, 2013

Flying Around the Sequester

By Rebecca Kaplan, National Journal 
July 24, 2013 | 11:36 a.m. 

 After five years and 23 temporary funding measures, air-travel associations hailed the stability that accompanied passage of the 2012 Federal Aviation Administration Reauthorization bill. With $63.4 billion under its belt for the next four years, the FAA can continue work on major projects, like modernizing air traffic control from a radar-based system to one called NextGen, which relies on GPS technology.

It would have been full-speed ahead—had the FAA’s budget not gotten caught up in the sequester cuts mandated by the Budget Control Act, when Congress failed to find other ways to reduce the nation’s expenditures.

When the agency said the cuts would have forced it to furlough air-traffic controllers—and close 149 towers at the very same small airports many members of Congress use to reach their districts—the House and Senate acted quickly. Lawmakers allowed the FAA to take $253 million out of the Airport Improvement Program, which provides grants to fund capital improvements at airports to enhance safety, capacity, and security.

But the fix was temporary. The FAA could face another round of budget cuts in the next fiscal year starting Oct. 1, and so far no one has a plan to stop them. Although the agency’s budget doesn’t fall under the jurisdiction of the House Transportation and Infrastructure Committee, the panel will oversee the use of available funds.

“There are no good options at this point, but it’s something we’re going to have to look at,” said Rep. Frank LoBiondo, R-N.J., the chairman of the panel’s Aviation Subcommittee. “Maybe it can be addressed in a broader picture.... That would be a better thing than an individual fix, but it’s obviously a huge problem.”

Committee members and the aviation industry do seem to agree on one thing: No one is interested in dipping back into the Airport Improvement Program again to keep operations fully funded.

“We took dollars that put construction workers to work building and repairing and investing in our airports ... and put [the money] into the day-to-day operations of the air-traffic-control system,” said Rep. Rick Larsen, D-Wash., the ranking member on the Aviation Subcommittee. “We are actually setting one group of people against another group of folks on this one.”

“It makes no sense to take more dollars out of the Airport Improvement Program and put it into operations, but if we choose to do that, members of Congress can’t be surprised a couple of years down the road when airports around the country that are big job creators are screaming for dollars needed to fix airports,” he added.

The widely held expectation is that Congress will fund the government with a continuing resolution when the fiscal year ends, leaving the FAA’s near-term funding in the hands of the House Appropriations Committee, as it has been for the past several years when Congress has failed to pass a budget.

“They should act like they have in all other CRs, which is manage their money, hold down their costs, and then wait for the final appropriations bill to be enacted before they take any drastic steps on that,” said a majority aide who, like most Republicans, maintains that the agency could have used more flexibility to manage its money after the first round of sequester cuts. “They can do it for the first quarter, maybe even a little longer, and then Congress will come in and decide within those larger budgetary constraints how much they get to operate.”

The House transportation appropriations bill awaiting floor time would fund FAA’s operations at $9.5 billion, which is lower than the $9.7 billion the agency received before the across-the-board sequester cuts. Still, that figure exceeds both the $9.1 billion in funding after the sequester cuts were implemented and the $9.4 billion available for operations after it was granted additional flexibility in May.

At a time when airlines are already operating on razor-thin profit margins, many in the industry don’t see room for further cuts. George Keleman, the senior vice president of government and political affairs at the Airports Council International–North America, advocated for raising the cap on the passenger facility charge to make up for lost funding. Anything to improve the agency’s flexibility at the local level would be welcome.

Others aren’t pushing for a specific solution to restore FAA funding. “We are not prescribing how it should be fixed; We’ll leave that to the experts and the members of Congress and the White House to find a solution,” said Sean Kennedy, the senior vice president for global government affairs at Airlines for America.

Meanwhile, the FAA is already warning that implementation of NextGen will suffer if it doesn’t have enough funding for all of its operations. “We will not enjoy the benefits or the stability that reauthorization was intended to provide until we end the sequester and its fiscal consequences and find a sensible long-term funding solution,” FAA Administrator Michael Huerta testified before the Aviation Subcommittee in July. The funding in the appropriations bill, he said, will force the FAA to “make tradeoffs between continued maintenance of the current infrastructure and NextGen modernization efforts.”

Oversight of the program’s implementation is a top priority for the committee, the majority aide said, noting the challenges of layering new technology on top of the existing system while maintaining safe air travel.

“In implementing such a radically different system, is the FAA actually structured and organized correctly to do that?” the aide said. “I think that’s something we will take a look at, and that’s something that will be a focus of the next bill.”