This destructive and embarrassing episode should cause policymakers to take a serious look at long-term reform of the FAA and the way it and its programs are funded. It should also encourage us not to do the very same thing with surface transportation programs.

While many of us will justifiably criticize policymakers for putting their personal goals and politics ahead of what is good for the system and the nation, we should all recognize that we are responsible as well. The fact that the long-term authorization for the FAA and its programs expired at the end of Fiscal Year 2007 creates the vulnerability for aviation to get linked with debt-ceilings and other matters of high politics. The way to avoid this is for everyone to come to the policymaking table prepared to bargain and put the system on solid footing—not to just play the Washington game of telling all the other interests what is wrong with their positions, holding tight to our own parochial position papers and juicing up our constituencies in order to raise money and/or keep our organizations fed.

Two goals are clear: (1) we desperately need organizational reform of the FAA and the air traffic organization, removing it as much as possible from the yearly appropriations process and making it more accountable to its users and their needs; and (2) we require funding reform, better equating fees paid with services used and ensuring that we have a long-term stable pot of revenue that funds FAA operations as well as the capital needs of the NAS. We have tried and, to a marginal degree, succeeded in the past with reforms that have slowly moved us in these directions but this unfortunate episode testifies to the fact that the “Airport and Airway Trust Fund Era” has run its course. Let’s agree to move on.

The FAA and surface transportation authorizations create an enormous opportunity to reinvest in our infrastructure at an opportune time. The prices of materials and labor are low, interest rates are favorable, new demand is required for our economy and we need to put people to work. We need to check our own egos at the door and press policymakers to do their jobs.

Steve Van Beek

The FAA’s plight – and that of the 4,000 people now without incomes, as well as that of passengers and airlines inconvenienced and out of pocket due to the Congressional failure to act – is another commentary on the unhappy triumph of ideology over common sense.

Hopefully, everyone outside the beltway that understands the situation – and they are probably few, since there is little if any of either truth or explanation in press reports – knows that the reason FAA does not have the funds it needs to function has nothing whatever to do with the FAA and everything to do with ideological positions regarding unions and support for service to small communities.

The largest point of contention, apparently, is the recent decision by the National Mediation Board to change the way in which votes are counted in elections to determine whether a union should be certified. For decades prior to 2010, unions were required to get at least 50% of the total population to vote in favor of unionization; non-voters, were, in effect, counted as “no” votes. According to the new rule, a union needs to achieve only a majority of those voting. Thus, in a 5,000 person group in which only 2,000 vote, 1,001 yes votes would allow the union to prevail. While one could argue that the change in policy is an important public policy issue, it should be debated in a legislative forum considering that issue of public policy rather than being used as a bludgeon to cripple the operation of an essential element of the national transportation infrastructure.

There is also disagreement between Democrats and Republicans about whether the U. S should or should not provide aviation service subsidies for small cities, to which commercial service is not justified in the absence of subsidies. While this is a legitimate issue of public policy, it has nothing to do with whether we should strengthen and maintain the aviation infrastructure we already have and should be argued and decided in a forum devoted to aviation policy rather than in the context of a bill to provide funds for ongoing FAA functions.

There is, of course, a clear way out of the dilemma. Unhappily, finding it involves adopting a more satisfactory governance mechanism than the country now seems capable of mustering. Until those who serve in Congress are willing to set aside ideological differences in favor of common sense, and put country and citizen needs ahead of perceived political purity, resolution seems unlikely.

Imagine somerun running for office on the slogan "lose billions to save millions." They would (hopefully) fail miserably. But that is exactly what elected officials are pursuing as policy with respect to FAA. Every day without FAA authority we are losing about $30 million per day. Essential Air Service (EAS) only costs $16 million per year. If the idea here is to move towards fiscal responsibility, current policy represents the opposite of that notion.

This is not unusual, unfortunately. Congress often focuses on what they see as obvious small examples of waste while neglecting the larger ones, particularly in transportation. For example, earmarks are actually a very small portion of wasteful spending but are pointed to as the source of the problem. Amtrak is an incredibly small expense and hardly bankrupting the nation, but their per-passenger subsidies are often decried as well. And whatever your view on EAS, these "outrageous" per passenger air subsidies are not the expense we urgently need to tackle. Rather, as Bob Poole notes, we need to address the out-of-date Air Traffic Control (ATC) system that is substantially hindering our economic growth. Now we have furloughed the very people working on ATC modernization due to a fight over EAS. If fiscal responsibility is the goal, we are not meeting it by a longshot.

A two-step process is required to get us out of this mess.

Step One: Congress needs to pass a clean extension now so that:

· 4,000 furloughed FAA employees can get back to work and their families can stop worrying about how the bills are going to get paid.

· The ticket tax can be reinstated so we don’t lose another $200 million per week that should have been deposited into the Airport and Airways Trust Fund to pay for FAA services and projects needed to maintain and improve our national aviation infrastructure. That is $200 million gone for good – much of it into the airlines’ pockets since the majority of them raised their fares when the ticket tax expired.

· Transportation Secretary Ray LaHood can lift the 219 stop work orders that have been issued on projects at airports across the country and allow construction workers to get back to their jobs finishing projects like the $31 million air traffic control tower at Oakland International Airport where it is costing $6,000 a day for idle construction equipment.

· FAA employees can get back to work processing Airport Improvement Program funding awards to allow airports to move forward with critical projects including:

• Fresno’s Yosemite International can begin nine needed projects that will create an estimated 220 jobs in an area where the unemployment rate sits at 16.8 percent.
• Denver International Airport can move forward on its $19 million Runway 8-26 rehabilitation project. The shutdown leaves that work in doubt as Denver looks at ways to replace the potential loss of AIP funding including their $2.3 million entitlement grant. Their snow season starts in less than two months (8/15) so they need answers now.
• St. Petersburg-Clearwater International Airport can get the grant that was scheduled to be processed last week allowing them and move forward with their $5.7 million runway overlay project, which is in jeopardy without the approval of a grant.
• Reno-Tahoe International Airport can move forward on$9.3 million worth of projects including sound insulation program for 3,500 homes north and south of the airport as well as a new taxiway extension. The projects, if funded would provide jobs to an estimated 350 workers in a state where unemployment is 12 percent.
• San Antonio International Airport can move onto Phase III of their $33 million Runway 03/21 extension. The bids for Phase III are out but will need to be rejected if the shutdown isn’t resolved soon and this willjeopardize the extension completion schedule by one year if the FAA’s situation is not favorably resolved in the short term.

I can’t overstate the importance of Congress passing an FAA extension as soon as possible because the damage being inflicted on our national aviation system will only grow worse every day this stalemate continues.

Step Two: The House and Senate must work through the remaining policy differences in the two versions of the FAA bill and sent to the president for his signature. This action is long overdue given we have not had an FAA Reauthorization bill signed into law since 2003.

The partial shutdown of the FAA came about because Congress failed to agree on extending the current law and hence the aviation excise taxes that fund most of FAA. These disagreements have been going on since autumn 2007, when the previous authorization expired. The bill Congress failed to pass would have been the 21st short-term extension.

The air traffic control system accounts for about 80% of the FAA’s budget and the lion’s share of its staff. While ATC operations are continuing (as an essential service), the entire ATC modernization program, known as NextGen, is now suspended (along with all airport grants).

The situation is absurd. Not a single one of the numerous issues holding up the FAA bill concerns air traffic control. The latest stumbling block was over how small the cutback would be in the EAS subsidy program. The biggest unresolved battle is the House’s effort to overturn a recent change in policy on airline unionization by the National Mediation Board. There have been battles over foreign aircraft repair stations, Fedex workers, slots at Reagan National Airport, and many other issues.

Isn’t there a better way to fund ATC modernization? Any business faced with a $20 billion modernization agenda would finance the investment, probably issuing long-term bonds to be paid off from future sales revenue. But as a government agency, the FAA is stuck with annual appropriations, of uncertain timing—and now, a hiatus in the whole program.

Among all serious developed countries, the United States is the only one left that funds air traffic control this way. Australia, New Zealand, Canada, Germany, the U.K., Switzerland, and dozens of other countries have all de-politicized their ATC systems, by “commercializing” their air traffic control providers—turning them into separate corporate entities that are self-funding, getting paid by their aviation customers. That revenue stream is predictable enough that the company can issue revenue bonds to fund capital investments in facilities and equipment. Many of these ATC companies (such as Nav Canada) even have investment-grade bond ratings.

De-politicizing the ATC system is such a good idea that it was recommended by Vice President Al Gore’s reinventing government shop, the National Performance Review, back in 1994. The Clinton Administration introduced a bill to create a self-supporting ATC corporation in 1995. Congress, however, refused to let go, and the bill died.

The current shut-down of FAA’s NextGen modernization program should be a wake-up call to airlines and the traveling public. We desperately need to modernize our 1960s-era ATC system. But if we cling to the government-as-usual status quo, this is increasingly unlikely to happen.

Fawn did not mention that some subsidies paid under the Essential Air Service program exceed $3,000 per-ticket, and that one of the issues in dispute is whether per- ticket subsidies should be capped at $1,000. Presumably some of these high costs are due to the union rules that are also part of the dispute.

In contrast, Papua New Guinea, an aviation pioneer but not the world's richest society, can (or used to) operate its numerous village airports with no subsidy whatsoever.

This “teachable moment” illustrates not only the wastes perpetuated on federal taxpayers by congress, but also the absurdity of the federal government having the power to shut down aviation services because of disputes over subsidies and over the union rules that probably contribute to them.

As the federal government has run out of other people’s money to spend, some might respond that the “fair compromise” is to phase out the whole federal program and let the local people raise the funds for the services they themselves deem “essential.”