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. It is in keeping with the desire of the administration and congressional Republicans to streamline government and transfer some functions into private hands.
President Trump 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.
His proposal would transfer all air traffic control assets — control towers, routing centers and several billion dollars in tracking systems — to a private, nonprofit corporation without charge. Removing air traffic control operations from the FAA would allow it to focus solely on its role as a safety regulation, according to an administration blueprint of the plan.
“The current [aviation] system cannot keep up, has not been able to keep up for many years,” Trump said at a White House ceremony. “We’re still stuck with an ancient, broken, antiquated, horrible system that doesn’t work.”
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 hear 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.
The administration hopes to win congressional approval to spend an additional $200 billion in tax dollars on infrastructure in 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,” an administration official said.
While separating air traffic control from the FAA has been discussed for decades and was proposed under the Clinton administration, the proposal’s current iteration has fractured the airline industry, divided 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.
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. “Government bureaucracy has held back innovation in American aviation. It’s time to bring our aviation system into the 21st century.”
The four-page White House plan tinkers with Shuster’s 2016 bill in what administration officials said was an attempt to ensure that airlines do not dominate the corporation’s board. The initial seats would be assigned to various entities — including the airlines, the unions, small-plane operators, airports and the government — but that configuration would evolve.
“Going forward, it should operate like any other board and perpetuate itself and not be divided out by special interest groups,” a senior White House official said.
The corporation would pay for itself through user fees for airlines and “reasonable” fees passed on to passengers, the administration said.
“There will be absolutely no congressional review of the fees that would be paid,” said Rep. Peter A. DeFazio (Ore.) the ranking Democrat of Shuster’s committee and an opponent of the plan.
The Trump administration’s endorsement could provide the momentum needed to get the proposal through both houses and to the president’s desk for his signature.
If Shuster and Speaker Paul D. Ryan (R-Wis.) muscle the bill through the House, the narrower GOP margin in the Senate will require support from both sides of the aisle.
Commerce Committee Chairman Sen. John Thune (R-S.D.) said that “getting a bill to President Trump’s desk will require bipartisan support, as well as a consensus among the aviation community on a way forward.”
Sen. Bill Nelson (Fla.), the ranking Democrat on Thune’s committee, was blunt in his opposition: “Handing air traffic control over to a private entity partly governed by the airlines is both a risk and liability we can’t afford to take.”
The corporation also would have the authority to adjust air routes after seeking public comment. As FAA modernization has rerouted many jetliners, people in many neighborhoods near airports have complained about the noise. “If it happens to be causing huge numbers of noise complaints, tough luck, go talk to the private corporation,” DeFazio said.
The issue on Capitol Hill has not been the performance of the 14,000 air traffic controllers. 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 that a spark plug is what 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.
Congress’s perception that NextGen was not moving fast enough was 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 Air Lines — 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 (NATCA) backed Shuster’s plan, saying the corporation would ensure more stable funding than Congress could provide, while the 11,000-member Professional Aviation Safety Specialists (PASS) 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 NATCA, said his union would “evaluate whether [the Trump plan] satisfies our union’s principles, including protecting the rights and benefits of the ATC workforce.”
The wording of the White House paper specifies twice that current federal employees would 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.