U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2250 Mail: Stop SSOP, Washington, DC 20402–0001

30–055 PDF 2006

S. HRG. 109–595

THE PRESIDENT’S FISCAL YEAR 2006 BUDGET

REQUEST FOR THE DEPARTMENT OF

HOMELAND SECURITY ADMINISTRATION AND

RELATED PROGRAMS

HEARING

BEFORE THE

COMMITTEE ON COMMERCE, 

SCIENCE, AND TRANSPORTATION 

UNITED STATES SENATE

ONE HUNDRED NINTH CONGRESS

FIRST SESSION

APRIL 26, 2005

Printed for the use of the Committee on Commerce, Science, and Transportation

(

(II)

SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

ONE HUNDRED NINTH CONGRESS

FIRST SESSION

TED STEVENS, Alaska, Chairman 

JOHN MCCAIN, Arizona 

CONRAD BURNS, Montana 

TRENT LOTT, Mississippi 

KAY BAILEY HUTCHISON, Texas 

OLYMPIA J. SNOWE, Maine 

GORDON H. SMITH, Oregon 

JOHN ENSIGN, Nevada 

GEORGE ALLEN, Virginia 

JOHN E. SUNUNU, New Hampshire 

JIM DEMINT, South Carolina 

DAVID VITTER, Louisiana 

DANIEL K. INOUYE, Hawaii, Co-Chairman 

JOHN D. ROCKEFELLER IV, West Virginia 

JOHN F. KERRY, Massachusetts 

BYRON L. DORGAN, North Dakota 

BARBARA BOXER, California 

BILL NELSON, Florida 

MARIA CANTWELL, Washington 

FRANK R. LAUTENBERG, New Jersey 

E. BENJAMIN NELSON, Nebraska 

MARK PRYOR, Arkansas 

LISA J. SUTHERLAND, Republican Staff Director 

CHRISTINE DRAGER KURTH, Republican Deputy Staff Director 

DAVID RUSSELL, Republican Chief Counsel 

MARGARET L. CUMMISKY, Democratic Staff Director and Chief Counsel 

SAMUEL E. WHITEHORN, Democratic Deputy Staff Director and General Counsel 

LILA HARPER HELMS, Democratic Policy Director 

(III)

C O N T E N T S 

Page 

Hearing held on April 26, 2005 .............................................................................. 1

Statement of Senator Ensign .................................................................................. 18

Statement of Senator Inouye .................................................................................. 1

Prepared statement .......................................................................................... 1

Statement of Senator Lautenberg .......................................................................... 20

Statement of Senator Pryor .................................................................................... 22

Statement of Senator Stevens ................................................................................ 1

WITNESSES

Barclay, Charles, A.A.E.; on behalf of the American Association of Airport 

Executives/Airports Council International-North America .............................. 4

Prepared statement .......................................................................................... 5

May, James C., President/CEO, Air Transport Association of America, Inc. ..... 11

Prepared statement .......................................................................................... 13

APPENDIX

Letter, dated April 25, 2005, to Hon. Ted Stevens and Hon. Daniel K. Inouye 

from: Marc Rotenberg, Executive Director; Marcia Hofmann, Director, Open 

Government Project; and Melissa Ngo, Staff Counsel, Electronic Privacy 

Information Center (EPIC) .................................................................................. 27

(1)

THE PRESIDENT’S FISCAL YEAR 2006 BUDGET 

REQUEST FOR THE DEPARTMENT OF 

HOMELAND SECURITY ADMINISTRATION 

AND RELATED PROGRAMS 

TUESDAY, APRIL 26, 2005

U.S. SENATE, 

SENATE COMMITTEE ON COMMERCE, SCIENCE AND

TRANSPORTATION, 

Washington, DC. 

The Committee met, pursuant to notice, at 2:30 p.m. in room 

SR–253, Russell Senate Office Building, Hon. Ted Stevens,

Chairman of the Committee, presiding. 

OPENING STATEMENT OF HON. TED STEVENS,

U.S. SENATOR FROM ALASKA 

The CHAIRMAN. There are a few extra-curricular activities going 

on around here today, but we’d like to start the hearing, if we may. 

We want to welcome back the witnesses who were scheduled to appear on February 15th. Today’s focus will be on the effect of the 

Fiscal Year 2006 Transportation and Security Agency budget request on the aviation industry and the American economy. 

Now, some time ago, 15 members of our Committee signed a letter to the Appropriations Committee requesting that the passenger 

fee increase not be included in the Homeland Security Appropriations bill. Chairman Gregg is aware of our concerns, and has raised 

similar issues in the Appropriations hearings. We look forward to 

learning more about the impact of this proposal from our witnesses. 

Let me yield to Senator Inouye at this time. 

STATEMENT OF HON. DANIEL K. INOUYE,

U.S. SENATOR FROM HAWAII 

Senator INOUYE. Thank you, Mr. Chairman. I have a prepared 

statement I’d like to have made part of the record. 

The CHAIRMAN. It will be. 

Senator INOUYE. May I just say that I concur with you, and I was 

1 of the 15 who signed the letter in opposition of the security fee. 

[The prepared statement of Senator Inouye follows:]

PREPARED STATEMENT OF HON. DANIEL K. INOUYE, U.S. SENATOR FROM HAWAII

Mr. Chairman, as we begin this new session, I rank our oversight of the Transportation Security Administration as one of our highest priorities. As the primary Committee of jurisdiction for transportation security, I’m looking forward to a spirited 

2

and consistent review of TSA’s work as we continue to make progress securing all 

modes of transportation. 

I have three principal areas of concern:

1) Congress agreed in 2001, by nearly unanimous votes in the House and Senate, that transportation security must be a national security function. However, 

between TSA’s endless reorganizations and the recent rhetoric about returning 

to private security screening companies, it is becoming apparent that this central, guiding principle is being eroded. If we lose sight of this principle, we will 

forget one of the most important lessons of September 11th.

2) Aviation security has received 90 percent of TSA’s funds and virtually all of 

its attention. There is simply not enough being done to address port, rail, motor 

carrier, hazardous material, and pipeline safety. That must change, quickly.

3) The Administration is proposing to increase aviation security fees. This 

makes no sense to me. The airline industry is bordering on total bankruptcy, 

and the Administration wants to add to its costs. Yet at the same time, the Administration is demanding that its unaffordable tax cuts be made permanent. 

I don’t follow their thinking, and quite frankly, I don’t believe the proposal will 

go far.

Mr. Chairman, over the years, and particularly since 9/11, this Committee has led 

the effort to make transportation security a matter of national security. We crafted 

two landmark bills, the Aviation and Transportation Security Act of 2001 and the 

Maritime Transportation Security Act of 2002, to ensure that funding and programs 

were developed to completely change the way we address security. The September 

11th tragedy, the Madrid train bombing and many other attacks remain locked in 

our conscience as we try to do all we can to avoid another attack. 

The continued threat risk is real and the vulnerabilities are real, across all modes 

of transportation. 

We recently witnessed a rail tank cargo accident—not a terrorist attack—in 

Graniteville, SC. An entire town had to be evacuated, demonstrating the potential 

harm if someone does target a rail tank car. The District of Columbia was so concerned about rail cars carrying hazardous materials traversing the city, they adopted a resolution to ban them. 

Port security is of particular interest to me. My state of Hawaii is entirely dependent upon shipping and the steady flow of maritime commerce. The dock strike 

at the port of LA/Long Beach in 2001 caused people in my state to begin running 

out of basic supplies. If an attack occurs, it could be weeks before service is renewed. 

It is important to remember that 95 percent of the Nation’s cargo comes through 

the ports, so a port incident will send devastating shockwaves through the entire 

economy, impacting every state. Yet the security initiatives at most ports have been, 

to this point, woefully underfunded, and most ports are ill-prepared for an attack. 

Unfortunately, our maritime system is only as strong as its weakest link. If there 

is an incident at any one port, the whole system will screech to a halt, as we scramble to ensure security at other ports. If we had to shut down our entire port system, 

the economic damage would be widespread, catastrophic and possibly irreversible. 

Considering these simple observations, I cannot comprehend the Administration’s 

lack of serious attention and commitment to port, rail, motor carrier, hazardous material and pipeline safety initiatives. 

Security funding for all modes of transportation beyond aviation has been desperately lacking. The 9/11 Commission found, ‘‘over 90 percent of the Nation’s $5.3 

billion annual investment in the TSA goes to aviation... [and]... current efforts do not yet reflect a forward-looking strategic plan.’’ And according to Senate 

Banking Committee estimates, the Federal Government has spent $9.16 per airline 

passenger each year on enhanced security measures, while spending less than a 

penny annually per person on security measures for other modes of transportation. 

But considering the real threat risk and the constant talk about our War on Terror, I find it even harder to understand how the Administration has forgotten that, 

in a post-September 11th world, transportation security is national security. 

Based on the President’s Budget, there are apparently some in the Administration 

who seem to believe that our work is done. Their budget proposal suggests a wholesale dismantling of the Transportation Security Administration. In the last 2 years, 

we have witnessed a near constant reorganization that, under the current proposal, 

now makes Maritime and Land security virtually nonexistent at TSA. The changes 

suggest either a fundamental lack of understanding of what it will take to ensure 

the security of all transportation modes, bureaucratic mismanagement, or worse yet, 

the Administration’s complete loss of a sense of national urgency. 

3

The President’s Budget recommends shifting critical work away from the Transportation Security Administration (TSA) to other organizations within DHS that 

have neither the expertise nor the necessary authority to be effective. In my view, 

further decentralizing the responsibilities of TSA will destroy the remaining, limited 

accountability that TSA provides for transportation security. 

The problems with the Budget proposal go further: it offers inadequate funding 

for the U.S. Coast Guard to meet both its increased homeland security responsibilities and its traditional missions like search and rescue and enforcement of coastal 

laws; it creates an odd rearrangement of the security grant programs that not only 

defies Congressional directives, but adds bureaucracy and decreases accountability; 

it cedes TSA’s regulatory authority of the Transportation Worker Identification Credential (TWIC) program; and the list goes on. 

On aviation security, the Administration’s proposal creates as many problems as 

it aims to solve. While TSA spending in FY06 would increase by $156 million, this 

funding level depends on $1.5 billion generated by increased security fees on airline 

passengers. Since this proposal was unveiled, there has been no shortage of airline 

and industry analysts that have raised deep concerns over what effect this may 

have on the future of existing air carriers. 

The Administration cannot satisfy its budget needs on the backs of one industry. 

I know that several other countries and airport authorities impose security fees, but 

with perhaps one or two small exceptions, no one imposes all of the national security costs on the airlines. We can debate how much we need for security, but it does 

not make any sense to place the burden for new DHS revenue on an airline industry 

that is bordering on total bankruptcy, when at the same time the Administration 

is demanding that its unaffordable tax cuts be made permanent. 

The U.S. economy depends on a strong commercial aviation industry. Since September 11th, the U.S. air carriers have taken unprecedented steps to cut their costs, 

and their employees have been true heros. In the face of steep layoffs and cuts in 

pay and benefits, the workers have been selflessly supportive of the industry and 

still manage to provide the highest level of service possible day in and day out. I 

think we must be very careful in dealing with issues that will have wide ramifications for the aviation industry and its workers. 

TSA should be aggressively seeking improvements to the current transportation 

security regimes for all modes and promoting the technological and capital improvements that will save considerable money in the long run while improving security. 

Instead, we have been given a budget that seeks short-term solutions that, I believe, 

will have negative consequences in the long term. 

Given the many misplaced priorities that I see in the President’s Budget proposal, 

it is clear that the Congress needs to help refocus the Department. 

I have been discussing the real needs of the U.S. transportation security system 

with my fellow Committee members, and we have been developing a transportation 

security reauthorization proposal to provide further direction to the Department’s 

cargo security functions, to strengthen aviation, maritime, rail, hazardous materials, 

and pipeline security efforts, and enhance interagency cooperation. The proposal will 

incorporate several Commerce Committee-reported and Senate-passed bills from the 

prior Congress and will also put forth new ideas to enhance transportation security 

across all modes of transportation. 

We expect a fully funded, effective operating Administration that can:

• Provide security to the traveling public and instill confidence in the first line 

of defense—be it an airport screener or a seaport agent;

• Establish secure, efficient cargo systems for air, land and sea;

• Deter people that seek to do harm.

It is easy to set the goals, but often difficult to achieve them. I speak for my colleagues when I say that this Committee is fully committed to achieving these goals. 

And we have a record that demonstrates our ability to deliver a bipartisan, broadly 

supported result. 

The difficult work of securing all of our major modes of transportation, including 

our ports, railroads, intercity buses, pipelines, and motor carriers, is just beginning 

and the country demand a robust agency within DHS dedicated to that task. 

I thank the witnesses for their participation and I look forward to their testimony.

The CHAIRMAN. May we have the witnesses, Mr. Barclay and Mr. 

May, come to the witness table. If it’s agreeable, we’ll put the statements in the record, if anyone has statements, and proceed to this 

hearing. 

4

As I said, these are the gentlemen who waited for us at the previous hearing, and we didn’t get to them, so we agreed to have a 

hearing so we can put into the record their comments. 

Chip, let’s call on you first. 

STATEMENT OF CHARLES BARCLAY, A.A.E.; ON BEHALF OF 

THE AMERICAN ASSOCIATION OF AIRPORT EXECUTIVES/

AIRPORTS COUNCIL INTERNATIONAL–NORTH AMERICA 

Mr. BARCLAY. Thank you, Mr. Chairman. 

It’s always a personal pleasure to appear before the Commerce 

Committee, airports are grateful for the Full Committee focus on 

transportation security, and thankful for the exceptional experience 

and knowledge that the Chairman and Ranking Member bring to 

the Committee leadership at this critical time for our industry. I’d 

also like to thank former Chairman McCain for his leadership 

through one of the most difficult periods in our industry’s history. 

I want to discuss just three quick points on the TSA budget from 

our testimony, but given their critical nature, I’d like to first preface those remarks by saying that we appreciate very much the 

leadership at DHS, and TSA, and the service of all the men and 

women of TSA. 

Our members have formed important partnerships with TSA, 

both locally and nationally. We’ve solved a number of difficult problems with TSA, and we have some important policy disagreements, 

a few of which I want to talk about today. 

First, nothing frustrates our members more than seeing a cost 

increase being sold as a budget cut. Every time we incur the capital cost of building in-line explosive detection systems at airports, 

the operating cost savings that TSA realizes in personnel, pays off 

that capital cost exceptionally quickly, just over a year, according 

to GAO’s analysis. And then that savings continues on into the future for TSA. 

The Administration’s proposed cut in LOIs for EDS installations 

is just not smart government. It may be clever Federal budgeting 

in the very, very, very short term, but in the real world of economic 

effects, it increases TSA’s costs, rather than lowering them. Smart 

government would be to increase LOIs and earn the permanent reduction in TSA’s costs that that brings, and our testimony has a 

number of examples of how that occurs. 

Second, airports also disagree with the Administration proposal 

to increase security fees. Fighting a war on terrorism isn’t the job 

of one industry that happens to be a popular target of terrorists 

due to its importance to our modern economy. Certainly users of 

any industry should pay for the costs they impose, but wars need 

to be fought by nations, not unlucky target industries. We think 

this user fee proposal gets that allocation philosophy wrong, and 

we would also question the wisdom of the timing of this proposal’s 

impact on a seriously financially ailing industry. 

Third, Mr. Chairman, as you pointed out in the new Secretary’s 

confirmation hearings earlier this year, DHS cannot keep looking 

forward to ever-increasing funding to carry out all the missions 

that are on their plate. Airports agree, and we have more to offer 

than just criticism of the Administration’s proposed budget cuts. As 

branches of local governments, with local law enforcement powers, 

5

and local police divisions, airports are willing and able to share security responsibilities. TSA and local law enforcement need to allocate more responsibilities through local mutual aid pacts, as occurs 

throughout the law enforcement field, rather than spending our 

time focused on each other as regulator and regulated party. We 

should both be pointed outward, looking for the bad actors, not inward watching each other. This simply takes the allocation of logical responsibilities among law enforcement agencies, rather than 

a regulatory approach. Some responsibilities have been allocated. 

They’ve saved TSA money. Our members tell us that more can be 

saved by operating precisely as multiple law enforcement agencies 

do, outside the boundaries of an airport. 

In closing, I’d like to mention the airports’ strong objection to another Administration-proposed budget cut that’s part of this Committee’s jurisdiction, even though it’s not subject to today’s hearing—the exceptionally large proposed cut for the Airport Improvement Program would hit small airports and small airport states 

which can least afford it—the hardest. Larger airports would be 

forced to choose between offering inadequate future capacity, or 

passing new costs on to financially ailing tenants when they can 

least afford it. 

We understand the need to cut the Federal deficit, and the moral 

imperative not to pass along debts to future generations, simply because we wanted to consume more than we could produce. But 

there is an equal imperative to pass along and invest in infrastructure that will allow those future economies to grow and prosper. 

Public infrastructure facilities that create wealth over their full, 

useful life are—we respectfully submit—the wrong places to cut. 

We owe it to future generations not to leave them broke, and we 

owe it to them not to leave them with broken infrastructure. 

Mr. Chairman, I’ll be happy to answer any questions that I can. 

[The prepared statement of Mr. Barclay follows:]

PREPARED STATEMENT OF CHARLES BARCLAY, A.A.E.; ON BEHALF OF THE AMERICAN

ASSOCIATION OF AIRPORT EXECUTIVES/AIRPORTS COUNCIL INTERNATIONAL-NORTH

AMERICA

Thank you for the opportunity to share with the Committee the views of the airport community on the President’s Fiscal Year 2006 budget request for the Transportation Security Administration. I am testifying today on behalf of the American 

Association of Airport Executives (AAAE), Airports Council International—North 

America (ACI–NA), and our Airport Legislative Alliance, a joint legislative advocacy 

organization. AAAE represents the men and women who manage primary, commercial service, reliever, and general aviation airports. ACI–NA represents local, regional and state governing bodies that own and operate commercial airports in the 

United States, and Canada. 

Before moving to some of our specific thoughts and concerns on the TSA budget, 

I would be remiss if I didn’t take the opportunity to tell you how delighted we are 

to be working with you, Chairman Stevens, as well as with Senator Inouye and the 

other distinguished Members of this Committee during this Congress to address the 

wide range of challenges facing the aviation industry. The depth of experience, particularly on the part of the Chairman and Ranking Member of this Committee, is 

unparalleled, and we look forward to having those talents at work on the important 

issues before us all. 

I also want to commend you, Mr. Chairman, for focusing attention on the TSA 

budget so early in the process. In a world of limited resources, it is absolutely critical that the TSA establish priorities within its budget that enable the agency to 

meet its core mission, offer the greatest benefits in terms of enhanced security, and 

effectively utilize taxpayer dollars. At a recent hearing before the Senate Homeland 

Security and Governmental Affairs Committee, Chairman Stevens, you said that the 

6

Department of Homeland Security needed to focus on doing more with the resources 

it has been given rather than relying on ever increasing budget allocations. Recognizing that there are limits to the amount of funding DHS and TSA will receive, 

it is imperative that TSA’s provision of aviation services be made more efficient. Unfortunately, the President’s Fiscal Year 2006 budget does not meet this test. It remains silent on the critical issue of more efficiently managing checked baggage 

screening, it reduces the general fund support available for aviation security, and 

proposes to pass along a $1.5 billion bill to the travelers who use our Nation’s airports. 

The airport community, backed by a recommendation of the 9/11 Commission, 

continues to believe that TSA can realize important savings if they would quickly 

move forward with the permanent installation of in-line explosive detection equipment in airports. Other personnel savings can be achieved through the rapid development, certification, and deployment of new technology. More can be done to focus 

on dangerous people rather than dangerous things so that the most effective screening takes place before a suspect individual ever has access to critical transportation 

assets. More can be done also by reducing the TSA’s plethora of non-screening, overhead, liaison, and regulatory personnel who occupy offices at just about every commercial airport in the U.S. and some international locations as well. TSA and the 

department can also avoid unnecessary duplication and costly delays on key programs like Registered Traveler by working more closely with its industry partners. 

Additionally, TSA can be more proactive in partnering with airports and deferring 

to them to address security concerns such as perimeter security and access control, 

for which local airport operators have superior expertise and experience as well as 

ongoing responsibilities. Keeping these traditionally local duties in local hands allows TSA to leverage airport and local resources and enables the agency to better 

focus on its core missions of baggage and passenger screening and providing intelligence to local law enforcement. 

EDS Installation: In-Line Systems Enhance Security and Reduce Personnel 

Requirements 

The greatest area of opportunity in terms of enhanced security and potential longterm TSA budget savings comes from the permanent installation of explosive detection equipment in the Nation’s airports. In order to meet Congressional deadlines 

to screen all checked baggage placed aboard commercial aircraft, TSA quickly placed 

thousands of explosive detection system (EDS) and explosive trace detection (ETD) 

machines in airports across the country. Many of those machines have been placed 

in airport ticketing lobbies without the kinds of integrated approaches that take 

maximum advantage of their certified throughputs and alarm reconciliation capabilities. The result, too often, is crowded airport lobbies (a safety and security hazard), major backups at a number of security screening checkpoints, and a huge increase in the number of TSA personnel necessary to operate the equipment. 

While virtually everyone agrees that the best solution at many airports is to move 

EDS equipment from crowded lobbies and place it ‘‘in-line’’ as part of an airport’s 

integrated baggage system, making the necessary changes at airports—reinforcing 

flooring, electrical upgrades, building new facilities, etc.—are neither easy nor inexpensive. Current cost estimates run in the $4 billion to $5 billion range for airports 

nationwide. These upfront capital costs are modest, however, when compared to the 

extraordinary expenses necessary to pay for literally thousands of extra screeners 

year after year using today’s model. In-line screening, in airports such as Tampa 

International Airport, has also been shown to reduce the rate of TSA screener onthe-job injuries. The handful of airports that currently have ‘‘in-line’’ baggage systems report that they have paid for themselves with personnel cost reductions in 

as little as 16 months. 

The case of the Lexington Blue Grass Airport in Lexington, Kentucky, offers a 

perfect example. In Lexington, a $3.5 million investment to make the terminal 

modifications necessary to establish an in-line baggage system instead of the terminal lobby explosive trace detection (ETD) protocol that was offered as an alternative has resulted in annual personnel savings of more than $3 million. The TSA 

has been able to use four screeners for the in-line system per shift rather than the 

30 that would have been necessary for primary checked bag screening using the 

ETD configuration. In addition, the in-line EDS option in Lexington allows for reduced congestion in terminal areas, a result that improves security and enhances 

passenger convenience. Large airports stand ready to achieve even bigger gains. 

Modeling in San Francisco, for example, shows savings of tens of millions of dollars 

annually for an in-line EDS solution. 

The Government Accountability Office in its February 15 appearance before the 

Committee noted that at the nine airports where the TSA has issued Letters of InVerDate 0ct 09 2002 13:39 Oct 02, 2006 Jkt 030055 PO 00000 Frm 00010 Fmt 6633 Sfmt 6621 S:\WPSHR\GPO\DOCS\30055.TXT JACKF PsN: JACKF
7

tent (LOIs) to begin moving EDS equipment in-line, the agency estimates that the 

move will save the Federal Government $1.3 billion over seven years and that TSA 

will recover its initial investment in in-line systems at those airports in just over 

a year. GAO further noted that in-line EDS systems at those nine airports will reduce by 78 percent the number of TSA baggage screeners and supervisors required 

to screen checked baggage from 6,645 to 1,477. Through Fiscal Year 2005, Congress has appropriated $1.783 billion for EDS-related terminal modifications, although significant portions of those funds were used 

by TSA on the short-term challenges associated with getting EDS machines in airports to meet the original statutory deadlines. Conservative estimates show that the 

Federal Government needs to commit a total of $4 billion to $5 billion to get the 

job done at airports that require these solutions. The Federal Government has met 

less than half of that need since September 11. 

Unfortunately, the prospects for quickly addressing the existing funding gap re- main bleak. The TSA budget request for FY 2006 calls for only $250 million for EDS 

installation projects, the amount mandated in law by VISION–100 FAA reauthorization legislation. While $250 million is certainly a significant amount of money, the 

fact is that it will allow TSA to move forward at only a handful of airports. TSA has estimated that roughly $240.5 million of the $250 million requested will 

be used to meet existing commitments at the nine airports covered by the existing 

eight LOIs with the agency (the LOI for Los Angeles World Airports covers both Los 

Angeles International Airport and Ontario International Airport). The $240.5 figure 

assume that the agency is allowed once again to ignore provisions in law that require the Federal Government to pay for 90 percent of the costs of those projects, 

otherwise it will be much higher. 

As you recall, the LOI process allows interested airports to provide immediate 

funding for key projects with a promise that the Federal Government will reimburse 

the airport for those expenses over several years. At Dallas-Fort Worth International Airport, for example, the airport used its strong rating in the financial 

market to leverage the LOI and to issue bonds to install these systems. This approach takes advantage of professional airport management capabilities and maximizes the use of limited Federal resources to ensure that key construction projects 

get underway as soon as possible. 

Under the LOI process, the Federal Government has committed to reimbursing 

airports for these projects over a three- to five-year period. The following lists the 

LOI airports and the total project cost at those airports:

LOI Airports 

Airport Total Cost 

Atlanta $125 million 

Boston Logan $116 million 

Dallas/Fort Worth $139 million 

Denver International $95 million 

Las Vegas McCarran $125 million 

Los Angeles/Ontario $342 million 

Phoenix $122 million 

Seattle/Tacoma $212 million

Total LOI Airports: $1.276 billion 

Although airports contend that the cost of these projects should be met entirely

by the Federal Government, given its direct responsibility for baggage screening established in law, in light of the national security imperative for doing so, and because of the economic efficiencies of this strategy, airports have agreed to provide 

a local match of 10 percent in the case of large and medium hubs and 5 percent 

for smaller airports. We continue to strongly oppose proposals by the Administration 

to dramatically increase the local share beyond the levels established in VISION–

100. 

While the projects at those eight airports are necessary, critical, and a top priority, the simple fact of the matter is that incremental installments of $250 million 

a year will not get projects started at additional airports in the foreseeable future. 

Clearly, more resources are needed to address the dozens of other airports that do 

not currently have LOIs with the TSA. To give the Committee an idea of the scope 

of current needs that exist beyond the LOI airports, we have included the latest 

data we have from a number of airports that have identified EDS installation as 

a major challenge facing their facility.

8

Airports Currently Without Funding in Place for EDS Installation 

Airport Project Cost

Estimate 

Albuquerque $48 million 

Anchorage $27 million 

Biloxi $5 million 

Bismarck $20 million 

Bradley $35 million 

BWI $65 million 

Charlotte $40 million 

Chicago Midway/O’Hare $90 million 

Cincinnati $20 million 

Cleveland $45 million 

Colorado Springs $15 million 

Detroit $100 million 

Elgin AFB $2 million 

El Paso $15 million 

Ft. Lauderdale $85 million 

Grand Rapids $20 million 

Guam $14 million 

Honolulu/Kahului $78 million 

Houston $115 million 

Jackson $9 million 

John Wayne $12 million 

Kansas City $34 million 

Memphis $42 million 

Miami $200 million 

Milwaukee $35 million 

Minneapolis/St. Paul $30 million 

Nashville $40 million 

Newark $99 million 

New Orleans $14 million 

New York LaGuardia $98 million 

New York JFK $250 million 

Oakland $30 million 

Omaha $18 million 

Orlando $140 million 

Palm Beach $30 million 

Panama City $10 million 

Philadelphia $65 million 

Portland $45 million 

Port Columbus $22 million 

Providence $38 million 

Raleigh-Durham $40 million 

Richmond $30 million 

Rochester $10 million 

St. Louis $90 million 

St. Thomas $10 million 

Salt Lake City $20 million 

San Antonio $40 million 

San Diego $20 million 

San Francisco $22 million 

San Jose $172 million 

San Juan $130 million 

SW Florida $28 million 

Tampa $124 million 

Tucson $10 million 

Washington Dulles $121 million 

Washington Reagan National $52 million

Total: $3.019 billion 

We believe that there are dozens of additional airports not listed here that have 

yet to develop comprehensive cost estimates or that have not responded to our requests for information. 

Despite these overwhelming needs, the Federal Government does not yet have a 

long-term EDS solution at a significant number of airports across the country. The 

9

TSA’s task has not been made any easier by opposition from the Office of Management and Budget (OMB) to the issuance of additional LOIs to airports for these 

projects. It is our sincere hope that OMB will quickly move past what we believe 

is a short-sighted view of this problem and focus on the long-term benefits that can 

be achieved by immediately investing to make the terminal modifications necessary 

to accommodate EDS equipment. 

In-line systems require up-front capital expenditures, but they pay for themselves 

in short-order through major reductions in personnel costs. This is an example of 

budget rules that are ‘‘penny-wise and pound foolish.’’ One need only look to the realworld example of the dozen or so airports where EDS systems have been properly 

installed to get real examples of the dramatic personnel savings that can be 

achieved by moving forward with these projects. We appreciate the interest that you 

and Senator Inouye have shown in this problem, Mr. Chairman, and we look forward to continuing our work together to find creative approaches to addressing the 

existing EDS installation funding shortfall. Airports stand ready to support the LOI 

process and airport managers have repeatedly expressed to TSA their ability to accommodate a wide variety of financing options to help the Federal Government fulfill its responsibility. 

Beyond additional resources, we urge TSA to continue its work with airport operators and managers to ensure that proposed solutions and changes are really the best 

course at an individual facility. Airport professionals understand the configuration 

and layout of their facilities better than anyone and are uniquely suited to highlight 

where pitfalls lie and where opportunities exist. In addition, TSA must continue to 

work with airport operators to optimize the use of limited space in airport facilities 

and to pay airports for the agency’s use of space in accordance with the law. 

Airports are pleased to see funding in the TSA budget request for ongoing maintenance of EDS machines. As the machines age and as their use continues to grow 

and their warranties expire, it is critical that funding is provided to keep the existing machines in operation and to restore machines that fail. 

Encouraging Development and Deployment of New Technology 

In addition to investing in necessary infrastructure improvements and maintenance, the Federal Government needs to look toward the promise of new technology 

and invest in making those promises a reality. We remain convinced that there are 

a number of additional applications for new technology to improve baggage screening, for example. The key is for the Federal Government to encourage innovation 

in these areas and to make it a priority to investigate and approve new technology 

as quickly as possible. ‘‘On-screen’’ resolution using EDS equipment, for example, 

offers great promise in enhancing the efficiency of integrated in-line baggage systems, and the utilization of technology to achieve that goal should be encouraged. 

We must also look beyond our borders to learn from the experiences of the rest 

of the world. In many instances, the goals that we have been discussing over the 

course of the past several years both in terms of operations and technology are already a reality in many places. We would be wise to study those successes and incorporate best practices where appropriate. 

It is our hope that the proposed move of TSA research and development programs 

to the Science and Technology Directorate will achieve synergies and avoid duplication as the Department contends. As this process moves forward, however, we must 

ensure that research and development efforts are driven by real needs in the field 

and that efforts to centralize the process do not lead to a disconnect between research and system needs or a dilution of effort. 

Screening Coordination and Operations Office 

The budget also includes a sweeping proposal to consolidate several critical programs under the Screening Coordination and Operations Office, which is an important and ambitious step toward a more focused approach on terrorist-related screening programs. As pointed out by the 9/11 Commission Report and in the recommendations of Transportation Secretary Mineta’s Aviation Industry Rapid Response Team, which was formed in the days immediately after the 2001 terrorist 

attacks, focusing on the people who know and can do harm by using our systems 

against us is the key to both protecting critical transportation assets and maintaining the efficiency that is critical to the aviation industry and the economy. 

Verifying and credentialing people who work in and pass through our transportation system and borders is the critical piece in allowing us to beat terrorists at 

their own game, and so we fully support the goals of the SCO. The key in moving 

forward will be to develop a common vision and to ensure that information is shared 

between these conceptually similar yet fundamentally different operations. At the 

same time, the SCO must design a process that gives members of the traveling pubVerDate 0ct 09 2002 13:39 Oct 02, 2006 Jkt 030055 PO 00000 Frm 00013 Fmt 6633 Sfmt 6621 S:\WPSHR\GPO\DOCS\30055.TXT JACKF PsN: JACKF
10

lic and the industry confidence that privacy rights are protected. This includes a 

process for allowing workers and travelers falsely identified by one of the systems 

to clear their names. In addition, these programs must always be managed by 

industry- and application-specific needs, an outcome made easier by consultation 

with industry and technology experts. 

The programs that are proposed to move from TSA to the newly created SCO have 

long histories with the aviation industry in development, deployment and daily operations. While gaining consistency through a coordinated SCO is important, we 

cannot allow centralization or reorganization-related distractions take programs and 

applications back to the starting line. Our experiences in the past three years have 

taught us that organizational realignments can stymie progress, so the challenge 

moving forward will be to ensure that we build upon the work that has been conducted to this point rather than recreate new systems and processes from scratch. 

The result will be better programs, brought on-line more quickly, at a lower cost. 

Additionally, the Department must take advantage of government/industry partnerships as a way of moving programs forward. The Registered Traveler program 

for frequent flyers is a particular area of opportunity, and it is our hope that DHS 

will build on existing TSA pilot programs, make them interoperable, and expand 

them to a broader, standards-based cooperative program working with industry. We 

owe it to the traveling public to quickly deploy programs that improve security and 

reduce unnecessary delays. Cooperative approaches can likewise jump-start other 

long-stove-piped programs. We need more success stories of working together if we 

are to achieve greater security and improve efficiency and convenience for our citizens when they work and travel. 

Focusing on TSA’s Core Mission 

Given the enormous task that TSA has been given to ensure the security of the 

Nation’s transportation system, the agency must rely on its airport partners to continue performing important functions that we have successfully performed for decades such as perimeter security and access control. Airports are organizations 

owned and operated by state and local governments and, therefore, have the necessary and appropriate incentives to perform security responsibilities at the highest 

levels. The primary mission of an airport is to establish and maintain a safe and 

secure environment for travelers and the general public and to serve the community 

and the national aviation system by encouraging competitive air service. Airports 

have always been responsible for the safety and security of their facilities and the 

people who use them, and this will continue to be so. 

Despite those facts, we continue to see efforts to expand TSA’s mission into areas 

traditionally performed by airport operators and to expand the regulatory enforcement personnel at airports. This creates a natural conflict of interest by giving a 

single entity operational and oversight responsibilities. Clearly, there are a number 

of ways to better utilize limited TSA resources. Our members have been pursuing 

every opportunity to refine and improve our working relationship with TSA to avoid 

duplication and to develop more productive working relationships, and we will continue to do so. We firmly believe that these efforts will ensure that limited TSA resources are reserved for other priorities. 

Additional Fees Should Be Rejected 

While more can be done to enhance the partnership between TSA and the aviation industry, that does not mean that the aviation industry and the traveling public should shoulder the entire burden of paying for aviation security as has been proposed in the President’s budget request with the addition of $1.5 billion in new passenger security fees toward what the budget calls a full ‘‘cost-recovery’’ model for 

aviation. If enacted, this would set the stage for security fee increases as far as the 

eye can see. This is totally unacceptable. In addition to adding to the financial woes 

of an already beleaguered industry, the imposition of new fees ignores the national 

security implications of aviation security—a fact that was evident on 9/11—and 

breaks faith with the commitments the Federal Government made as part of the 

Aviation and Transportation Security Act to assume responsibility for passenger 

and baggage screening. Congress should reject the President’s proposal and push 

TSA toward adopting more efficient means of using technology and personnel. 

Proposed Cuts to AIP Will Impact Ability of Airports to Address Security, 

Safety, Capacity 

Before closing, I want to highlight a related area of the budget where we cannot 

do more with less and that is the Airport Improvement Program, which the President has targeted for a $600 million cut from the authorized level and a nearly $500 

million reduction from last year’s enacted level. While I recognize that the FAA 

budget is not the topic of today’s hearing, proposed cuts in AIP will have a profound 

11

impact on the ability of airports to address ongoing safety and capacity needs. In 

addition, at a time when congestion is returning to our airports and our skies, a 

reduction of airports’ authorized share of the Airport and Airway Trust Fund is illadvised. 

Under AIR–21 formula levels, for example, the minimum entitlement at smaller 

commercial service airports would be reduced to $650,000 from $1 million and all 

primary entitlements would be halved if AIP is funded below $3.2 billion. Additionally, the cargo entitlement would be reduced, the set-aside for general aviation and 

non-primary commercial service airports would be scaled back and the general aviation entitlement of up to $150,000 per facility would be eliminated. It also is certainly worth noting that the Alaska supplemental entitlement would be halved as 

well. 

While these cuts would affect all airports, they would obviously have the greatest 

impact on smaller facilities that rely more heavily on AIP entitlements to support 

capital programs. As members of this Committee are well aware, smaller airports 

are already struggling to deal with a number of burdensome Federal security mandates. Dramatic cuts to AIP as proposed in the President’s budget will exacerbate 

those problems and call into question these facilities’ long-term viability. Even if entitlement cuts are restored, which is no guarantee, the overall reduction in AIP 

funding will have a ripple effect throughout the aviation system. 

Taken together, the President’s budget is a $2.1 billion ‘‘one-two punch’’ on the 

aviation industry. Travelers and air carriers should not be asked to shoulder the 

burden of the $1.5 billion increase in security fees, and airports throughout the 

country cannot sustain a $600 million reduction in AIP from authorized levels. 

Conclusion 

Mr. Chairman, thank you for the opportunity to appear before you today. We have 

highlighted a number of areas in which we believe limited TSA resources can be 

leveraged to produce enhanced security and better results for America’s taxpayer 

and the traveling public. We look forward to working with you and the TSA to ensure that our nation’s aviation system is the most secure and efficient in the world.

STATEMENT OF JAMES C. MAY, PRESIDENT/CEO, AIR 

TRANSPORT ASSOCIATION OF AMERICA, INC. 

Mr. MAY. Thank you, Mr. Chairman, I appreciate being here, and 

I appreciate the Committee’s indulgence in letting us come back to 

finish this abbreviated hearing, from our perspective. 

I’d like to thank you and the other members of this Committee 

who really have, a clear majority, really, who have expressed their 

clear opposition to the Administration’s proposed tax increase. CBO 

has scored it at $2 billion, if it were enacted and passed through, 

it would add to the $3.2 billion the carriers are already paying, and 

it would mean that at that junction, through our Aviation Security 

Fees, we would be paying some 85 percent of the overall operating 

budget of the TSA, and I think that’s wrong. You should know that 

it’s a tax that would not just hit legacy carriers, but regional and 

small carriers equally hard, and we deeply appreciate your opposition. 

Perhaps what’s most disappointing is that this tax is contrary to 

a well-established public policy that aviation security is a critical 

component of maintaining national security of our country. Your 

Co-Chairman, Senator Inouye, authored an article that appeared in 

The Hill newspaper not long ago, and I’d like to quote from it, ‘‘We 

all recognize that after September 11 transportation security is a 

matter of national security. It had to become national security. The 

vote in Congress to make this fundamental change was 100–0 in 

the Senate, 410–9 in the House.’’ Co-Chairman Inouye went on in 

the article to say, ‘‘After reviewing the Administration’s budget request for the DHS and TSA, it becomes clear that the airline fee 

12

proposal is but one example of the Administration’s failure to 

equate transportation security with national security.’’

Mr. Chairman, in fact, all Americans benefit from a secure aviation system, whether or not they happen to be on an airplane at 

a given time or shipping goods. In addition, the U.S. economy benefits broadly from a safe and vigorous air transportation system, 

and for these reasons, the ATA and its members vigorously oppose 

this tax. 

It’s probably equally disturbing that TSA, in proposing this tax, 

has also failed to demonstrate a need for it in the face of well-documented and continuing weak financial management. Neither the 

security nor the business case for this tax increase was ever made 

to this Committee or anywhere else. 

Consequently, the net effect is that airlines would be confronted with the worst of two worlds, an additional $2 billion tax on top 

of the $3.2 billion I mentioned a moment ago, with no apparent increase or enhancement to aviation security. It’s equally troublesome that TSA wants to raise taxes without improved managerial 

oversight of its activities. As the GAO pointed out in a very recent 

report, managerial improvement is indispensable if important programs that will benefit the public are to move from the drawing 

board to reality. We’ve all read the stories, I don’t need to repeat 

them here today. 

At the same time, continuing problems with the no-fly list and 

selectee list make headlines on a regular basis, and the effort to 

put into place a system to augment CAPPS I is beginning to look 

a little bit like the search for the Holy Grail. First it was CAPPS 

II, then it was reborn as Secure Flight. And after some two years 

of effort, numerous missteps and an unknown amount of employee 

time and money, TSA has still not moved past the testing phase. 

So, you’ve got CAPPS I, CAPPS II, Secure Flight. Now, in addition, 

we’re in the testing phase of a Registered Traveler program. There 

are five different programs set up at five different airport locations 

with five different airlines, none of which talk to one another, or 

conveniently communicate in a central system. And let’s not overlook the lack of coordination with an effort to test on an international arrival passenger system, initiated not by TSA, but by 

Customs and Border Protection. And then there’s the APIS, the Advanced Passenger Information System for passengers on inbound 

international flights. 

In short, DHS is undertaking a wide variety of very important 

efforts that are simply not coordinated. And what’s the solution? 

Two suggestions. First, to spend more wisely DHS needs the right 

plan and a strong management focus on coordination. Tell us what 

information you need, keep it within a central collection point, 

make it consistent, whether it’s the State Department, or the Department of Homeland Security, or TSA, or Customs and Border 

Protection, so that we have a system that allows us to attack people, not things, which I think most of our security experts think is 

an important goal. 

I think it’s also time for TSA, DHS and the Committee to take 

a step back to develop an analytical, risk-based approach to guide 

how it spends its limited resources. This view was echoed by a task 

force on homeland defense chaired by The Heritage Foundation, 

13

and CSIS. A key recommendation from that report is to rationalize 

government spending by establishing a risk-based mechanism for 

DHS-wide resource allocation and grant making. The 9/11 Commission made a nearly identical recommendation on making hard 

choices, we agree. 

In conclusion, three suggestions, three principles that the Committee and DHS and TSA need to keep in mind. One, establish 

once and forever that aviation security is a function of national security, and should be paid for accordingly. Two, make the hard 

choices using risk-based mechanisms in order to allocate resources 

more wisely, and three, manage the homeland defense structure 

more effectively to realize the efficiencies anticipated by Congress 

when they created TSA. 

Thank you, again, Mr. Chairman, for your strong support of our 

issue, and the leadership that you provide, along with Senator 

Inouye for this Committee. 

[The prepared statement of Mr. May follows:]

PREPARED STATEMENT OF JAMES C. MAY, PRESIDENT/CEO, AIR TRANSPORT

ASSOCIATION OF AMERICA, INC. 

Mr. Chairman, at the outset I want to thank you and the Members of this Committee—a clear majority—who have expressed opposition to the Administration’s increase of the September 11th Passenger Security Fee. This proposal has been scored 

by the CBO at $2 billion. Let me be clear, all carriers—low-cost, network and regional—will be harmed if this tax increase is approved. We appreciate your opposition. 

Perhaps what is most disappointing is that this tax is contrary to well established 

public policy that aviation security is a critical component of maintaining the national security of our country. A recent article penned by Co-Chairman Inouye published in The Hill brings home this point more than once. In his article, Senator 

Inouye observed:

‘‘We all recognized after Sept. 11 that transportation security is a matter of national security . . . It had to become a national-security function. The vote in 

Congress to make this fundamental change was 100–0 in the Senate and 410–

9 in the House.’’ Co-Chairman Inouye goes on to note that ‘‘After reviewing the 

administration’s budget request for the DHS and TSA, it becomes clear that the 

airline-fee proposal is but one example of the administration’s failure to equate 

transportation security with national security.’’

In fact, all Americans benefit from a secure aviation system, whether or not they 

fly or ship goods. In addition, the U.S. economy benefits broadly from a safe and 

vigorous air transportation system. For these reasons, the cost of aviation security 

should be borne just as broadly. 

No Justification 

Equally disturbing is TSA’s failure to demonstrate the need for this tax increase 

in the face of well-documented and continuing weak financial management. Neither 

the security nor the business case for the tax increase has been made. 

Consequently, airlines will be confronted with the worst of two worlds—a national security tax increase added to an already crushing $3.2 billion tax which holds no 

promise to enhance aviation security. 

Also troublesome is that TSA wants to raise taxes without improved managerial 

oversight of its activities. As the GAO has pointed out in recent reports, managerial 

improvement is indispensable if important programs that will benefit the public are 

to move from the drawing board to reality. We have all read the stories—I need not 

repeat them here. 

At the same time, continuing problems with the no-fly and selectee lists make the 

headlines on a regular basis, and the effort to put into place a system to augment 

CAPPS I is beginning to look like the search for the Holy Grail. First it was CAPPS 

II, and then it was reborn as Secure Flight. But after some two years of effort, numerous missteps and an unknown amount of employee time and money, TSA has 

not moved past the testing phase. In addition, the testing phase of the Registered 

Traveler program has made little sense, with five different systems unable to interVerDate 0ct 09 2002 13:39 Oct 02, 2006 Jkt 030055 PO 00000 Frm 00017 Fmt 6633 Sfmt 6621 S:\WPSHR\GPO\DOCS\30055.TXT JACKF PsN: JACKF
14

face or lay the groundwork for a national system. Also not to be overlooked is the 

lack of coordination with the effort to test an international arrival passenger information system initiated by Customs and Border Protection, and the Advance Passenger Information System for passengers on inbound international flights. In short, 

DHS is undertaking a wide variety of important efforts that are simply not coordinated. What is the solution? Let me make two suggestions. 

First, to spend more wisely DHS needs the right plan and a strong management 

focus on coordination, and must establish an overall plan that identifies how the operations of each entity fit together without duplication and work on the basis of 

agreed upon data that can be collected by a single entity. 

Second, and most importantly the time has also come for TSA, supported by this 

Committee, to take a step back and develop an analytical, risk-based approach to 

guide how it spends its limited resources. This view was echoed by a task force on 

homeland defense chaired by The Heritage Foundation and The Center for Strategic 

and International Studies. The key recommendation from that report is to rationalize government spending by establishing a risk-based mechanism for DHS-wide 

resource allocation and grant making. The 9/11 Commission made a nearly identical 

recommendation on making hard choices in allocating precious resources. We agree. 

Conclusion 

In the post-9/11 world, the number of projects which no doubt would improve security by some degree is virtually unlimited. The challenge is to determine where 

to draw the line. In our view, three principles must guide the Congress and TSA: 

(1) establish once and forever that aviation security is a function of national security 

and should be paid for accordingly, and (2) make the hard choices using a risk-based 

mechanism in order to allocate resources more wisely, and (3) manage the homeland 

defense structure more effectively to realize the efficiencies anticipated by Congress 

when it created DHS.

The CHAIRMAN. Thanks very much to the two of you for returning. I know that it was a difficult time in the first hearing, and you 

sat with us patiently, so we appreciate you taking the time to come 

back and complete the hearing. 

Mr. Barclay, have your people worked on the Registered Traveler 

and Transportation Worker Identification Credential programs? 

Are you working with TSA on that? 

Mr. BARCLAY. We are, Mr. Chairman, and together with Jim and 

his folks and most of the people in the industry couldn’t agree more 

with the necessity to get a program like that going, in order to 

know more about people willing to volunteer information on themselves. It helps us do a much better job of spreading resources. 

If I could just pass on, too, we have a number of important partnerships with TSA, one of which is on the background checks of 

airport workers, both airport and airline workers. One of the things 

that’s happened since 9/11 is that good news has not been news, 

and we’ve worked together with TSA to do background checks on 

1.6 million workers. Pre-9/11 that process used to take 52 days to 

do the check on a worker, now it takes 4 hours to do it. And that’s 

a success story, that’s saved hundreds of millions of dollars to the 

industry. It’s a success story that we’ve worked together with TSA 

on, and we think there are more partnerships like that with Jim’s 

organization and with ours, and with TSA on programs like Registered Traveler that can greatly benefit the system. 

The CHAIRMAN. You’re familiar with the GAO report concerning 

the adequacy of the security of airport perimeters and the various 

access controls, you’re familiar with that, aren’t you? 

Mr. BARCLAY. Yes, sir. 

The CHAIRMAN. Have airports and TSA done enough to meet the 

comments of GAO, to respond to that report? 

15

Mr. BARCLAY. Airports, again, have local law enforcement there 

at each airport, and if we can get some consistent rules on how we 

want those local police departments to operate, you’ll find very, 

very good compliance out there among local governments. So, we 

are working with TSA to respond to the specifics on that. On access 

control, we’re way ahead of all other industries, because virtually 

every major airport already has a highly developed access control 

system to and from the secure areas of airports. We need to add 

biometrics to that, but we have to get standards out of the government before we can add those biometrics so we don’t have to do it 

twice, and there is more we can do, but airports are determined to 

do that in the future. 

The CHAIRMAN. Are you satisfied there is a sufficient worker 

identification credential program? Is the one in place right now? 

Mr. BARCLAY. Well, there is at each airport, and we’re doing the 

criminal history record checks, as I say, with the Federal Government. I do think there’s more that needs to be done there, we—for 

example, when you run checks, even after you run people through 

the FBI process with a criminal history record check, you’ll still 

find about 5 percent of people whose names won’t match their Social Security number and their address. Now, folks that are not 

telling you the truth about who they are, that’s a risk group I want 

to take a very, very close look at, as opposed to somebody who simply has been guilty of a crime when they were in college. We need 

to, and airports want to do more on these checks, particularly of 

our workers, but many of those same concepts apply to security in 

the system in general. 

The CHAIRMAN. Do we need to go further to mandate TSA to 

work with your industry on these issues: access, worker security, 

and basic transportation security? 

Mr. BARCLAY. We have proposals on that, Mr. Chairman, we’d 

like to share with the Committee that we do think that would be 

helpful. It would be helpful for TSA and DHS. It would be helpful 

for us, and they build on the example of successful partnerships I 

was mentioning earlier. 

The CHAIRMAN. Well, there seems to be some disconnect, so we’d 

like to have those. I’m sure the rest of the Committee would like 

to have a chance to look at those. With regard to the airlines themselves, we have some problems about passenger fees. I think that’s 

the subject here, but why does the industry take the position that, 

with the current economy, that these fees would really be a greater 

detriment to travel? Isn’t that your position? 

Mr. MAY. Well, sir, I think our position is that one, aviation security is national security and ought to be paid for accordingly. Two, 

we are already contributing $3.2 billion annually to the TSA. On 

top of that, we have about another $2 billion in out of pocket expenses, that according to the enabling legislation were to have been 

reimbursed, that have never been reimbursed. Issues like cargo security, catering, screening and a whole range of other activities. So, 

we don’t feel like we’re not paying our fair share, since we’re the 

only people paying into DHS or TSA of any industry. And I think 

that needs to change. And the idea that you’re going to levy another $2 billion on an industry that just finished losing $10 billion 

last year, $33 billion over the last 3 years, and expect us to pass 

16

it through to the passenger in an environment where we literally 

don’t have any pricing power, is just wholly unrealistic. It’s going 

to come directly from the bottom line. 

Our carriers have done a terrific job of managing the costs they 

can manage. The ones they can’t are the taxes, the fees, and the 

price of oil. 

The CHAIRMAN. Last question, as I understand it, this fee, if we 

approved it, would not increase the amount of money available to 

TSA, it would just replace some of the current sources of funds. 

Now, what if we said, OK, we’ll approve the fee, but it all has to 

go to TSA, do you think it’s needed? 

Mr. MAY. I think that TSA would have to prove that they’ve got 

a real use for that money that’s going to substantially improve 

aviation security, number one, and they’re going to have to demonstrate that they’ve got a functioning management team that 

knows what they’re doing, number two, and I don’t think those two 

hurdles can be achieved. 

The CHAIRMAN. Thank you. 

Senator Inouye? 

Senator INOUYE. Mr. May, if I may follow up on my Chairman’s 

questioning, isn’t it true that at this moment, most of the legacy 

airlines have fiscal problems? 

Mr. MAY. Sir, we’ve got a number of carriers in Chapter 11, as 

I indicated a moment ago. We lost $10 billion last year as an industry. We’ve got $33 billion in losses over the past 3 years, and we’re 

projecting if oil stays where it is today or near it, that we’ll lose 

another $5 billion this year. 

Now, the good news is that confluence of tough economic news 

has given carriers the opportunity to make changes to their operations, the likes of which they’ve never made. We’ve re-negotiated 

our labor contracts, we’ve achieved fuel efficiency, we’ve changed 

our routing systems, we’ve gotten all sorts of productivity gains in 

place, we’ve eliminated, unfortunately, 130,000 employees just from 

the airlines business, we’ve cut capital spending by billions of dollars annually. But there are some things that we can’t control. 

Taxes and fees imposed by the Federal Government amount to $15 

billion annually on this industry, which only generates about $80 

billion in revenue a year. So, that’s a huge percentage of our 

annualized revenue. And on top of that, we’ve got oil prices that 

are probably $20 higher than any expert would have predicted a 

year and a half ago. 

Senator INOUYE. Can the passenger transportation security fee 

be easily passed on? 

Mr. MAY. Not a prayer, Senator, not a prayer. It will come right 

from the carrier, bottom line. 

Senator INOUYE. And from what you’ve described as to the fiscal 

position, to absorb that would be disaster. 

Mr. MAY. It would be absolutely disastrous and it would be an 

impact, not just on the so-called ‘‘legacy’’ carriers, but on regional 

airlines, on small carriers, independents, the so-called low cost carriers. 

Senator INOUYE. You’ve also indicated that you’ve had to re-negotiate your contract with labor, and I know that some of the airlines 

17

have had three pay cuts, and one, I think, had four pay cuts. Do 

you expect labor to keep on cutting? 

Mr. MAY. Sir, I think anybody that knows anything about this 

business has to feel the pain of the employees that work for our 

carriers. They have been major participants in the process of trying 

to keep us in business, but at some point, others that sit on your 

side of the desk have to understand—and I think you clearly have 

demonstrated that, along with your colleagues here today—that 

proposals like this coming out of government are going to have a 

direct impact on the individual employees of these carriers. 

We’ve laid off, as I said a minute ago, 130,000 of those employ- ees, $2 billion more in revenue out of the bottom line for these carriers is going to mean untold more employees are going to have to 

get laid off because we don’t have the pricing power to put those 

charges through. 

Senator INOUYE. If this fee becomes law, that would mean that 

you would be absorbing about 85 plus percent of the costs of security? 

Mr. MAY. Senator Inouye, that is exactly right. We would, if this 

went through, account for—in direct funds paid—for about 85 percent of TSA’s budget. 

Senator INOUYE. We have no idea as to what the other countries 

have done, but is this typical of what you find, say, in Europe? 

Mr. MAY. No, sir, it is not. It’s not typical of Asia——

Senator INOUYE. How do the French handle this? 

Mr. MAY. I can not tell you specifically how the French handle 

it, but I know that there are very different regimes across the EC. 

Senator INOUYE. They’re much more helpful in the sense that 

they consider this a national security item? 

Mr. MAY. I think that is the case, sir, and I think overall, people 

in other parts of the world do not have the intense level of security 

that we see here in the United States. I think there’s a different 

metric that gets used, they tend to worry more about people than 

they worry about things. You’re an international traveler who 

spends a good bit of time in different parts of the world, and I 

know that as you go through security in other major airports, you’ll 

see it’s a very different environment than that which you find here 

in the United States. 

Senator INOUYE. Mr. Barclay, it’s been suggested by many that 

we’re not looking into appropriate technology, we rely too much 

upon human power, is there any credence to that? 

Mr. BARCLAY. There is on the screening we’re doing of baggage. 

As we were saying, there is actually technology out there right 

now, and if we build it in, we get enormous savings in personnel 

costs at TSA that can more than pay for the building in of that 

equipment. It speeds up the process, and not only does a better job 

of checking the bags, but it makes the experience much more convenient, and it saves personnel for the Federal Government, so, it’s 

hard to come up with an argument against doing it, except that in 

a one-year appropriation process, you don’t have enough money to 

do the capital costs in order to earn the return on the savings you 

get, and that’s a formula we’ve been arguing we should figure out. 

Senator INOUYE. Thank you very much. Thank you, Mr. Chairman. 

18

The CHAIRMAN. Senator Ensign? 

STATEMENT OF HON. JOHN ENSIGN,

U.S. SENATOR FROM NEVADA 

Senator ENSIGN. Thank you, Mr. Chairman. 

I would like to start by addressing the Registered Traveler program, from both of your perspectives. It’s something you both talk 

about supporting. The concept of it sounds good, that you move 

people through more quickly. How do you see it working? Right 

now I look at the employees at the airport, who are supposedly 

trusted travelers, but yet they go through this same security line 

the same way that everybody else does. They may have separate 

security lines, but it’s still a security line. Is that what is foreseen? 

Are these lines just special because there are fewer registered people, so they’ll have shorter lines? Kind of like a first class line? Or, 

do they actually go through less of a screening process? How do you 

foresee it working? Either one of you can start. 

Mr. BARCLAY. You’re dead on, Senator, that with the Registered 

Traveler program, the thing to keep in mind is that we let hundreds of people every day on airplanes with guns, because we’ve 

done background checks on them, and we know they’re not a threat 

to the system. The issue is not spending more of our resources looking for dangerous people rather than dangerous things. A trusted 

person with dangerous things on them is not a threat to the system, and an untrustworthy person with nothing on them is a 

threat to the system, and the lesson of 9/11 was that the powerful 

weapon there was knowledge. It was the hijackers’ knowledge that 

the policy of that day was to do whatever it took to get the plane 

on the ground, be passive in the face of a hijacking, and they used 

that policy against us, and that frankly was a good policy, because 

it had saved thousands of lives in the decades prior to 9/11. 

So, you had people that, it wasn’t the box cutters, as the fourth 

airplane showed, it was that knowledge that was used against us 

of our own system. So, it’s those dangerous people we need to be 

looking hard for. The relationship to Registered Traveler is, if we 

can get people to volunteer lots of information on themselves, and 

we can be confident through biometrics that those people are not 

dangers to the system, having them take laptops out of their bags 

and take their shoes off when we’re using background checks to let 

people on the planes with guns doesn’t make any sense. We need 

to start a Registered Traveler program so we can explain some of 

these things more clearly to the public, I think, and get the public 

to understand that if you are volunteering information on yourself 

and you are part of a Registered Traveler program, you’re really 

doing a lot for everybody’s security. 

Senator ENSIGN. From what you’ve seen at the airports where 

TSA is trying this, is that what they’re doing? 

Mr. MAY. No. 

Senator ENSIGN. That was the point that I was making. From my 

conversations with TSA—all they seem to be doing is gathering information in order to lessen the lines. The reason you can get 

somebody to sign up for a Registered Traveler program is so they 

can speed through a line faster, but if they’re going through exactly 

19

the same thing they went through before, how does that get them 

through the lines? 

Mr. MAY. Sir, we’ve said the same thing, if you don’t provide an 

incentive then you’re not going to have people volunteer the information. The systems, we’ve got five in place today, they don’t talk 

to one another, there were five different carriers, five different airports, and the sixth one is about to start. 

Senator ENSIGN. Let’s take that a little bit further, regarding the 

whole way that TSA operates. TSA, it would seem to me, has identified risk from security checkpoints to the airport. OK, but they 

don’t identify any of the lines they create in back of those security 

checkpoints. As you just talked about, the terrorists take advantage of their knowledge of where the weaknesses in the system are. 

Well, the weakness in the system now is the lines. If you walk in 

with a suitcase bomb, you’re going to kill a lot of people. When 

you’ve got a couple of thousand people in line, like at Dulles airport 

or any of the other major airports during peak times, the CAPP 

system and all of these other various things that they’re doing keep 

adding on. Like you have talked about, trying to go after that miniscule little cigarette lighter, or whatever it is that they’re going 

after, slows the lines down, backs them up, and creates another opportunity for terrorists. It would seem to me that we need to start 

looking at a risk-based system. You’re never going to get rid of everything, so how can you minimize the overall risk to the greatest 

degree for the amount of funding that you have to work with, because you can’t have unlimited screeners and unlimited lines if you 

want to get people through quickly. Given what we have, it would 

seem to me that, using various computerized models where nobody 

could predict it, you let certain people through to keep the lines 

down at certain times. It seems to me that we need more feedback 

from the people on the ground, like yourselves, to put pressure on 

lawmakers, because lawmakers aren’t thinking this way now. TSA 

is a bureaucracy. They’re not going to take chances. They’re not 

going to take a risk by themselves. As lawmakers, we have to make 

those choices. We have to tell TSA that we’re the ones who created 

the monster in the first place, and we have to be the ones to fix 

it. But, we can only do that with your help, giving us the input 

that we need. 

Mr. MAY. Senator, I couldn’t agree more, it’s one of the principal 

three tenets I closed my remarks with, it’s what the 9/11 Commission said, it’s what Heritage has said, it’s what CSIS has said. Everybody who’s looked at it says you have to have a risk-based assessment. We can have perfect security for airlines, nobody will fly, 

and that’s the risk. 

I would suggest that there are probably some folks in your hometown that are pretty good at security, that are also very good at 

moving people and customer service that we could take some lessons from at TSA. 

Senator ENSIGN. All right, I appreciate that. Mr. Chairman, 

thank you. I know that for my state, and states like Hawaii that 

depend so much on tourism, it seems like every time that we start 

getting a handle on moving lines through, TSA comes out with a 

new rulemaking process. As we’ve seen with all of the reports, 

they’re not doing any better of a job, but they keep adding new 

20

rules which make the lines back up again for a while. Until we get 

more resources, Mr. Chairman, we really need—as a Congress—to 

take a hard look at what we’re doing with the money that we’re 

spending. In the long run, we’re just costing more and more in fees, 

we’re costing the economy more, and we’re making it a pain in the 

rear end to travel for anyone who does it on any kind of a regular 

basis. And I thank you. 

Mr. MAY. If I might, Mr. Chairman, the scary part is that we’ve 

got advanced bookings for the summer that are record bookings. 

We’re going to have a lot of people at airports, a lot of people traveling on planes, and we’re delighted for that good news, but it also 

means that if something doesn’t happen soon to expedite that load 

of passengers through these airports headed to Hawaii and Las 

Vegas and New York and other places, then we’re going to have a 

summer that both we and you hear from both of our collective constituents and customers as to why they’ve missed a flight because 

they couldn’t get through security on time. 

The CHAIRMAN. Add Alaska next time. 

Mr. MAY. Yes, sir. Well, that’s where I’m going, personally. 

The CHAIRMAN. Senator Pryor? Oh, pardon me, Mr. Lautenberg. 

Sorry about that, Senator Lautenberg. 

STATEMENT OF HON. FRANK R. LAUTENBERG,

U.S. SENATOR FROM NEW JERSEY 

Senator LAUTENBERG. When age takes over, and all three of us 

have the same exact vintage problem, so—all three veterans of the 

Big War, two heroes and me. 

[Laughter.] 

The CHAIRMAN. My professors once told me I wouldn’t make any 

money until my hair got grey, they were right. You did. 

Senator LAUTENBERG. I’m afraid to step out here, because he is 

still the Chairman, and probably going to be around for the next 

20 years while I’m running. 

To get to a very serious subject and concern that we all share—

the solutions are where we get to the problems. And when we hear, 

Mr. May, about the losses that the airlines have in front of them, 

a question for me is—is it primarily the costs for security? How 

about the costs for fuel? How about the fact that new airlines can 

come in with a lot less capital burden than the ‘‘legacy’’ airlines as 

we call them—isn’t that where a lot of the problem is created, is 

that it’s very hard for the well-established airlines, the names that 

we all know, to compete with the so-called upstarts, the newer airlines? 

Mr. MAY. Senator, your observations are very much on target, as 

always. I mentioned fuel in my testimony as one of the critical elements. There are really two—we’ve taken on all of those costs over 

which we have some degree of control, if you will—there are two 

areas where we have little or no control. One is the price of oil, 

which we had hoped would be in the high thirties, maybe low forties and is now, clearly as we all know, in the low fifties, and that’s 

having just a devastating impact on the business. It is the difference between break-even and having lost a lot of money for most 

of our carriers. Add to that an unconscionable tax burden that, as 

I said, we’re paying as an industry, and we don’t have the luxury 

21

of paying income taxes in this mix, we’re paying literally $15 billion a year on $80 billion in revenue. There’s something wrong with 

that equation. That’s a higher tax load than alcoholic beverages, tobacco, a variety of other sin products where the tax load is intended to discourage consumption. So, I think we need to address 

those areas where we have control. As to the other operational 

parts of the business, there are no effective barriers to entry, the 

market is awash in money. We’ve got some 16 to 18 applications 

at the FAA, as you and I are sitting here today, of people wanting 

to come into the business, as bad as it is. They’ve got a plan that 

they figure they’re going to make some money, so you’ve got pressure on the FAA to issue new 121 certificates, and we’ve got a level 

of competition in the business that creates overcapacity on seats 

that is such that it is having a dramatic impact on pricing. 

Senator ENSIGN. But with your expectations for the summer, as 

robust as they are, it would sound like there won’t be enough seats 

at the rate that we’re going. It’s really a long-term question about 

whether or not in the days of regulation things operated a little 

better, there were fewer problems in terms of scheduling, et cetera. 

Now we’ve reduced the separation. We know more people are flying 

and that delays are not uncommon. I get delayed a lot when I fly 

out of Washington National. When I go north to Newark or New 

York, we’ve got to wait until they clear the decks up there, reduce 

the traffic volume. I chide the pilots often and say, ‘‘You’ve got to 

get faster airplanes here.’’ The fact of the matter is, you sit and 

wait an hour and a quarter to take off—as I did the other day—

for a 36-minute flight, as it’s advertised. We just can’t seem to keep 

up with it. There’s finite space in the sky and you just can’t keep 

throwing more airplanes up there. In particular, Mr. Chairman, if 

one of the goals currently is to get rid of Amtrak, which carries 25 

million passengers a year, that would raise problems that could not 

be dealt with except by some kind of re-regulation, and we don’t 

want to go into that. 

Mr. MAY. Senator Lautenberg, I just spent 2 days at a conference 

sponsored by the FAA dealing with the whole business of funding 

for the Aviation Trust Fund and that expires in 2007—September 

of 2007. I think one of the classic opportunities, as well as challenges, that this Committee is going to face, is what to do about 

the national air space, how do we collapse a system that was built 

in the 1950s and the 1960s that is terribly antiquated that can’t 

handle the capacity that we’ve got coming online. Put with it a reasonable, realistic funding mechanism, add in bonding authority 

where it’s appropriate to do that, and that would become one of the 

great challenges of our time, to make the changes that are necessary in that system. And I think that if we don’t do it, that hour 

and 30-minute wait, or 15-minute wait is going to be 2 hours and 

15 minutes, because we have more planes in the system today than 

it can handle. The explosion of planes coming out of Teterboro, 

coming into the mess, and we’ve got to find a way to handle that, 

and it means new technology, getting rid of the old, duplicative, antiquated systems that we’ve got, finding new funding alternatives 

and making the changes that are going to be very difficult to make 

politically, because there are constituent jobs at stake and so forth. 

22

But I think it is going to be one of the great challenges this Committee faces. 

Senator LAUTENBERG. Mr. Barclay, could the airports pick up 

some of this increased cost that is being proposed? I sit here and 

I speak, not for my colleagues, but I haven’t heard anybody speak 

up on behalf of adding this tax for security, purportedly. Can the 

airports come up with a way to fund it out of their revenue somehow? 

Mr. BARCLAY. I know that with your experience as a Board Member of the Port Authority, you know that airports really don’t make 

money. If new costs come on, they figure out who to charge to pass 

that cost along, but you still wind up with the major airports back 

at the airlines and they’d have to then figure out, could they pass 

it along to the passengers. 

Senator LAUTENBERG. Having been a Board Member of the Commission of the Port Authority before I got here, it’s always been my 

view that the best place to handle security would be at the airports 

themselves, by the airport management, people that are experienced with all of the movements that take place in that airport, instead of having to create an organization outside, amorphous, and 

I really think that TSA is trying its best. We’ve got a new Secretary, and I talk to him fairly frequently. He comes from New Jersey, that doesn’t mean that he caters to New Jersey, but the fact 

of the matter is, he’s trying to get the job done and we wish him 

well, and we just can’t add costs without realizing that we will 

never, ever, ever, capture everyone who has malice intended for us, 

whether it’s through their shoes or through some other system. Except, I now feel better, Mr. Chairman, flying better, the cockpit 

doors are fortified, for the most part, and I’ll never understand 

why, simply—and I’ve mentioned this before—that we don’t have 

a TV camera in the cabin and a monitor in the cockpit for at least 

the pilot or the flying crew to understand if something is wrong in 

the back. 

Thank you, Mr. Chairman, I appreciate it. 

The CHAIRMAN. Thank you very much, Senator. I don’t know why 

we don’t get some money out of people who have businesses in railroad terminals, or money from the people who ride railroads to provide their own security. But this is for another day, right? 

Senator Pryor? 

STATEMENT OF HON. MARK PRYOR,

U.S. SENATOR FROM ARKANSAS 

Senator PRYOR. Mr. Barclay, I’d like to talk to you about in-line 

explosive detection systems, and I think the installation of in-line 

EDS systems at our airports is the single most important thing 

that we can do to increase efficiency in the baggage screening, 

while also improving safety and security at our airports. Do you 

agree with that? 

Mr. BARCLAY. Absolutely. 

Senator PRYOR. OK, now let me ask this, if we had to make the 

initial investment in in-line EDS systems, or we make the investment now for in-line EDS systems now and we were to achieve all 

of the savings and efficiencies that we’ve seen at some of the participating airports, would it be necessary to continue increasing airVerDate 0ct 09 2002 13:39 Oct 02, 2006 Jkt 030055 PO 00000 Frm 00026 Fmt 6633 Sfmt 6601 S:\WPSHR\GPO\DOCS\30055.TXT JACKF PsN: JACKF
23

line security fees? And let me give you a little background on that 

so you understand the context of my question. It just seems to me 

that this is one of those areas where if you make the initial investment, you have some upfront costs; we acknowledge that, that you 

do reap a lot of long-term savings. In fact, I think one of the things 

you talked about in your statement a few moments ago, was Lexington, Kentucky and that airport there, and if I understand your 

facts and figures and the facts coming out of Lexington is that, in 

a little over a year, a year and a few months, maybe the investment in the in-line EDS would have paid for itself. Am I understanding that correctly? 

Mr. BARCLAY. Exactly. They spent $3.5 million to build the inline system, and they save $3 million a year, so in the second year, 

you’re making money. 

Senator PRYOR. So, that was my question, if we did make the initial investment, would we have to, over the long haul, increase the 

security fees because it seems that this investment does pay for 

itself rather quickly, do you agree with that? 

Mr. BARCLAY. Yes, sir. We’ll do a calculation and get back to the 

Committee on what the savings over, like a ten-year period would 

be, and compare that to what the charges are. What we’ve been 

doing, mostly, is just trying to justify the initial building in. You 

can easily cover the $3 to $5 billion—depending on whose estimate 

it is—to build them in, but you then earn the ongoing savings for 

TSA. I mean, in just the airports that have them, I think the numbers, I was trying to find them here, went from like 6,500 employees down to 1,400 employees. It was an enormous drop in employment, so there are big savings there to be had over time. 

Senator PRYOR. I did want to ask about Lexington, I don’t know 

all the airports that are participating in this, but that’s one that 

seems to be, you know demographically somewhat similar to the 

two biggest airports in my state at least, a little difference probably 

here and there, but nonetheless, some, a lot of similarities. And I 

was curious if there’s something about Lexington that makes it 

unique, or could you take that Lexington model and sort of put it 

across the whole system, and apply what we’ve learned at Lexington to the whole system. 

Mr. BARCLAY. In fact, I was just recently down at Little Rock, 

and they’ve got a model in-line system. I don’t have the numbers 

on what it cost and what they saved, but GAO examined just nine 

airports, and found that at those airports, over 7 years you’ll save 

$1.3 billion, after you pay for the cost of building, everything to 

build them in. So, it is across the system that you get this savings. 

Senator PRYOR. Wait a minute, that’s nine airports, and you save 

$1.3 billion over 7 years? 

Mr. BARCLAY. After you pay for the cost of installing, so if you 

extrapolate that in the system, you’re talking about some big numbers. That’s why we’re saying it’s smart government to earn that 

ongoing savings by doing upfront costs. We’ve had some people in 

governments say to us, ‘‘Well you airports should go pay the cost 

to build those in.’’ And the problem with that is the savings go to 

TSA, so you can’t tell one party to absorb the capital costs, and 

then pass it on to your tenants, while somebody else is getting the 

savings, you’ve got to connect up that revenue stream of the savVerDate 0ct 09 2002 13:39 Oct 02, 2006 Jkt 030055 PO 00000 Frm 00027 Fmt 6633 Sfmt 6601 S:\WPSHR\GPO\DOCS\30055.TXT JACKF PsN: JACKF
24

ings. Airports will go out and float bonds to build in these systems 

at the bigger airports, but they need to know they’ve got a revenue 

stream coming in to pay that bond off, but then TSA gets a permanent savings in personnel for doing that. 

Senator PRYOR. OK, well I think we in the Congress need to really think through that, and like you said, come up with the smartest 

approach on that because I think if we are smart, we can be efficient and effective at the same time. 

Mr. May, let me ask you now if I may, and I want you to be careful about how you answer this question, because you have three 

Senators here who have some small airports in their states, so 

we’re all concerned about how what you all do impacts small airports, and I’m an advocate for small airports and smaller communities being able to access air travel, but how will increased fees 

affect small airports? Affect communities with small airports? 

Mr. MAY. Senator, I’ve never been very good about being careful 

about what I say, and so I guess just being right out with it, there 

is a thing—you’re very familiar with it, I’m sure, called Essential 

Air Services—and there are subsidies that are effectively provided 

to provide service to a lot of small airports. I don’t have to look any 

further than what’s going on in my industry today to tell you 

what’s going to happen. The first places that get cut from the service schedule are the places that are the least profitable, and then 

we begin to cut back on frequency to larger places, and all of that 

is happening, we’re shutting down hubs, that’s all part of the reorganization of the industry, and I will guarantee you that the people 

who get hit hardest by this tax, just in the way it would be collected, if you will, will be people in small communities. I will also 

guarantee you that, to the extent it has the devastating effect on 

our industry that we suggest it will, then the next place to go will 

be those least profitable, frequently smaller communities that we’re 

serving today. And it’s a pure economic choice. Do we eliminate 

service or do we let the company go bankrupt? 

Senator PRYOR. So, not to put words in your mouth, but in summary, it sounds like what you’re saying is that these increased fees 

may lead, or may be one of the factors in the closure of smaller airports. 

Mr. MAY. Senator, when you put those words together, you can 

put them in my mouth anytime you want. That’s exactly right. 

Senator PRYOR. Thank you. 

The CHAIRMAN. Senator, I’m told that the fees now collected, $2.3 

billion, which support about $23 billion in bonding, assume that 

you don’t have any of the screening processes for passengers, I was 

going to ask the question, whether there would be the opposition 

to the fees if we dedicated them to the payment of the bonding for 

the new baggage screening concepts that are before us. 

Mr. MAY. I suspect that you might have a difference of opinion 

at the table here on that, Senator. We very firmly believe that 

we’re at the max of what we’re paying into the TSA right now, we 

don’t disagree that they need to have more equipment, and that it 

needs to have higher volume and that they need to be able to handle greater size of packages going through for cargo, in particular, 

and greater in-line EDS screening, but we very firmly don’t believe 

that that ought to come out of the hides of the airlines. 

25

Mr. BARCLAY. Mr. Chairman, let me add that there wouldn’t be 

a disagreement. We do, again, think the first place you want to 

look to for the funding source for building in-line are the people 

who are going to get the savings end of the cost of their personnel, 

because that savings more than pays back the cost of building 

them in. So, we really should look for a creative financing mechanism within government, because government’s going to earn that 

savings, and it’s going to be real and valuable to them in very short 

order, and airports will make it, will use their capital financing capabilities to make it even easier for government to do that. 

The CHAIRMAN. That would be all right, if we could find what 

portion that we could take away from TSA now to dedicate now to 

those bonds. Perhaps the next version of ‘‘Aviation News Today’’ 

will give us a solution. 

[Laughter.] 

The CHAIRMAN. You want another question, Senator? 

Senator INOUYE. I want to make a motion. 

The CHAIRMAN. Oh, that’s right, I was just going to say this 

hearing is over. 

Senator INOUYE. But before I make a motion, I think it should 

be noted that we are not imposing any passenger security fee on 

railroad companies. 

The CHAIRMAN. Yes. 

Senator INOUYE. Mr. Chairman, subject to the presence of a 

quorum, and that this motion be operational, after the first vote in 

the Senate chamber, I move that the Committee go into Executive 

Session to consider the nominations of Maria Cino to be Deputy 

Secretary of Transportation, Phyllis Sheinberg to be Assistant Secretary of Transportation, Joseph Boardman to be Administrator of 

the Federal Railroad Administration, Nancy Nord to be Commissioner of the Consumer Products Safety Commission, and William 

Cobey to be a member of the Board of Directors of the Washington 

Metropolitan Airport Authority. Will you second the motion? 

Senator PRYOR. Seconded. 

The CHAIRMAN. Thank you very much gentlemen, that will mean 

that after the first vote on the floor that takes place after this 

Committee recesses today, we’ll meet in the President’s Room to 

vote on Senator Inouye’s motion, that will be to consider them all 

in block, all of the nominations that have been put before the Committee by the Senator from Hawaii, our Co-Chairman. It will be 

our intent to hold the usual concept of members making their vote 

in person in the President’s Room. 

We do thank you very much, gentlemen, I think we should find 

some way to deal with this question in the next generation of 

screening for baggage. That will save some money, as you indicated, but we have to find somebody to put it in before you save 

it, and I think we in this Committee should work with you to work 

it out so there isn’t this apparent conflict, and somehow, there has 

to be an answer to that. And we will work with you to do that. 

I think also you should know that we’re continuing our conferences with TSA on a security basis, and on a confidential basis 

to review the whole TSA program, and the classified portion of that 

program, so that we can find some way to reduce the costs of 

26

what’s going on now. We will keep you informed of the outcome of 

that. 

Thank you very much, and we will announce our next scheduled 

hearing. 

[Whereupon, at 3:45 p.m., the hearing was adjourned.] 

(27)

APPENDIX

ELECTRONIC PRIVACY INFORMATION CENTER (EPIC) 

Washington, DC, April 25, 2005

Hon. TED STEVENS, Chairman,

Hon. DANIEL K. INOUYE, Co-Chairman,

Senate Committee on Commerce, Science, and Transportation, 

Washington, DC.

Dear Chairman Stevens and Co-Chairman Inouye,

We are writing on behalf of the Electronic Privacy Information Center (EPIC) concerning the proposed Transportation Security Administration (TSA) budget for Fiscal Year 2006. We would like to bring to your attention the significant increase in 

surveillance funding requested by TSA. We ask that this letter be included in the 

hearing record. 

EPIC strongly opposes this increase in Federal funding for TSA’s surveillance programs. In its development and implementation of these surveillance programs, TSA 

has frustrated efforts to obtain openness and transparency under the Freedom of 

Information Act, and the agency has violated the spirit if not the letter of the Privacy Act. TSA also has shown a proclivity to using personal information for reasons 

other than the ones for which the information was gathered or volunteered. In addition, the public has had considerable difficultly with the agency’s redress procedures. Furthermore, TSA has shown poor management of its financial resources. 

We urge you to inquire what steps the agency will take to protect privacy and 

ensure transparency in data collection and use. We also urge you to scrutinize TSA’s 

current redress procedures. Finally, we recommend against funding the Office of 

Screening Coordination and Operations. 

President Bush’s proposed budget would increase TSA spending by $156 million 

to $5.6 billion for FY 2006, but this increase is contingent upon $1.5 billion that 

will be generated by a 120 percent jump in security fees assessed to airline passengers. 1 Assistant Secretary David M. Stone defended the increase at the February 

15, 2005, hearing before the Senate Committee on Commerce, Science and Transportation saying air passengers, not the general public, should pay for air travel security. 2 However, this money will not go toward new security measures, but will replace funds now provided by the government for current air traveler security programs. 3

Assistant Secretary Stone also testified that this increased fee would mean ‘‘resources from the general taxpayer could be used for more broadly applicable homeland security needs,’’ but he did not define what these needs would be. 4 Other programs under TSA that are receiving an increase in funding in the proposed FY 2006 

budget include surveillance programs that have significant privacy implications for 

tens of millions of American citizens and lawful foreign visitors. 

When it enacted the Privacy Act, 5 U.S.C. § 552a, in 1974, Congress sought to restrict the amount of personal information that Federal agencies could collect and required agencies to be transparent in their information practices. 5 The Privacy Act 

is intended ‘‘to promote accountability, responsibility, legislative oversight, and open 

government with respect to the use of computer technology in the personal information systems and data banks of the Federal Government[.]’’ 6

The Supreme Court as recently as last year underscored the importance of the 

Privacy Act’s restrictions upon agency use of personal information to protect privacy 

interests, noting that:

‘‘[I]n order to protect the privacy of individuals identified in information systems 

maintained by Federal agencies, it is necessary . . . to regulate the collection, 

maintenance, use, and dissemination of information by such agencies.’’ Privacy 

Act of 1974, § 2(a)(5), 88 Stat. 1896. The Act gives agencies detailed instructions 

28

for managing their records and provides for various sorts of civil relief to individuals aggrieved by failures on the Government’s part to comply with the requirements. 7

It is critical for TSA’s programs to adhere to these requirements, as the programs 

have a profound effect on the privacy rights of a large number of American citizens 

and lawful foreign visitors every year. However, TSA has failed to follow the spirit 

of the Privacy Act during development of these surveillance programs. 

Recent Government Reports Show Problems Within TSA Programs 

The Government Accountability Office (GAO) and the Department of Homeland 

Security Inspector General last month released reports that were critical of the 

Transportation Security Administration. 8 These reports highlight the agency’s failures concerning privacy rights, transparency, and redress procedures. 

The GAO’s March report examined the Transportation Security Administration 

measures for testing the use of commercial data within Secure Flight, the agency’s 

passenger prescreening program currently under development. The report, commissioned by Congress, found that the agency still has many issues to address before 

the viability of Secure Flight can be determined. 9 The GAO was unable to assess, 

among other things, the effectiveness of the system, the accuracy of intelligence data 

that will determine whether passengers may fly, safeguards to protect passenger 

privacy, and the adequacy of redress for passengers who are improperly flagged by 

Secure Flight. 10 The GAO specifically found that TSA ‘‘has not yet clearly defined 

the privacy impacts of the operational system or all of the actions TSA plans to take 

to mitigate potential impacts.’’ 11

TSA is requesting an increase of $49.3 million for its Secure Flight program to bring its FY 2006 budget to $94 million. 12 The Secure Flight passenger 

prescreening program could affect the tens of millions of citizens who fly every year, 

but in the creation of the program, TSA has frustrated efforts to obtain information 

under the Freedom of Information Act, and its actions concerning openness and 

transparency have violated the spirit of the Privacy Act. 

Also in March, the Department of Homeland Security Inspector General issued 

findings on TSA’s role in collecting and disseminating airline passenger data to 

third party agencies and companies. The report revealed that the agency has been 

involved in 14 transfers of data involving more than 12 million passenger records. 13

The Inspector General found, among other things, that ‘‘TSA did not consistently 

apply privacy protections in the course of its involvement in airline passenger data 

transfers.’’ 14 Furthermore, TSA did not accurately represent to the public the scope 

of its passenger data collection and use. 15

The Inspector General’s critical report comes almost a year after the agency’s admission that it had acted improperly with regard to passenger data collection and 

use. In June 2004 then-TSA Acting Administrator Admiral David Stone admitted 

to the Senate Governmental Affairs Committee that in 2002 TSA facilitated the 

transfer of passenger data from American Airlines, Continental Airlines, Delta Airlines, America West Airlines, Frontier Airlines, and JetBlue Airways to TSA ‘‘cooperative agreement recipients’’ for purposes of CAPPS II testing, as well as to the 

Secret Service and IBM for other purposes. 16 Stone also stated that Galileo International and ‘‘possibly’’ Apollo, two central airline reservation companies, had provided passenger data to recipients working on behalf of TSA. 17 Further, TSA directly obtained passenger data from JetBlue and Sabre, another central airline reservation company, for CAPPS II development. 18 TSA did not observe Privacy Act 

requirements with regard to any of these collections of personal information. 19

Stone’s admission followed repeated denials to the public, Congress, GAO, and Department of Homeland Security Privacy Office that TSA had acquired or used real 

passenger data to test CAPPS II. 20 TSA exhibited a proclivity for using personal 

information for reasons other than the ones for which the information was gathered 

or volunteered. 

Another example of TSA’s failure to operate its programs with the openness and 

transparency necessary under the Federal open government laws is its recent creation of an Aviation Security Advisory Committee Secure Flight Privacy/IT Working 

Group. It appears to EPIC that, based upon the little public information that is currently available, the working group is subject to the Federal Advisory Committee 

Act (FACA), 5 U.S.C. App. 1, which includes the requirement that the working 

group publish notices of their meetings in the Federal Register. However, the formation of this working group was not announced in the Federal Register, and neither 

TSA nor the Department of Homeland Security has publicly acknowledged its existence or defined its mission. EPIC sent a letter in January to TSA’s privacy officer, 

Lisa Dean, to ask for an explanation as to why this working group is not operating 

with the transparency and openness required under FACA. 21 In her March reVerDate 0ct 09 2002 13:39 Oct 02, 2006 Jkt 030055 PO 00000 Frm 00032 Fmt 6601 Sfmt 6621 S:\WPSHR\GPO\DOCS\30055.TXT JACKF PsN: JACKF
29

sponse letter, Ms. Dean advised us that Transportation Security Administration’s 

position was that the work and materials of working group are subject to FACA. 22

The agency was noncommittal about the FOIA status of the material. 23

TSA’s Lapses in Public Accountability 

The Freedom of Information Act (FOIA), 5 U.S.C. § 552, establishes a legal right 

for individuals to obtain records in the possession of government agencies. The 

FOIA helps ensure that the public is fully informed about matters of public concern. 

Government agencies are obligated to meet the requirements of open government 

and transparency under the FOIA, but TSA has frustrated efforts to obtain information under the FOIA during the creation of these surveillance programs. 

In September 2004, TSA announced plans to test the Secure Flight program. Secure Flight is intended to replace the now-defunct CAPPS II, but it includes many 

elements of the CAPPS II program, which was abandoned largely due to privacy 

concerns. 24 TSA said that ‘‘Secure Flight will involve the comparison of information 

for domestic flights to names in the Terrorist Screening Database (TSDB) maintained by the Terrorist Screening Center (TSC), to include the expanded TSA NoFly and Selectee Lists, in order to identify individuals known or reasonably suspected to be engaged in terrorist activity.’’ 25

On September 28, 2004, EPIC submitted a FOIA request to TSA asking for information about Secure Flight. 26 EPIC asked that the request be processed expeditiously, noting the intense media interest surrounding the program. Specifically, 

EPIC demonstrated that 485 articles had been published about the program since 

TSA announced its plans for Secure Flight. EPIC also mentioned the October 25, 

2004, deadline for public comments on the test phase of the system, explaining the 

urgency for the public to be as well informed as possible about Secure Flight in 

order to meaningfully respond to the agency’s proposal for the program. TSA determined these circumstances did not justify the information’s immediate release, and 

refused EPIC’s request that the information be made public prior to the October 25 

deadline for these comments. TSA also denied EPIC a fee waiver, which the agency 

has never done before in its three-year existence. This maneuver imposed a significant procedural barrier to EPIC’s ability to obtain the information. EPIC appealed 

TSA’s decision, noting that the agency’s actions were unlawful. Rather than defend 

its position in court, TSA has released a minimal amount of the information that 

EPIC requested. EPIC continues to seek from TSA information about the program 

that will affect tens of millions of airline passengers each year. 

Problems With TSA Redress Procedures 

The recently enacted Intelligence Reform and Terrorism Prevention Act of 2004 

directed TSA to create a system for travelers to correct inaccurate information that 

has caused their names to be added to the no-fly list. 27 TSA maintains that it has 

an adequate redress process to clear individuals improperly flagged by watch lists; 

however, it is well known that individuals encounter great difficulty in resolving 

such problems. Senators Ted Kennedy (D–MA) and Don Young (R–AK) are among 

the individuals who have been improperly flagged by watch lists. 28 Sen. Kennedy 

was able to resolve the situation only by enlisting the help of then-Homeland Security Secretary Tom Ridge; unfortunately, most people do not have that option. 

In March, Rep. Loretta Sanchez (D–CA) highlighted problems that everyday 

Americans have with the current TSA redress procedure. At a hearing of the House 

Subcommittee on Economic Security, Infrastructure Protection, and Cybersecurity 

concerning the proposed Fiscal Year 2006 budget, Rep. Sanchez reported that many 

of her constituents continue to face lengthy delays, questioning, and at times are 

prohibited from boarding flights because they are misidentified as people sought on 

no-fly lists. 29 Her constituents continue to face these roadblocks even after they 

apply for, receive and then display to screener personnel the official Federal Government letters that establish their innocence. Rep. Sanchez questioned TSA officials 

about why current redress procedures have failed these American citizens. This 

issue remains important, as the GAO’s March report examining Secure Flight found 

that ‘‘TSA has not yet clearly defined how it plans to implement its redress process 

for Secure Flight, such as how errors, if identified, will be corrected, particularly if 

commercial databases are used.’’ 30

TSA Has Violated the Spirit of Federal Privacy Laws 

The proposed FY 2006 budget accords TSA’s Registered Traveler program $22 

million. 31 This is a pilot program TSA began conducting in July 2004 and is now 

operating at five airports. 32 The preliminary results are being examined by TSA to 

determine whether the program should be expanded to other airports. Registered 

Traveler allows frequent travelers to submit digital fingerprints, iris scans and undergo a background check in exchange for receiving a fast pass through the airport 

30

checkpoint. (The International Registered Traveler program was announced in January.) 33

TSA first published a Federal Register notice about the program in June 2004. 34

In July 2004, EPIC submitted comments to address the substantial privacy issues 

raised by the Registered Traveler program and the new system of records established to facilitate the program. 35 EPIC requested that TSA substantially revise its 

Privacy Act notice prior to implementation of the final phase of Registered Traveler. 

TSA’s subsequent Federal Register notice of the implementations of Privacy Act exemptions in the Registered Traveler program did not solve any the privacy right 

threats that EPIC highlighted in its comments. 

TSA’s notice for the Registered Traveler system of records, however, exempts the 

system from many protections the Privacy Act is intended to provide. 36 As proposed 

in the notice, Registered Traveler is a program for which TSA is asking individuals 

to volunteer information that will be used to conduct potentially invasive background checks in exchange for the determination that they have a relatively low 

likelihood of being terrorists or connected to terrorists, and may be subject to less 

security screening than others prior to boarding airplanes. However, TSA has unnecessarily exempted the system from crucial safeguards intended to promote record 

accuracy and secure the privacy of individuals whose information is maintained 

within the system. TSA will be under no legal obligation to inform the public of the 

categories of information contained in the system or provide the ability to access 

and correct records that are irrelevant, untimely or incomplete. The program will 

contain information that is unnecessary and wholly irrelevant to the determination 

of whether an individual poses a threat to aviation security. 

Questions Remain About the Transportation Worker Identity Credential 

Program 

TSA is requesting $244 million for its pilot Transportation Worker Identity Credential program (TWIC) for FY 2006. 37 TWIC is an identification card given to 

transportation workers, authorized visitors and all other persons requiring 

unescorted access to transportation infrastructure secure areas. The program is operating at 34 sites in six states, but TSA hopes to eventually extend the program 

to workers in all modes of transportation, which could encompass as many as 6 million people. 38 Persons required to have the identification card submit sensitive personal and biometric information to a central TSA database used to validate a person’s eligibility to access these areas. EPIC submitted comments in November 2004 

highlighting the dangers to travelers’ privacy rights inherent in the program. 39 TSA 

has not released information clearly explaining to the public how it intends to safeguard the sensitive personal information gathered on program participants. The 

lack of transparency and openness about TWIC is against the spirit of Federal open 

government laws. 

Another important reason not to increase the funding for TWIC is because TSA 

has not used its current funding judiciously. The GAO reviewed TWIC in December 

2004, and found that because of program delays, some port facilities are forced to 

proceed ‘‘with plans for local or regional identification cards that may require additional investment in order to make them compatible with the TWIC system. Accordingly, delays in the program may affect enhancements to port security and complicate stakeholder’s efforts in making wise investment decisions regarding security 

infrastructure.’’ 40

The financial problems encountered in TSA’s TWIC program are emblematic of 

TSA’s troubles managing its finances, according to the GAO. Cathleen Berrick, GAO 

Director of Homeland Security and Justice, told the Senate Committee on Commerce, Science, and Transportation on February 15, 2005, that TSA had not always 

‘‘conducted the systematic analysis needed to inform its decision-making processes 

and to prioritize its security improvements.’’ 41 Examples include the fact that in FY 

2005, TSA was forced to transfer about $61 million from its Research and Development budget of $110 million, to support its operations, such as personnel costs for 

screeners. 42

A significant issue is that these surveillance programs are receiving substantial 

funding and TSA manpower while the current aviation program to screen passengers and their luggage for dangerous objects is woefully inadequate. Ms. Berrick 

reported at the February 15 hearing that there has been only modest progress in 

how well screeners detect threat objects following a report last year that documented gaps in screener security. 43 The increased funds that TSA has earmarked 

for surveillance programs can also be used in another important program: Threat 

Assessment of General Aviation. The GAO reported that ‘‘though the Federal Bureau of Investigation has said that terrorists have considered using general aviation 

to conduct attacks, a systematic assessment of threats has not been conducted.’’ 44

31

TSA has cited cost as the reason that TSA has conducted vulnerability assessments 

at only a small number of the 19,000 general aviation airports nationwide. 

Office of Screening Coordination and Operations Raises New Privacy

Problems 

The Department of Homeland Security (DHS) has proposed the creation and funding of the Office of Screening Coordination and Operations (SCO), which would oversee vast databases of digital fingerprints and photographs, eye scans and personal 

information from millions of Americans and foreigners. This office would be responsible for United States-Visitor and Immigrant Status Indicator Technology (US–

VISIT), Free and Secure Trade, NEXUS/Secure Electronic Network for Travelers 

Rapid Inspection, TWIC, Registered Traveler, Hazardous Materials Trucker Background Checks, and Alien Flight School Checks. 45 This mass compilation of personal information has inherent dangers to citizens’ privacy rights and it is imperative that SCO fulfill its legal obligations for openness and transparency under the 

FOIA and Privacy Act. 

According to the proposed FY 2006 budget, the mission of the proposed SCO is 

‘‘to enhance the interdiction of terrorists and the instruments of terrorism by 

streamlining terrorist-related screening by comprehensive coordination of procedures that detect, identify, track, and interdict people, cargo and conveyances, and 

other entities and objects that pose a threat to homeland security.’’ 46 The budget 

goes on to say that ‘‘the SCO would produce processes that will be effected in a manner that safeguards legal rights, including freedoms, civil liberties, and information 

privacy guaranteed by Federal law.’’ 47 It is unclear, however, what steps the office 

intends to take to protect these rights. 

There is a significant risk that the creation and funding of the SCO would allow 

for mission creep—a risk that the data collected and volunteered by airline passengers, transportation workers and foreign visitors will be used for reasons not related to their original aviation security purposes. Though TSA has stated that it will 

not use the sensitive personal data of tens of millions of Americans for non-aviation 

security purposes, TSA documents about the CAPPS II program collected by EPIC 

under the FOIA clearly show that TSA had considered using personal information 

gathered for CAPPS II for reasons beyond its original purposes. For example, TSA 

stated that CAPPS II personal data might be disclosed to Federal, state, local, foreign, or international agencies for their investigations of statute, rule, regulation or 

order violations. 48 Again, TSA exhibited a proclivity for using personal information 

for reasons other than the ones for which the information was gathered or volunteered. 

The Transportation Security Administration has frustrated efforts to ensure openness and transparency under the Freedom of Information Act and has violated the 

spirit of the Privacy Act for the protection of privacy rights in the development of 

the above programs. TSA also has shown a proclivity for using personal information 

for reasons other than the ones for which the information was gathered or volunteered. The agency’s current redress procedures have failed to resolve valid grievances of innocent citizens flagged by the no-fly lists. TSA also has shown poor management of its financial resources. For these reasons, EPIC strongly opposes the 

sharp increase in funding for TSA’s surveillance programs proposed in the president’s FY 2006 budget, and specifically opposes funding of the Office of Screening 

Coordination and Operations. 

Thank you for your consideration of these issues. 

Sincerely yours, 

MARC ROTENBERG, 

Executive Director.

MARCIA HOFMANN, 

Director, Open Government Project.

MELISSA NGO, 

Staff Counsel.

ENDNOTES 1Transportation Security Administration Statement of Assistant Secretary David 

M. Stone Before the Committee on Commerce, Science, and Transportation (Feb. 15, 

2005). 2 Id. at 6. 3 Id. 4 Id. 5S. Rep. No. 93–1183, at 1 (1974). 

6 Id. 

32

7Doe v. Chao, 540 U.S. 614, 618 (2004). 8Government Accountability Office, Secure Flight Development and Testing Under 

Way, but Risks Should Be Managed as System Is Further Developed, GAO–05–356 

(March 2005) (hereinafter ‘‘GAO Report’’). Department of Homeland Security Inspector General, Review of the Transportation Security Administration’s Role in the Use 

and Dissemination of Airline Passenger Data (Redacted), OIG–05–12 (March 2005) 

(‘‘OIG Report’’). 9GAO Report, supra at 53. See generally EPIC’s Secure Flight page at http://

www.epic.org/privacy/airtravel/secureflight.html. 10GAO Report, supra at 53–62. 11 Id. at 7. 12Department of Homeland Security, Budget-in-Brief Fiscal Year 2006, at 21 

(Feb. 7, 2005) (‘‘DHS Budget’’). 13OIG Report, supra at 6–7. 14 Id. at 40. 15 Id. at 42–48. 16See U.S. Senate Committee on Governmental Affairs Pre-hearing Questionnaire 

for the Nomination of Admiral David Stone to be Assistant Secretary of Homeland 

Security, Transportation Security Administration 17, 19, available at http://

www.epic.org/privacy/airtravel/stonelanswers.pdf. 17 Id. 18 Id. at 19. 19 Id. at 18. 20See, e.g., Ryan Singel, More False Information From TSA, Wired News, June 

23, 2004 (‘‘After the JetBlue transfer was brought to public attention in September 

2003, TSA spokesman Brian Turmail told Wired News that the TSA had never used 

passenger records for testing CAPPS II, nor had it provided records to its contractors. In September 2003, Wired News asked TSA spokesman Nico Melendez whether 

the TSA’s four contractors had used real passenger records to test and develop their 

systems. Melendez denied it, saying,‘‘ ‘We have only used dummy data to this point.’ 

’’); U.S. Representative John Mica (R–FL) Holds Hearing on Airline Passenger 

Profiling Proposal: Hearing Before the Aviation Subcomm. of the House Transportation and Infrastructure Comm., 105th Cong. (March 2004) (Admiral Stone testifying that CAPPS II testing was likely to begin in June 2004); GAO Report at 17 

(‘‘TSA has only used 32 simulated passenger records—created by TSA from the 

itineraries of its employees and contractor staff who volunteered to provide the 

data—to conduct [CAPPS II] testing’’); Department of Homeland Security Privacy 

Office, Report to the Public on Events Surrounding jetBlue Data Transfer (Feb. 2004) 

8 (‘‘At this time, there is no evidence that CAPPS II testing has taken place using 

passenger data’’). 21Letter from David Sobel, General Counsel, EPIC, and Marcia Hofmann, Staff 

Counsel and Director, Open Government Project, EPIC, to Lisa Dean, Privacy Officer, Office of Transportation Security Policy, TSA, Jan. 31, 2005 (on file with EPIC). 22Letter from Lisa S. Dean, Privacy Officer, Office of Transportation Security Policy, TSA, to David Sobel, General Counsel, EPIC, Mar. 2, 2005 (on file with EPIC.) 23 Id. 24See Sara Kehaulani Goo and Robert O’Harrow Jr., New Screening System Postponed, Washington Post, July 16, 2004, at A02. 25System of Records Notice, Secure Flight Test Records, 69 Fed. Reg. 57345 (Sept. 

24, 2004). 26Letter from Marcia Hofmann, Staff Counsel, EPIC, to Patricia Reip-Dice, Associate Director, FOIA Headquarters Office, TSA, Sept. 28, 2004 (on file with EPIC). 27P.L. No. 108–458 (2004). 28See, e.g., Sara Kehaulani Goo, Committee Chairman Runs Into Watch-List Problem, Washington Post, Sept. 30, 3004; Leslie Miller, House Transportation Panel 

Chairman Latest to be Stuck on No-Fly List, Associated Press, Sept. 29, 2004; Richard Simon, Iconic Senator Is Suspicious to Zealous Airport Screeners, Los Angeles 

Times, Aug. 20, 2004; Shaun Waterman, Senator Gets a Taste of No-Fly List Problems, United Press International, Aug. 20, 2004. 29Shaun Waterman, No Redress Mechanism in New DHS Terrorist Screening Office, United Press International, Mar. 2, 2005. 

30GAO Report, supra at 7. 31DHS Budget, supra at 21. 32Press Release, U.S. Department of Homeland Security TSA, Secretary Ridge 

Unveils Registered Traveler Pilot Program At Reagan National Airport (Sept. 3, 

2004). 

33

33Press Release, U.S. Department of Homeland Security, Secretary Tom Ridge Announces Enhancement of Expedited Traveler Program Through New York’s JFK Airport (Jan. 13, 2005). 34Privacy Act Notice, 69 Fed. Reg. 30948 (June 1, 2004). 35 Comments of the Electronic Privacy Information Center on Registered Traveler 

Operations Files Privacy Act Notice, June 1, 2004, available at http://

www.epic.org/privacy/airtravel/rtlcomments.pdf. 36Privacy Act Notice, 69 Fed. Reg. 54256 (Sept. 8, 2004). 37DHS Budget, supra at 21. 38TSA’s fact sheet on the Registered Traveler program, available at www.tsa.gov/

interweb/assetlibrary/RTlFactsheet.pdf. 39 Comments of the Electronic Privacy Information Center on Transportation Security Threat Assessment System and Transportation Worker Identification 

Credentialing System Privacy Act Notice, Sept. 24, 2004, available at http://

www.epic.org/privacy/airtravel/twiclcomments.pdf. 40Government Accountability Office, Transportation Security: Systematic Planning Needed to Optimize Resources, Statement of Cathleen A. Berrick, Director 

Homeland Security and Justice, GAO–05–357T (Feb. 15, 2005). 41 Id. at 2. 42 Id. at 31. 43 Id. at 11. 44 Id. at 17. 45DHS Budget, supra at 6. 46DHS Budget, supra at 19. 47 Id. 48Transportation Security Administration, Department of Homeland Security,

Draft Privacy Impact Statements (CAPPS II), April 17, 2003, July 29, 2003, and July 

30, 2003, obtained by EPIC through FOIA litigation, available at http://

www.epic.org/privacy/airtravel/profiling.html.

Æ