House Dems: Trump’s air traffic control plan would give away government assets for free

Jun 8, 2017 Issues: Transportation

The Hill: House Dems: Trump’s air traffic control plan would give away government assets for free

  • Melanie Zanona

House lawmakers clashed Thursday over President Trump’s air traffic control proposal, which Democrats claim would hand over billions of dollars in government assets to a corporation for free.

The White House proposal calls for transferring air traffic control operations from the federal government to a nonprofit or nongovernmental organization at “no charge,” according to a set of legislative principles Trump signed on Monday.

It also would require the government to pay the private entity for any environmental liabilities associated with the transfer of assets.

The Federal Aviation Administration (FAA) has spent $7 billion on a modernization program called NextGen, but has been slow to implement it, which is part of the administration’s argument for moving operations to a private entity.

Democrats slammed the idea during a House Transportation and Infrastructure Committee hearing on Thursday, saying it would amount to a corporate giveaway because taxpayers have already poured billions of dollars into the country’s air navigation system.

They also pointed out that Canada and the United Kingdom were both compensated when they set up similar outside models.

“Why shouldn’t the government of the United States be similarly compensated for these taxpayer assets?” asked Del. Eleanor Holmes Norton (D-D.C.).

Transportation Secretary Elaine Chao agreed that the “capitalization of this new entity needs to be addressed.”

But she also argued that requiring the corporation to purchase the system would just lead to the organization passing those costs back to the users of the system through higher fares and fees.

The administration has maintained that Trump’s spinoff plan as currently proposed would lead to lower costs, pointing to  a 45 percent drop in Canadian user fees compared to the aviation taxes they replaced.

“The American flying public has already paid for the use of the system, so to make them pay twice doesn’t seem very fair,” Chao said.

One GOP lawmaker maintained that the current air traffic control technology is so outdated that it would be unreasonable to ask a corporation to pay full price for it.

Another Republican pointed out that the private entity would be a nonprofit organization, so there is no financial gain for the corporation if it is given the system for free.

Under Trump’s plan, the entity would be governed by a 13-member board appointed by users of the system.

“I want to get to this ‘federal asset giveaway.’ If you look at this quasi-governmental agency, this nonprofit board, there are stakeholders but are there no shareholders,” said Rep. Jason Lewis (R-Minn.) “So any federal assets are not going to flow back to a private entity for somebody’s profit making. So how would that be a federal asset giveaway?”

Rep. Michael Capuano (D-Mass.) pushed back on that notion, however, saying it doesn’t matter who is receiving the assets because the government is still losing them.

“It’s still taking away their property for free,” he said.

The spinoff plan has faced outright rejection from Democrats and some skepticism from rural Republicans, particularly in the Senate.

But the proposal has received far more enthusiasm in the House, where Transportation Chairman Bill Shuster (R-Pa.) and other Republicans have been advocating for the idea.

Shuster hopes to move a long-term reauthorization of the FAA that contains language to separate the country’s air navigation system from the government, with the FAA still in charge of safety oversight.

But the push for a similar spinoff proposal last year tanked efforts to advance a long-term FAA bill in Congress, forcing lawmakers to enact a short-term patch.

Rep. Rick Larsen (D-Wash.), ranking member on the aviation subcommittee, pressed Chao on whether the administration would support congressional efforts to move an FAA bill if it doesn’t contain Trump’s air traffic control plan.

“We would prefer that this initiative … be considered and successfully passed, but as we have always said, we want to work with the committees and Congress,” Chao said. “Lets work on the issue and see how far we can get.”