On October 8, the FAA Assistant Administrator for Policy, International Affairs, and Environment (left) made a compelling conclusion at an NAC meeting. One day later, the President of A4A (right) announced his initial list of legislative goals for the 2015 FAA Reauthorization. The tenor of the debate over this seminal legislation will be greatly influenced by the FAA’s number and such a substantial financial dilemma might engender a realistic discussion of privatization.
Rich Swayze is a relatively recent addition to the senior FAA executive team and he comes to the FAA with years of experience with the GAO and then the Senate Aviation Operations, Safety and Security. He obviously knows numbers. At an RTCA NextGen Advisory Committee, he announced that the FAA “can’t continue to provide the services we provide, implement NextGen, and recapitalize aging infrastructure without cutting programs or raising revenue.” To put a fine point on that pronouncement, he said that at the current spending and funding rates, there will be a $5 billion deficit by Fiscal Year 2022. That’s $5,000,000,000 of expenses exceeding funds! If that number is sound, the absolute primary, if not sole focus, of the 2015 Reauthorization Act will be how to increase the funds available to the FAA.
The next day at an International Aviation Club event, Nick Calio, A4A’s President and CEO made a major speech to “launch” his association for the 2015 FAA Reauthorization. As a former White House lobbying heavyweight, Calio knows the benefits of getting your message out early and often. So in his speech, he pitched the following issues:
· some US balance against the growing competition from fast-growing Middle East and Chinese air carriers, which benefit from governmental support (he devotes five pages of his 10 page speech to making the case that action is required) ,
· “Specifically, we want to first stop any –and I STRESS ANY–increase in taxes or fees.”
· “reverse government actions harming the industry, consumers, and the U.S. economy on the whole”,i.e.
o “Ensure that future regulations are based on sound science and technical information, an assessment of their economic impact, and reasoned cost-benefit analysis, including objective guidance from independent experts.
o Require DOT and FAA to complete a review of federal aviation regulations, in consultation with
industry stakeholders and provide recommendations to Congress on regulations that should be modified or eliminated”and
· several references to issues about aspects of the NextGen program which may or may not produce the benefits touted, citing the DoT IG’s and GAO’s criticisms.
“Transformational” is a word which Chairman Shuster has used in referring to the rewrite of the FAA’s authorization legislation. The A4A position repeats that phrase and Calio’s speech hints at solutions beyond the past model of funding and governance.
If Mr. Calio was aware of Mr. Swayze’s $5 billion number, his #1 priority might have been the funding/tax/fees issue. The bleak outlook of the FAA’s future finances might force stakeholders and legislators to debate seriously the “dreaded” privatization issue. The financial cliff may force those, who have found the underlying concept of moving ATO out of the federal government unacceptable, to regard such a change as the least bad option. Governance is always the most difficult “power” to resolve, but its resolution may be forced by this Gordian fiscal knot.