“Over $600 million of these cuts will need to come from the Federal Aviation Administration, the agency that controls and manages our nation’s skies. As a result of these cuts, the vast majority of FAA’s nearly 47,000 employees will be furloughed for approximately one day per pay period until the end of the fiscal year, and in some cases it could be as many as two days.”
— Transportation Secretary Ray LaHood, White House briefing, Feb. 22, 2013
“In the Department of Transportation’s budget, and members of Congress will point out hundreds of millions of dollars on consulting contracts, on travel. Let’s not cut the air traffic controllers first, let’s go cut the waste.”
— Gov. Bobby Jindal (R-La.), NBC’s “Meet the Press,” Feb. 24
In the war of words over the automatic spending cuts known as the sequester, the administration has portrayed a grim picture of long lines at airports and closed airport towers if the required reductions at the Federal Aviation Administration are allowed to proceed.
“The furlough of a large number of air traffic controllers and technicians would require a reduction in air traffic to a level that could be safely managed by the remaining staff, resulting in slower air traffic in major cities, as well as delays and disruptions across the country during the critical summer travel season,” says an administration statement.
Not so fast, Republicans have countered. The FAA’s budget has soared, but air traffic has declined since the Great Recession. Why is more money needed for less?
The House Transportation Committee staff ran the numbers and came up with another way to achieve $600 million in cuts. They noted that the FAA did not use $200 million of its quarterly obligations in the first quarter and that it appeared to have budgeted $500 million for consultants, and $200 million for supplies and travel. (See page 977 of the Budget appendix.) So, by their math, the quarterly savings, a reduction in non-personnel costs and a hiring freeze would easily fund the sequester reductions.
Who’s right? Certainly the FAA statistics have the ring of “Washington monument” cuts — so dramatic that they seemed not quite credible. Let’s investigate.
We spoke to experts in the airline industry, and there is serious skepticism about the administration’s math. “There’s a lot of dramatics going on,” said Spencer Dickerson of the American Association of Airport Executives.
Dickerson questions why the FAA’s target list for the sequester includes closing 189 airport towers managed under contract — about 75 percent of such facilities, even though they comprise 28 percent of all tower operations. (By contrast, just 49 FAA-managed towers are on the list.) The Transportation Department Inspector General last year found that the program “successfully provided air traffic services to low-activity airports at lower costs than the Agency could otherwise provide.”
But the FAA says that the list was constructed by looking at towers with fewer than 150,000 operations a year — and fewer than 10,000 commercial operations.
Moreover, an FAA official said, the cost savings — which Dickerson estimated at about $50 million over the seven months remaining in the 2013 fiscal year — are more quickly realized with contract towers. That’s because the employees are not FAA personnel and would lose their jobs, while terminating an FAA controller would take much longer. Dickerson estimates that 1,000 controllers will become unemployed at the contract towers if the sequester plan is implemented.
Meanwhile, FAA controllers also can be moved to fill in gaps at other facilities, though they would need to be trained on handling the new air space.
Now let’s look at the case made by the House Transportation Committee and the FAA’s explanation.
The biggest issue for the FAA is that 71 percent of its operations budget goes to pay salaries for controllers, supervisors, air safety inspectors and technicians. When an agency with high personnel costs is asked to cut about 5 percent of its annual budget in just seven months, by definition a large chunk of that has to come from personnel.
The travel season also is not consistent, as traffic is higher in the spring and summer. Thus, the anticipated savings from the first quarter, touted by the House Transportation Committee, is illusionary. Here’s how the spending broke down in fiscal year 2012:
First quarter: $2.1 billion
Second quarter: $2.6 billion
Third quarter: $2.5 billion
Fourth quarter: $2.4 billion
Average: $2.4 billion
In other words, in 2012, it might have looked like there was a $300 million savings in the first quarter, but higher spending in later quarters made the average per quarter higher. FAA officials anticipate the same pattern occurring this year.
As for expenditures on consultants and travel, FAA officials say that is an incorrect explanation of the data. Officials say $514 million spent on “advisory and assistance services” refers not to consultants but to operational contracts to support the air traffic control system.
That means things like telecommunications and weather radar — assistance that helps maintain the integrity of the system. Consultant contracts amount to $21 million, but that mostly means environmental experts who check to make sure noise regulations are being followed.
The $154 million in “travel and transportation of persons” refers mainly to on-site equipment repair, FAA officials said. It also includes travel for new controller training, but that will be suspended as part of the sequester.
The Fact Checker, in an earlier life, spent five years covering airlines and air safety, and the FAA explanations have a ring of truth. Personnel costs are a large part of the FAA budget, and they have jumped significantly because of a new union contract — reached through arbitration in 2009 — with controllers. The FAA estimates that the three-year agreement will cost $669 million more than extending previous work rules.
FAA expenses have also climbed because, under congressional pressure, it has bolstered the ranks of aviation safety inspectors. The FAA is also investing in the NextGen air traffic control system, which relies on satellites, rather than ground equipment, to guide aircraft. (Officials say the sequester may affect NextGen implementation.)
Here’s how the FAA budget has grown (before adjusting for inflation), even as air travel has fallen:
FAA Operations Budget
FY 2008: $8.74 billion
FY 2009: $9.042 billion
FY 2010: $9.350 billion
FY 2011: $9.513 billion
FY 2012: $9.653 billion
FY 2008: 22,347,404
FY 2009: 19,991,868
FY 2010: 19,742,575
FY 2011: 19,800,742
FY 2012: 19,440,716
For air travelers at major airports, the effect of sequester may simply be as if the entire United States has a permanent bad weather day.
At Chicago’s O’Hare airport, for example, there are three runways and a total of 76 controllers. One of those runways is managed by an auxiliary tower, which requires three controllers in the day and three at night. (There are no controllers during the midnight shift.) But if controllers are required to take a furlough day once or twice a pay period (two weeks), it may be difficult to keep that tower manned while also maintaining the full complement of controllers at the main tower.
Thus, FAA officials anticipate the auxiliary tower would be closed, meaning the third runway could not be used. On average, the three Chicago runways can handle 112 flights arriving per hour. But with the third runway not used, only 72 flights can be handled an hour, according to FAA data. That relatively minor decline in personnel would then reverberate through the whole system.
The Pinocchio Test
On balance, the FAA makes a better case. (The House Transportation Committee did not respond to our request for a rebuttal of the FAA’s explanation.) The across-the-board cuts required by the sequester appear to leave little wiggle room, and so the FAA assertions have the appearance of a Geppetto Checkmark.
Still, Republican lawmakers on Tuesday requested more information from the FAA about its spending plans, and we think it would be prudent to wait for more data.
So we will hold off making a final ruling for now.
Check out our candidate Pinocchio Tracker