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34–781 PDF 2007

THE PRESIDENT’S FY08

FEDERAL AVIATION ADMINISTRATION’S BUDGET

(110–10)

HEARING

BEFORE THE

SUBCOMMITTEE ON 

AVIATION

OF THE

COMMITTEE ON 

TRANSPORTATION AND 

INFRASTRUCTURE 

HOUSE OF REPRESENTATIVES

ONE HUNDRED TENTH CONGRESS

FIRST SESSION

FEBRUARY 14, 2007

Printed for the use of the 

Committee on Transportation and Infrastructure

(

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE 

JAMES L. OBERSTAR, Minnesota, Chairman 

NICK J. RAHALL, II, West Virginia 

PETER A. DEFAZIO, Oregon 

JERRY F. COSTELLO, Illinois 

ELEANOR HOLMES NORTON, District of 

Columbia 

JERROLD NADLER, New York 

CORRINE BROWN, Florida 

BOB FILNER, California 

EDDIE BERNICE JOHNSON, Texas 

GENE TAYLOR, Mississippi 

JUANITA MILLENDER-MCDONALD, 

California 

ELIJAH E. CUMMINGS, Maryland 

ELLEN O. TAUSCHER, California 

LEONARD L. BOSWELL, Iowa 

TIM HOLDEN, Pennsylvania 

BRIAN BAIRD, Washington 

RICK LARSEN, Washington 

MICHAEL E. CAPUANO, Massachusetts 

JULIA CARSON, Indiana 

TIMOTHY H. BISHOP, New York 

MICHAEL H. MICHAUD, Maine 

BRIAN HIGGINS, New York 

RUSS CARNAHAN, Missouri 

JOHN T. SALAZAR, Colorado 

GRACE F. NAPOLITANO, California 

DANIEL LIPINSKI, Illinois 

DORIS O. MATSUI, California 

NICK LAMPSON, Texas 

ZACHARY T. SPACE, Ohio 

MAZIE K. HIRONO, Hawaii 

BRUCE L. BRALEY, Iowa 

JASON ALTMIRE, Pennsylvania 

TIMOTHY J. WALZ, Minnesota 

HEATH SHULER, North Carolina 

MICHAEL A. ACURI, New York 

HARRY E. MITCHELL, Arizona 

CHRISTOPHER P. CARNEY, Pennsylvania 

JOHN J. HALL, New York 

STEVE KAGEN, Wisconsin 

STEVE COHEN, Tennessee 

JERRY MCNERNEY, California 

JOHN L. MICA, Florida 

DON YOUNG, Alaska 

THOMAS E. PETRI, Wisconsin 

HOWARD COBLE, North Carolina 

JOHN J. DUNCAN, JR., Tennessee 

WAYNE T. GILCHREST, Maryland 

VERNON J. EHLERS, Michigan 

STEVEN C. LATOURETTE, Ohio 

RICHARD H. BAKER, Louisiana 

FRANK A. LOBIONDO, New Jersey 

JERRY MORAN, Kansas 

GARY G. MILLER, California 

ROBIN HAYES, North Carolina 

HENRY E. BROWN, JR., South Carolina 

TIMOTHY V. JOHNSON, Illinois 

TODD RUSSELL PLATTS, Pennsylvania 

SAM GRAVES, Missouri 

BILL SHUSTER, Pennsylvania 

JOHN BOOZMAN, Arkansas 

SHELLEY MOORE CAPITO, West Virginia 

JIM GERLACH, Pennsylvania 

MARIO DIAZ-BALART, Florida 

CHARLES W. DENT, Pennsylvania 

TED POE, Texas 

DAVID G. REICHERT, Washington 

CONNIE MACK, Florida 

JOHN R. ‘RANDY’ KUHL, JR., New York 

LYNN A WESTMORELAND, Georgia 

CHARLES W. BOUSTANY, JR., Louisiana 

JEAN SCHMIDT, Ohio 

CANDICE S. MILLER, Michigan 

THELMA D. DRAKE, Virginia 

MARY FALLIN, Oklahoma 

VERN BUCHANAN, Florida 

(II)

SUBCOMMITTEE ON AVIATION

JERRY F. COSTELLO, Illinois, Chairman 

BOB FILNER, California 

LEONARD L. BOSWELL, Iowa 

RICK LARSEN, Washington 

RUSS CARNAHAN, Missouri 

JOHN T. SALAZAR, Colorado 

DANIEL LIPINSKI, Illinois 

NICK LAMPSON, Texas 

ZACHARY T. SPACE, Ohio 

BRUCE L. BRALEY, Iowa 

HARRY E. MITCHELL, Arizona 

JOHN J. HALL, New York 

STEVE KAGEN, Wisconsin 

STEVE COHEN, Tennessee 

NICK J. RAHALL, II, West Virginia 

PETER A. DEFAZIO, Oregon 

ELEANOR HOLMES NORTON, District of 

Columbia 

CORRINE BROWN, Florida 

EDDIE BERNICE JOHNSON, Texas 

JUANITA MILLENDER-MCDONALD, 

California 

ELLEN O. TAUSCHER, California 

TIM HOLDEN, Pennsylvania 

MICHAEL E. CAPUANO, Massachusetts 

DORIS O. MATSUI, California 

MAZIE K. HIRONO, Hawaii 

JAMES L. OBERSTAR, Minnesota 

(Ex Officio) 

THOMAS E. PETRI, Wisconsin 

HOWARD COBLE, North Carolina 

JOHN J. DUNCAN, JR., Tennessee 

VERNON J. EHLERS, Michigan 

STEVEN C. LATOURETTE, Ohio 

FRANK A. LOBIONDO, New Jersey 

JERRY MORAN, Kansas 

ROBIN HAYES, North Carolina 

SAM GRAVES, Missouri 

JOHN BOOZMAN, Arkansas 

SHELLEY MOORE CAPITO, West Virginia 

JIM GERLACH, Pennsylvania 

MARIO DIAZ-BALART, Florida 

CHARLES W. DENT, Pennsylvania 

TED POE, Texas 

DAVID G. REICHERT, Washington 

CONNIE MACK, Florida 

JOHN R. ‘RANDY’ KUHL, JR., New York 

LYNN A WESTMORELAND, Georgia 

MARY FALLIN, Oklahoma 

VERN BUCHANAN, Florida 

JOHN L. MICA, Florida 

(Ex Officio) 

(III)

(V)

CONTENTS Page 

Summary of Subject Matter .................................................................................... vi 

TESTIMONY 

Blakey, Hon. Marion C., Administrator, Federal Aviation Administration, 

U.S. Department of Transportation .................................................................... 15

Dillingham, Gerald L., Ph.D, Director, Physical Infrastructure Issues, U.S. 

Government Accountability Office ...................................................................... 15

Scovel, Hon. Calvin L., III, Inspector General, U.S. Department of Transportation ..................................................................................................................... 15

PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS 

Boswell, Hon. Leonard L., of Iowa ......................................................................... 47

Carnahan, Hon. Russ, of Missouri ......................................................................... 49

Cohen, Hon. Stephen I, of Tennessee .................................................................... 50

Costello, Hon. Jerry F., of Illinois .......................................................................... 51

Matsui, Hon. Doris, of California ........................................................................... 55

Mitchell, Hon. Harry, of Arizona ............................................................................ 57

Oberstar, Hon. James L., of Minnesota ................................................................. 62

Salazar, Hon. John T., of Colorado ........................................................................ 66

PREPARED STATEMENTS SUBMITTED BY WITNESSES 

Blakey, Hon. Marion C. ........................................................................................... 69

Dillingham, Gerald L. ............................................................................................. 85

Scovel, Hon. Calvin L., III ...................................................................................... 106

SUBMISSION FOR THE RECORD 

Dent, Hon. Charles W., a Representative in Congress from Pennsylvania, 

letter to Hon. Marion C. Blakey, Administrator, Federal Aviation Administration, U.S. Department of Transportation, February 14, 2007 ..................... 11

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(1)

THE PRESIDENT’S FY08 FEDERAL AVIATION 

ADMINISTRATION’S BUDGET 

Wednesday, February 14, 2007

HOUSE OF REPRESENTATIVES, COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE, SUBCOMMITTEE ON AVIATION, Washington, DC. 

The committee met, pursuant to call, at 2:00 p.m., in room 2167, 

Rayburn House Office Building, the Honorable Jerry F. Costello 

[chairman of the committee] presiding. 

Mr. COSTELLO. If we can get Jimmy Miller from not talking to 

the witnesses, we can begin this hearing. 

[Laughter.] 

Mr. COSTELLO. Let me first call the Subcommittee hearing to 

order and ask members, staff and everyone here to turn off their 

electronic devices or put them on vibrate, please. I want to welcome 

everyone here today to the first hearing of the Aviation Subcommittee. In particular, I want to congratulate my friend who is 

now the Ranking Member of the Subcommittee, Tom Petri. Mr. 

Petri and I have worked closely together when he chaired the Subcommittee on Highways and he was very good to me in the markup 

process and to our State. We worked closely together in that endeavor and we are going to work very closely together on this Subcommittee. So I welcome my friend, Mr. Petri, as the Ranking 

Member of the Subcommittee. 

Obviously this year is going to be a very busy year for the Subcommittee. We have the FAA reauthorization, as well as a number 

of other issues that are important to me and to other members of 

the Subcommittee concerning a whole host of issues from safety to 

a lot of other things that we will get into in the coming weeks and 

the coming months. I will give my opening statement in just a few 

minutes and I will then call on the Ranking Member, to give his 

opening statement or any comments that he wants to make. 

Then we will give members an opportunity to make an opening 

statement or a comment. I would ask members, in the interest of 

time, to one, consider submitting their statements into the record 

when possible. But I do want to assure every member that you will 

have the opportunity to either give an opening statement or make 

a comment. At this time, I would ask unanimous consent that any 

member wishing to insert their statement into the record in its full 

entirety may be able to do so, and that we keep the record open 

for 30 legislative days to submit comments. 

Hearing no objection, so ordered. 

Mr. MICA. Does that exclude my————

2

Mr. COSTELLO. You know, I thought we were going to get 

through at least the first 10 minutes of the hearing without the 

Ranking Member of the full Committee being here. But welcome to 

my friend from Florida. 

[Laughter.] 

Mr. COSTELLO. Also let me say, before I give my opening statement, I would like to ask unanimous consent that the majority 

members be recognized in order of attendance for questions. What 

we will DO is we will keep a list of members on the majority side 

as they come in. They will be recognized according to when they 

show up. I ask unanimous consent that we recognize members on 

the majority side in that order. Hearing no objection, so ordered. 

I want to welcome everyone to the first hearing of the Aviation 

Subcommittee. Let me say that I am pleased that the Administrator of the FAA is here with us today, Marion Blakey; the new 

Department of Transportation Inspector General, Calvin Scovel, 

and Dr. Gerald Dillingham of the Government Accountability Office. Dr. Dillingham has appeared before this Subcommittee many 

times in the past. 

I would also note that the FAA just released its reauthorization 

proposal this morning, and this Subcommittee will be reviewing 

the details of that proposal in detail in coming hearings in the 

month of March. On March 14th, we will look at the FAA’s reauthorization proposal. On March 21st, we will look at the FAA’s financing proposal. March 22nd, we will have a hearing on the 

FAA’s operational and safety programs. And on March 28th, we 

will look at the FAA’s airport improvement program. 

However, this afternoon, the hearing will focus on the Administration’s proposed budget for the FAA. The Administration’s fiscal 

year 2008 FAA budget request has been received and it has received much attention in the last week, as it proposes to transform 

the FAA’s current excise tax financing system to a cost-based user 

fee system. Under the fiscal year 2008 budget request, and as detailed in the FAA’s reauthorization proposal, FAA’s financing 

sources will shift from a mix of fuel taxes other than excise taxes, 

and a general fund contribution to user fees, fuel taxes and a general fund contribution. This proposal would take effect in 2009. 

As I stated at the outset, the Subcommittee will hold a hearing 

on March 21st to discuss in detail the Administration’s financing 

proposal and its present and future implications. However, I would 

at this time make at least one initial observation about the proposed user fee financing proposal. While the FAA has cited the 

need to finance a major new air traffic control modernization initiative as a reason for reforming the current tax structure, the Administration’s data indicates that in fiscal year 2008, user fees and 

excise taxes under the new proposal would hypothetically yield approximately $600 million less revenue than maintaining the current tax structure, and over $900 million less from fiscal year 2009 

through fiscal year 2012. 

I question the wisdom of moving to a new financing system that 

will not generate as much revenue as the current tax structure 

when we clearly need to make critical investments now to ensure 

that our Nation’s air traffic control infrastructure is robust for the 

future. I also believe that the fiscal year 2008 FAA budget request 

3

falls short in several respects. Facilities and equipment, the capital 

program in 2003, the FAA requested and received from the Congress an authorization of approximately $30 billion per year for its 

capital program. Yet for the past three years, the Administration 

has requested roughly $2.5 billion per year for the capital program. 

For fiscal year 2008, the Administration is once again requesting $2.46 billion for capital spending. The Administration identifies a 

$173 million of its $2.46 billion request, about 7 percent, as being 

directly related to the Next Generation system. 

The Department of Transportation Inspector General has stated 

that the FAA cannot achieve its goals of technologically transforming the national airspace system with $2.5 billion in the F&E 

budget, and that a $2.5 billion funding level goes toward primarily 

sustaining the existing system, not new initiatives. Moreover, the 

Administration’s fiscal year 2008 capital spending request appears 

to be at odds with its own preliminary NGATS F&E cost estimates 

of a little more than $3 billion. 

The airport improvement program. The fiscal year 2008 budget request provides $2.75 billion for the airport improvement program, $950 million less than the level authorized by Vision 100 for 

fiscal year 2007 and $760 million less than the House passed in the 

2007 continuing resolution, H.J. Res. 20. Under the current formula for distributing AIP entitlement funding, virtually every airport that currently receives AIP entitlement in funding will have 

its entitlement reduced. Additionally, small airports might particularly be hard hit by the Administration’s proposed AIP cuts, because AIP grants are a larger source of funding for smaller airports. 

Essential air service. Although it is not an FAA program, the fis- cal year 2008 budget provides only $50 million for the essential air 

service, $77 million less than authorized by Congress, almost $60 

million less tan provide in the House-passed continuing resolution. 

As a result of this dramatic cut, almost half the communities that 

received EAS funding, 73 out of 147, would be dropped from the 

program. 

Staffing. In addition, I am very concerned about future staffing 

levels for the FAA controllers and safety inspector work forces. In 

particular, over the next 10 years, approximately 70 percent of the 

FAA’s nearly 15,000 air traffic controllers will be eligible for retirement. The FAA estimates that it could lose more than 10,300 air 

traffic controllers by the year 2015. The FAA will need to hire approximately 11,800 controllers over the next 10 years to have 

enough recruits in the pipeline to meet the positions lost. 

Although the FAA hired 1,116 controllers in fiscal year 2006, the 

total loss of controllers was higher than the FAA projected. The increase in retirements could be directly attributable to the imposition of the FAA contract on the controllers. In fiscal year 2007, the 

FAA plans to hire more than 1,386 controllers and the fiscal year 

2008 request provides for another 1,420 air traffic controllers. However, hiring new controllers is a complex process and task. Controllers are highly skilled professionals and it takes several years to 

train a controller. 

According to the FAA, the failure rate for controller trainees in 

both the FAA academy and in the ATC facilities is approximately 

4

5 percent and 8 percent respectively. Replacing a controller who retires must begin several years in advance. In addition, the Department of Transportation Inspector General will testify today that 

the FAA controllers workforce plan still has some major shortcomings, including a lack of facility level staffing standards and associated cost implementation. It is imperative that the FAA have 

a feasible plan to hire and train new controllers today. Otherwise, 

we will be left with a system that is woefully short-staffed and unable to accommodate the future demands for air transportation. I 

look forward to hearing more from the Department of Transportation IG in this regard. 

I am also concerned about the potential attrition in the FAA 

safety inspector work force. It is my understanding that over onethird of the FAA safety inspectors will be eligible to retire by the 

year 2010. While the FAA’s fiscal year 2008 request provides for 

hiring an additional 177 safety inspectors over the next two years, 

I am concerned that the FAA does not have an accurate assessment of its staffing needs. 

Last year, the National Research Council reported that the FAA 

lacked staffing standards for inspectors and recommended that the 

FAA undertake a holistic approach to determine its staffing needs. 

In addition, the Department of Transportation IG has noted in the 

past that the rapidly changing aviation environment, from the increased use of outside maintenance vendors to new classes of air 

space users, such as unmanned aerial vehicles and very light jets, 

will place greater demand on the FAA inspector workforce. 

It is imperative that we make these investments in the FAA’s 

workforce now so that they can meet the new challenges for maintaining the highest level of safety in this ever-changing aviation environment. 

With that, I want to again welcome our witnesses here today. I 

look forward to hearing their testimony. And I would recognize the 

Ranking Member, Mr. Petri, now for his opening statement or any 

remarks he would like to make. 

Mr. PETRI. Thank you very much, Chairman Costello. Let me 

begin also by congratulating you on your new assignment. It is a 

big one. This Subcommittee, as I think all the members are aware, 

has a very full plate this Congress. We are determined to work 

with you to make it as productive a session as we possibly can, 

knowing that the Senate also may have something to say about it 

as well as the Administration. 

I would like to thank you for calling this important hearing to 

start off the year. The budget request from the FAA before us sets 

on the course for reauthorization, in which we will examine the request in depth. While we await the details that will help us flesh 

out the agency’s proposal, today we will address the issues raised 

by the President’s budget request for this budget year. 

Among the most complex is the proposal to shift the FAA’s revenue sources from the current assortment of excise taxes to a combination of general aviation fuel taxes and cost-based user fees for 

commercial users intended to better align system cost with system 

usage. With the current tax structure’s expiration date set for September 30th of this year, we have to carefully consider the funding 

5

options available to best provide for the safety and efficiency of the 

Nation’s airspace system. 

Modernization of the national airspace system will be of critical 

importance over the next 10 or 20 years as demand on the system 

grows. For modernization to be successful, development and deployment of cutting edge technologies and performance standards must 

not be delayed. I am interested in hearing about what specific modernization initiatives the Administration proposes for budget year 

2008 and subsequent years. 

To keep pace with rising demand, the FAA must also continue 

to support airport capacity capital projects with the continuation of 

a robust airport improvement program. The President’s budget request of $2.750 billion for the airport improvement program and although this request is some $950 million less than what was authorized for last budget year, I hope you are going to try to figure 

out how to stretch it as best we can. Nonetheless, I am concerned 

about the impact that reduced funding will have on our airports’ 

ability to keep up with capital project needs, particularly at small 

and medium size airports that are unable to rely on sizeable passenger facility charge receipts to complete the needed projects. 

The aviation industry’s safety and efficiency is not only achieved 

by technology and funding, but also by the highly trained safety inspectors and air traffic controllers. As we move forward with the 

budget and with reauthorization, we must be sure to provide adequate funding for these critical elements of the FAA’s safety oversight mission. I am pleased that its budget proposal addresses the 

coming wave of workforce retirements and supports a hiring plan 

that will keep pace with expected attrition. 

I would like to thank Administrator Blakey for being with us 

today, as well as the other witnesses from the GAO and Inspector 

General’s office, and look forward to your testimony. 

Mr. COSTELLO. I thank the Ranking Member for his opening 

statement and comments. At this time, under the five minute rule, 

we would recognize the gentleman from Colorado, Mr. Salazar. 

Mr. SALAZAR. Thank you, Mr. Chairman. I want to thank the 

witnesses for coming here today, and thank you for holding this important hearing. 

I want to associate my comments with yours, Mr. Chairman, as 

well. And I will keep my comments brief. I will submit my full 

statement for the record. 

But there are several things that are of concern to me. One, of 

course, is the user fee issue, and how it would basically cut the receipts down to $11.5 billion. I would like the FAA, or the Administrator, to actually give us a justification for this net loss of $600 

million, if there is a great need for funding today, why should we 

want to go to a new structure that basically reduces the investment 

in our Nation’s air transportation system? 

And of course, something that is very near and dear to my heart, 

in Colorado there are three essential air service airports. All three 

of them are in the Third Congressional District, my district in Colorado. I would like to understand or have an explanation made to 

me as to what justification is being used, what formula are you 

using to cut almost half of the funding for the EAS program. Is it 

going to be cut? Is it going to be straight across the board, or are 

6

there going to be certain airports that are going to be cut out of 

the program? 

Many of us are from rural communities. And the EAS program 

is vital to economic opportunities in rural communities. 

So with that, Mr. Chairman, I will yield back and I look forward 

to the witnesses’ testimony today. Thank you. 

Mr. COSTELLO. I thank the gentleman. 

At this time I will recognize, first let me congratulate, it is my 

first opportunity publicly to congratulate the former chairman of 

this Subcommittee, who is now the Ranking Member of the full 

Committee. We worked very closely together in our prior positions 

and I remember at one of our last hearings, one of the witnesses 

said something, and you said, well, I hope as we come back next 

year, and I said, Mr. Chairman, I hope you’re sitting in my chair 

and I am sitting in your chair. Well, I am sitting in your chair, but 

you are elevated now to be the Ranking Member of the full Committee. And I congratulate you and recognize you at this time. 

Mr. MICA. Thank you, Mr. Costello. There are a lot of new faces 

in Congress, but you never know where you are going to end up 

in the system, in this great institution. I came here as a freshman 

member and Mr. Oberstar was the chairman of Aviation some 14 

years ago. And then for six years I did get to chair that, and several of the past years, of course I had DeFazio for several years, 

God gave me him for a while. 

[Laughter.] 

Mr. MICA. Then I was blessed—is he here? OK, there he is. Any 

time you can withstand that long with Mr. DeFazio, you have a 

special elevation to sainthood in the next life. 

[Laughter.] 

Mr. MICA. A great working relationship with Peter, just kidding. 

And of course, you couldn’t ask for anyone better to have as a 

friend. I have known our new Chairman and his wife, Georgia, 

since I think first coming here. So we are very proud of you and 

know you will do a great job. 

I had a few comments, though, that I did want to make. Because 

this is a very important hearing, and again, we have spent a lot 

of time on aviation in the past with some of these members, as I 

said. We do have a bit of a challenge ahead of us. As you know, 

the fees and taxes that fund FAA expire on September 30th, 2007. 

And I think it is critical to sustaining our current system, which 

has had a great safety record. But it is starting to get stretched a 

bit at the seams. We look for reauthorization, we look for a good 

way to finance that system, keeping it safe and keep us in business 

and our economy and aviation industry on the move. 

I do want to say first of all, I support the attempts of the Administration and FAA to revisit the whole way we are financing the 

aviation system. To move to a hybrid system I think is important, 

with some reliance on fuel taxes for general aviation and a cost 

based user fee system for commercial aviation users. One of the 

challenges we have, and I brought my little model today, I always 

have to have a model, but we have to look too at how we are now 

funding the system. Most of you know 7.5 percent ticket tax is really the way we fund this. 

7

So this airplane, commercial passenger aircraft, actually contributes, and our flying public today, contributes most of the money to 

fund the system. And is that truly fair? We have to ask some questions. Because I think we have about 7,000 of these aircraft, then 

we have about 16,000 jets and other craft that only carry maybe 

a few folks, but take up the same time and space. And how they 

pay their fair share is very important to the system. 

So we have to find the fairest way possible. I think the hybrid 

approach is very good. 

I do have some questions about the Administration’s budget re- quest, it provides $2.7 billion for the AIP, the airport improvement 

program in 2008. That is $950 million less than the level authorized in Vision 100. I have some concerns there. 

I do support also, some of you know me, I am a right wing, notax kind of guy. I do support, however, increasing the PFC and providing our airports with some flexibility with which to use those 

funds. The airlines, commercial airlines, have increased their fares 

over about a 12 month period about 16 times, is what I am told. 

But we need to find a way to increase the money to support the 

infrastructure that also supports these passenger aircraft. 

So the final thing I will close on is, I commented at the beginning, we have a safe system and we need to keep it that way. I 

want assurance from FAA that in this new funding that we don’t 

divert any of the funds necessary to keep the system safe, that we 

have safety inspectors and that we start moving to the next generation of air traffic control. We go from human to human, to data 

to data systems, which is expensive. They have, I think, a multibillion dollar bonding proposal in here, which I look favorably upon, 

and other means of paying for that next generation system. But we 

have to make certain that again, we do not compromise safety. 

Thank you, Mr. Chairman. 

Mr. COSTELLO. Thank you. 

We now recognize for five minutes the gentleman from Arizona, 

Mr. Mitchell. 

Mr. MITCHELL. Thank you, Mr. Chairman. 

As we examine the President’s FAA budget proposal, I want to 

express my concern about a couple of issues. First and foremost, I 

want to express my concern about safety. According to the FAA, 

over the next 10 years, 70 percent of its air traffic controllers will 

become eligible to retire. We need to make sure that FAA has the 

resources it takes to recruit, train and maintain controllers to replace those retirees and to keep the public flying safely. 

Second, I want to express my concern about efficiency. Last 

week’s Washington Post reported some sobering statistics. According to the paper, airlines’ on-time performance dropped for the fifth 

year in a row in 2006, with one in four flights arriving late or not 

at all, according to the data released yesterday by the Bureau of 

Transportation Statistics. It goes on to say, the airlines also mishandled a massive amount of luggage, 4 million bags, or 6.7 for 

every 1,000 passengers, and it is the industry’s worst rating since 

1990. We can do better. 

Lastly, I am concerned about airport maintenance and growth. 

The President’s budget seeks a 21.7 percent cut in the airport improvement program, which funds capital improvements at commerVerDate 0ct 09 2002 16:46 Aug 10, 2007 Jkt 000000 PO 00000 Frm 00023 Fmt 6633 Sfmt 6633 P:\DOCS\34781.TXT HTRANS1 PsN: JASON
8

cial airports. This program funds everything from runway and taxiway improvements to noise abatement projects. Noise abatement is 

critically important to communities that surround Sky Harbor Airport in my district, an airport which serves as a hub for its Tempebased U.S. Airways. Sky Harbor has requested more than $10 million for noise abatement projects in fiscal year 2008. A drastic cut 

to the airport improvement program could put this funding at risk. 

I encourage my colleagues to keep this issues in mind as they 

consider the FAA’s budget request. I thank you, Mr. Chairman, 

and I yield back my time. 

Mr. COSTELLO. I thank you. 

At this time, we recognize Mr. Hayes for five minutes. 

Mr. HAYES. Thank you, Mr. Chairman. Thank you and welcome, 

Mr. Dillingham, Mr. Scovel. We have been friends for years. 

I have looked at the proposal. There is no way that I can come 

to the conclusion that this user fee approach to funding the next 

generation is fair, equitable or is going to work. I would simply ask 

that the FAA and others sit down with those of us, and a number 

of have spoken already, who are pilots, who have some concept of 

what the proposals are going to do. At the same table I would love 

to see the controllers and folks from the FAA sit down and really 

look at hands-on, nuts and bolts, here is the good stuff, here is 

where you can save money, we need this, we don’t need that, and 

really come up with something other than absolutely deadly user 

fee, huge tax on gas. 

So with all due respect, I again welcome you here, and look forward to that opportunity. I think Sam and Mr. Salazar and others, 

Leonard, can bring some wisdom to the table. And let’s bring 

NATCA to the table and hear what they are saying as well. 

Thank you very much. I yield back. 

Mr. COSTELLO. I thank the gentleman. And at this time for five 

minutes we recognize Mr. Lampson from Texas. 

Mr. LAMPSON. Thank you, Mr. Chairman. I appreciate the opportunity for just a minute or so. First let me say thanks to you and 

to Ranking Member Petri for the leadership on this particular 

hearing. I am looking forward to the comments that are being 

made. 

Our Nation’s aviation system faces some daunting challenges. 

This Committee and this Congress must rise to the occasion in 

helping to craft policy that will deliver a sustainable aviation infrastructure. Southeast Texas faces many of the same challenges 

other major cities and areas of the United States face. We are rapidly changing, rapidly increasing the volume of passengers and 

commercial aviation. I am concerned that the current level of infrastructure will not be sufficient to sustain the growth if we don’t act 

preemptively. 

I am pleased that Congress and our Federal agencies have continued to explore solutions to both near-term and long-term issues, 

bringing public and private organizations together in forums such 

as the Next Generation Air Transportation System. As we move 

closer to the Federal Aviation Administration reauthorization, 

which this Committee will soon consider, we must focus on smart 

growth, planning for future congestion mitigation, ensuring that 

our air traffic control systems remain viable and providing suffiVerDate 0ct 09 2002 16:46 Aug 10, 2007 Jkt 000000 PO 00000 Frm 00024 Fmt 6633 Sfmt 6633 P:\DOCS\34781.TXT HTRANS1 PsN: JASON
9

cient resources to grow our aviation infrastructure to the necessary 

levels. 

I firmly believe that a congested and inefficient system hampers 

economic prosperity and productivity. I look forward to working 

with the Chairman and the Ranking Member as well as the Administration to ensure we are both crafting policies that make 

sense and providing adequate funding to secure the viability of our 

aviation infrastructure. 

I thank you, Mr. Chairman, and I yield back the balance of my 

time. 

Mr. COSTELLO. I thank the gentleman. 

Mr. Coble. 

Mr. COBLE. Thank you, Mr. Chairman. I will not consume five 

minutes. I just want to echo what the distinguished Ranking Member said about you and Mr. Petri being in leadership roles on this 

very important subcommittee. I have two other meetings simultaneously, so I may have to leave. I want to welcome the witnesses 

here. 

But I want to mention, Mr. Chairman, I came in late, but I know 

that we are blessed with the presence of at least two very adept 

aviators, the distinguished gentleman from Iowa, Mr. Boswell, the 

distinguished gentleman from North Carolina, Mr. Hayes. At least 

they tell me they are adept aviators, Mr. Chairman, I can’t refute 

that. But I think it is good to have some expertise on the Subcommittee, and I look forward to working with you and Mr. Petri 

this session. I yield back. 

Mr. COSTELLO. Thank you. 

At this time we recognize the gentleman from Iowa, Mr. Boswell. 

Mr. BOSWELL. Thank you, Mr. Chairman. 

I would like to associate myself with the remarks of Mr. Hayes 

and save a little bit of time for witnesses. Ms. Blakey, I too appreciate very much, in spite of the fact that we are not in agreement 

with what you are proposing, we think you are sincere in what you 

are trying to do and we appreciate your doing it. But I think you 

have heard a very sincere plea, let’s sit down together. I want to 

join with that, I think it must be done. I think we would get a lot 

more done if we work together than if we just bump heads. 

So we respect you and ask that you might respect us, and let’s 

see if we can work it out. I am pleased that we are this session 

and process. I just don’t see how we can’t continue the functions 

that we have to do with our present funding mechanism, we can 

do it. So as has been stated, I am a user of the system, not as much 

as some, but I do use it and appreciate it and I feel comfortable 

using it. We have some real pros sitting behind those screens and 

safely moving us across some very busy skies at times. 

So I would hope that you do that, I again associate myself with 

Mr. Hayes and others. I think this is an unfair approach and an 

unwise approach, and I don’t think we have to do it. So I would 

hope that this discussion would open the door and take us to a 

point where we can figure out what we can do and we all understand it and work at it together. With that, Mr. Chairman, I yield 

back. 

Mr. COSTELLO. Thank you. 

10

At this time the Chair would recognize for five minutes Mr. 

Dent. 

Mr. DENT. Thank you, Mr. Chairman. 

I have some questions about a specific issue in my district that 

I will submit for the record, with your approval. With that, I will 

yield back the balance of my time. 

[Mr. Dent’s letter to Administrator Blakey follows:]

11


34781.012
12


34781.013
13

Mr. COSTELLO. I thank the gentleman. 

At this time I would recognize Ms. Norton for five minutes. 

Ms. NORTON. I thank you very much, Mr. Chairman, and I thank 

the Administrator and her staff for appearing. 

I note that you have heard from Mr. Boswell, who uses this airport. There are a number of members who fly. This Committee had 

to take quite extraordinary action in order to open small plane and 

charter service at Ronald Reagan National Airport. It was a disgrace that although the Committee was clear, for about three 

years, that with small plane service up everywhere, including almost immediately in New York after 9/11, there was no excuse for 

the Government and the Administration, recognizing that there 

were other parts of the Administration involved, to ignore the clear 

wishes of this Committee that service be resumed as well at Ronald 

Reagan National Airport. 

It took a specific piece of legislation, passed by this Subcommittee, and only when Chairman Young threatened to hold officials in contempt did a plan come forward that finally opened the 

service at Ronald Reagan for small planes. This Committee could 

not be more cognizant of what the responsibility was and how difficult it was. But it certainly made the greatest power in the 

United States look small, that we could not open part of the airport 

for our own capital. 

And when it was opened, and here is my complaint, Madam Administrator, the trappings that surround the ability to fly into this 

airport are unworthy of the United States, where people had to 

come armed on small planes, and a whole set of paraphernalia and 

extra expense that in effect dis-invited such planes to land in the 

capital of the United States. Because I will not be here for the entire testimony, I want to go on record again to say that I hope that 

you will work with others in the Administration to normalize service for small planes in the Nation’s capital, so that it does not become almost impossible to travel to the Nation’s capital, not only 

a major region because our capital is located here, but because this 

is one of the great economic engines of our Country. 

So I ask you to give your concerted attention to relieving the burdens that attach to flying in with small plane service to Ronald 

Reagan National Airport. 

Thank you, Mr. Chairman. 

Mr. HAYES. Will the gentlelady yield? 

Ms. NORTON. I will be pleased to yield. 

Mr. HAYES. I appreciate your remarks, you are absolutely on target. I would be happy, along with Mr. Graves, Mr. Boswell and others, it is not the FAA’s fault alone. I have asked the Secret Service 

to revisit, TSA needs to revisit. I am sure you will, and Ms. Blakey 

will help us get the folks back to the table and get away from ‘‘it’s 

not us, it’s them,’’ make sure they all come to the meeting. 

But Ronald Reagan, except in a technical sense, is not open to 

general aviation this day. On paper, yes, but try to do it, you won’t. 

Thank you. 

Ms. NORTON. I thank the gentleman for his remarks, and I yield 

back the balance of my time. 

Mr. COSTELLO. I thank you. 

14

The Chair would propose that we recognize one more member on 

this side of the aisle and then move to the witnesses, if there are 

no objections. At this time, we would recognize Mr. Graves for five 

minutes. 

Mr. GRAVES. Thank you, Mr. Chairman, add thank you, Administrator Blakey, for coming in. You have always been a pleasure to 

work with and easy to work with. You are always responsive whenever we call. 

I have to tell you, I am terribly disturbed by this proposal. I kind 

of went through the process and figured up, and I know we are depleting the aviation trust fund. But revenues into the aviation trust 

fund are actually increasing. We are trying to fund a system, I 

know it is a next generation system, we are going to make the 

skies safer. 

So I kind of put all this into perspective, and I realize, too, that 

we haven’t figured out what that system is yet and we don’t know 

when we are going to implement it. We don’t know how much it 

is going to cost. So I think, well, we are going to build up the fund, 

we are going to try to build it up in advance of that point. 

So I am sitting here, and we first got word of the proposal two 

weeks ago, I think, or last week. My staff person walks into my office, and I know there is going to be a gas tax hike, so I am bracing 

myself. I know it is 21 cents, just a little less than 21 cents now. 

I am thinking, maybe it is going to go up a nickel, you know, 29 

cents. And my gosh, I hear 70 cents and it just floors me. I don’t 

even know where to begin. I don’t even know where to talk about 

that, and I can’t even tell my pilots back home about this, because 

I am going to get pelted the minute I say it. 

And then to know that the fact that this is open-ended, and it 

is indexed for inflation, and there are so many other broad proposals out there that we are not even sure about that are to be determined later, it really, really disturbs me. Then I have to ask, 

and I have talked to a couple of my pilots about this, and the question they have is, what do I get for that? Obviously, I know the airport improvement program is a part of this. The proposal is to 

eliminate the standard rate for the States that do use that. 

But again, the airport improvement program is in there, so they 

are getting something for that. But next generation air traffic control system, these guys are out there flying in Class D air space 

and Class E air space and whatever the case may be, they are just 

not a burden on the system, they are not using the system, and 

they want to know what they are getting for this incredible increase. 

Then I had another pilot tell me, and he was exactly right, this 

is going to make the skies safer because nobody is going to be able 

to fly any more except the commercial carriers. They can’t afford 

it. It is a 300 percent increase in aviation fuel. 

I know everybody has to do their part and be a part of this. But 

I am truly at a loss. I don’t know where to start. I understand that 

we come in with the negotiation process and we start at one end 

and the other side starts at the other end and we try to find our 

way to the middle. But even the middle is unheard of, at least in 

my opinion. 

15

I don’t know what to do. I am truly at a loss. I am bothered. I 

am flustered. I don’t even know where to begin. 

I vented in the full Committee last week, and now, since I have 

seen the proposal, I am venting even more. I have a lot of pilots 

out there that I have to represent, and a lot of folks out there that 

depend on aviation, they have small businesses that cater to general aviation, they relate indirectly—there is just a lot of people out 

there that their livelihood hangs on this proposal. I don’t see anything but bad news for everybody. I don’t see how anybody can afford to fly with that kind of an increase. It is not going to stop 

there, it will be indexed and it will go up. And we all know it is 

going to go up. 

Mr. EHLERS. Will the gentleman yield? 

Mr. GRAVES. Yes. 

Mr. EHLERS. Thank you very much. 

First of all, I want to comment, you are also an adept pilot, and 

we have to add you to the list of adept pilots here, and we appreciate your input. But in terms of your question, where do we start, 

I have a suggestion. I think the proposal that has been formed is 

dead on arrival. We can all save a lot of time, instead of arguing 

about that, getting a working group together from this Committee, 

a working group together from the FAA and explore the possibilities. I don’t think there is any other branch of the Federal Government that is in such need of coherent, long-term planning as the 

aviation sector. They simply cannot make moves quickly. As you 

well know, the Congress doesn’t make moves quickly. 

But we have to sit down and talk about the next 20 years of 

aviation sector and the only way to do it is to get some people from 

the Congress, some people from the FAA sitting down and trying 

to work on the long-range picture, rather than having the FAA 

come up with proposals we shoot down, they come up with others 

we shoot down, I think this is so important to the Nation that we 

really have to sit down and thresh it out together in some informal 

manner and come up with some ideas. 

I appreciate the comments that you made, and I yield back. 

Mr. GRAVES. Thank you, Mr. Chairman. 

I am glad it is you, Administrator, because I would have lost my 

temper if it hadn’t been you. I hope you understand what I am saying. Thank you. 

Mr. COSTELLO. I thank the gentleman, and would like to move 

on to our witnesses. Again, we welcome you here this afternoon. 

We would ask all of you to summarize your testimony in a five 

minute period if possible, so that we can move on to questions. The 

Chair would recognize the Administrator, Ms. Blakey. 

TESTIMONY OF THE HONORABLE MARION C. BLAKEY, ADMINISTRATOR, FEDERAL AVIATION ADMINISTRATION, U.S. DEPARTMENT OF TRANSPORTATION; GERALD L. DILLINGHAM, 

Ph.D, DIRECTOR, PHYSICAL INFRASTRUCTURE ISSUES, U.S. 

GOVERNMENT ACCOUNTABILITY OFFICE; THE HONORABLE 

CALVIN L. SCOVEL, III, INSPECTOR GENERAL, U.S. DEPARTMENT OF TRANSPORTATION 

Ms. BLAKEY. Good afternoon, and thank you, Chairman Costello. 

It is a true honor and a privilege to address you, Congressman 

16

Petri and the Members of this Subcommittee. This is the first time 

that I am appearing before the 110th Congress. Let me say that 

I am really looking forward to working with all of you, and certainly with the aviators, the pilots on this Committee. We are very 

lucky to have so many people who know aviation first-hand. I am 

very pleased about that, and do look forward to the discussions 

that we are going to have, because it will be a very busy year. 

I will tell you that my statement today is focused on the issue 

of the 2008 budget, as that was the topic of the hearing. And of 

course, we did not know whether the timing would be coincident, 

as it is, with the Administration submitting the new financing reform legislation, which we submitted to Congress this morning. 

However, I am very happy to address some of the concerns and 

issues that a number of you have raised in your opening statements as we go forward. My statement will focus on the budget. 

The final thought I might have also is that a number of concerns 

were expressed, such as concerns about essential air service and 

the security requirements for general aviation at Reagan, which do 

fall outside the FAA’s purview. They fall outside of our authority. 

So I would caution about that fact as well, although it is helpful, 

certainly, to hear the concerns. 

Let me just start with noting something that I think we all can 

take a great deal of credit for, and that is that this is the safest 

period in the history of aviation. I believe the President’s 2008 

budget provides the framework to keep it that way. We believe 

strongly that the budget and the reauthorization proposal released 

this week are how we are going to reach the Next Generation Air 

Transportation System. We believe that the current financing 

structure will make it extremely difficult to get there. 

As you are aware, the 2008 budget is structurally very different 

from previous years. It supports changes in our financing and these 

in turn support the development and the launch of NextGen. In a 

nutshell, the new financing system will allow the FAA to operate 

in a more businesslike fashion, with the ability to make long-term 

plans and investments that won’t be tripped up by the fluctuations 

in ticket prices and the other changes that occur in the shape of 

the aviation industry that aren’t related to our workload at all. Of 

course, here I am referring to things like the increase in the number of small planes, the regional jets, the VLJs, and all of the various other changes that are happening in the system that really 

don’t have to do with the change in our workload. 

Frankly, the plan to tie FAA revenues to the price of a ticket has 

long outlived its usefulness. The creators of the Airport and Airway 

Trust Fund had no way of anticipating the bumpy economic road 

ahead or that airlines would shift to smaller planes in an attempt 

to stay competitive in business. The new reauthorization proposal 

suggests a hybrid funding system that distributes more fairly and 

equitably the cost to operate the system. The airlines, passengers 

and other commercial users pay the lion’s share of taxes today. 

They pay more than 95 percent, while accounting for less than 73 

percent of the air traffic system’s cost. 

High end general aviation aircraft impose similar costs on the 

FAA in the en route high altitude environment, but they currently 

17

pay far less into the system than commercial users for comparable 

flights. The new funding mechanism addresses this inequity. 

The Administration’s proposal respects not only the concerns of 

people flying the planes, but the taxpayers flying in them as well. 

Turbine commercial flights will pay their fair share of the cost 

through user fees. But we have listened very closely to the general 

aviation community. And general aviation flights will pay their fair 

share through fuel taxes. This is a hybrid system, and we believe 

it strikes the right balance. 

The general fund will finance the cost of services provided to the 

public and programs that are in the public’s interest, such as safety 

regulation, air traffic costs driven by the military and air ambulances, and flight service stations. And we are going to replace the 

ticket tax and four other aviation excise taxes, which further tie 

our costs to our revenue. That equals fewer taxes added on the cost 

of a passenger’s ticket. 

This is all crucial to the success of NextGen. But let me turn 

quickly to the 2008 budget because the 2008 budget fully funds the 

next step in technology, ADS-B. This satellite-based aviation system is designed to increase safety, capacity and efficiency. Even as 

ADS-B is the future, its capabilities are already being demonstrated. ADS-B provides automatic broadcast of aircraft position, 

altitude and velocity, and simply put, it offers both pilots and controller enhanced visibility, not just in the air but on the ground as 

well. 

The budget also fully funds another innovation: System-Wide Information Management, SWIM. This is an aviation internet, essentially, with the ability to move information within the FAA and to 

other Government agencies faster, better, cheaper. Much like the 

World Wide Web revolutionized American commerce, SWIM lays 

the aviation information superhighway. It is going to lead to dramatic improvements in air transportation, safety, security and capacity. 

Let me touch quickly on two other aspects of this, because our 

budget request for the new safety and operations account is $1.9 

billion. This level supports increasing the 2006 actual onboard AVS 

safety work force by 177 inspectors and 173 other safety staff. Our 

budget request for the new ATO account is $9.3 billion and calls 

for the hiring of 1,420 controllers. By year-end, we expect to have 

14,951 controllers onboard, and 4,045 inspectors as well. 

Our airports remain the primary focus in the 2008 budget, also 

a primary area of focus. The budget request of $2.75 billion with 

our proposed programmatic changes for the Airport Improvement 

Program will enhance capacity, security, safety, and environmental 

mitigation. The budget also boosts capacity with a request of $3.6 

billion. As you know, we bolstered capacity with Domestic Reduced 

Vertical Separation Minimum, DRVSM. This effort adds six additional lanes for flight at cruise altitudes, increasing capacity by exponential factors. It is going to save the airlines $5.3 billion in fuel. 

And we see that just going up as the cost of fuel, the price of a barrel of oil goes up as well. 

We are also enhancing our air traffic control over the ocean with 

ATOP, Advanced Technologies in Oceanic Procedures. This covers 

the Atlantic, 24 million square miles of air space. And we see the 

18

airlines again saving 6.5 million pounds of fuel, that is about $8 

million a year. 

I could talk a bit more about other important aspects of this. 

RNP, Required Navigation Performance, which allows pilots to 

take advantage of satellite technology to fly a much more precise 

flight path into an airport, and tell you that we are going to be advancing this rapidly with this budget. We plan to publish at least 

25 RNP approaches this year, including 10 in Atlanta in May. 

These are huge advances. 

What is without doubt, though, is that NextGen is a necessary 

step that we have to take without delay. As the system continues 

to experience an influx of smaller, newer jets, microjets, air taxis, 

it becomes more and more clear that we can no longer rely on yesterday’s technology to keep things moving. Without the Next Generation Air Transportation System, we will all be looking back at 

the summers of 2000 and 2006 as the good old days. The tarmac 

is where you are supposed to get ready to take off. It is not supposed to be a holding tank. 

Our 2008 budget and the new reform proposal ensures a smooth 

takeoff and a terrific trajectory to the NextGen. Thank you very 

much. 

Mr. COSTELLO. Thank you, Administrator Blakey. 

At this time we would recognize Dr. Dillingham. 

Mr. DILLINGHAM. Thank you, Chairman Costello, Mr. Petri, Mr. 

Duncan, members of the Subcommittee. 

I believe that we all here agree that the U.S. has one of the 

safest air transportation systems in the world. It is, however, a system under strain. In 2006, one in four flights arrived late, matching the record delays of 2000. And in the next ten years, demand 

for air travel is expected to increase by over 300 million passengers. Furthermore, the consensus of opinion is that the current 

ATC system cannot be expanded to meet the forecasted traffic demands. 

Mr. Chairman, my testimony today will identify some of the 

progress FAA has made in two broad areas as it attempts to address this growing capacity problem, as well as some of the challenges that will need to be addressed in the 2008 budget year and 

beyond. I will focus specifically on FAA’s progress and challenges 

related to ensuring the continued safe and efficient operations 

within the national airspace system and FAA’s progress and challenges in managing the development of the current ATC system, 

while leading the transition to the next generation. 

I will also briefly discuss the importance of a timely reauthorization. 

First, with regard to system safety. In the current system, and 

certainly as the system has expanded to meet demand, it is unlikely that FAA will have enough resources to directly oversee 

every aspect of aviation safety. FAA has determined that it can 

best achieve its safety mission by using risk-based, data-driven 

safety programs. GAO agrees that this is a rational approach for 

monitoring safety. 

However, for this approach to be effective, FAA must have accurate and complete safety related data. FAA has made progress in 

this area, but as examples in our written testimony show, problems 

19

with the quality and availability of data continue to negatively affect its ability to achieve its safety program goals. 

Another challenge to meeting this goal is FAA’s ability to hire, 

train and deploy its primary safety workforce of inspectors and air 

traffic controllers. For example, FAA plans to more than double the 

number of air carriers in its risk-based air carrier safety oversight 

program. This will result in significant workload shifts for its inspector workforce. Actions such as these make it critical that FAA 

improve its safety inspector staffing process, including the development of a staffing model. 

In addition, FAA’s ability to replace as many as 10,000 air traffic 

controllers or about 70 percent of its controller workforce over the 

next 10 years, will also need to be monitored closely. In recent 

years, controllers have been retiring faster than FAA anticipated, 

thereby exacerbating this hiring challenge. 

With regard to the management of the current ATC modernization program and transitioning to NextGen, the implementation of 

several GAO recommendations and best practices from the private 

sector has led to significant improvements in the outcome of FAA’s 

acquisition and oversight processes for major ATC acquisitions. As 

a result, for the first time, FAA has reported meeting its acquisition cost and schedule goals for major systems in each of the last 

three years. 

Another outcome in this area was the establishment of an agency-wide cost savings and cost avoidance initiative, which resulted 

in a total of nearly $100 million in cost savings for the last two fiscal years. 

In regard to the transition to NextGen, FAA and JPDO are working toward a single plan for modernizing the air traffic system 

under its operational evolution partnership. The principal challenges for FAA in this area are institutionalization and integration. 

By institutionalization, it means doing what is necessary to maintain and improve on the culture transformation that has been initiated at the agency. Research shows that this kind of cultural 

change takes about five to seven years, and requires sustained 

leadership to take a firm hold in the organization. 

ATO has been in place a little over three years. And the tenure 

of FAA’s principal cultural change leaders, Administrator Blakey 

and the COO of the air traffic organization, are drawing to a close. 

FAA will also be challenged to obtain Congressional support for 

controversial cost savings and efficiency measures, such as additional facility closings and consolidations. 

The integration challenge is the effort that will be necessary for 

an efficient and cost-effective transition of the current ATC program with JPDO and NextGen. Some key elements of this challenge include working with JPDO, airlines and Congress to complete a valid consensus cost estimate and funding method for 

NextGen. A time-critical part of the funding challenge is how to replace funds for research and development that were previously 

thought to be coming from NASA. Another element of this challenge is that FAA will need to determine whether it has the technical and contract management expertise that will be required to 

implement NextGen. The next generation air transportation system 

20

must also include adequate airport infrastructure to meet the forecasted air traffic demands. 

In the 2008 budget proposal, the Administration has proposed reducing funding for the airport improvement program and changing 

the allocation formula. Other changes being considered by FAA, 

such as adjustments to the passenger facility charges, could increase available funds for airport development. The net effect of all 

these changes on the amount of funding available for airport development is uncertain. 

Mr. Chairman and members of the Subcommittee, my final point 

this afternoon is with regard to the completion of FAA and trust 

fund reauthorization. As you know, 80 percent of FAA’s budget is 

funded from the Aviation and Airway Trust Fund. That authorization expires September 30th, 2007. FAA estimates that the tax 

lapses in 1996–1997 cost the trust fund about $5 billion in revenues. Additionally, since the uncommitted balance of the trust fund 

is at one of its lowest points, there is very little cushion to absorb 

any lapse. It is very critical that the reauthorization take place in 

a timely fashion. 

Thank you, Mr. Chairman. 

Mr. COSTELLO. Thank you, Dr. Dillingham. 

Inspector General Scovel. 

Mr. SCOVEL. Chairman Costello, Ranking Member Petri, members of the Subcommittee, I appreciate the opportunity to testify 

this afternoon regarding FAA’s fiscal year 2008 budget request. 

The U.S. operates the safest and most complex air transportation 

system in the world. In 2006, FAA facilities that manage high altitude traffic handled 46 million operations. This level of activity approximates levels in 2000, when air travel was at its peak. Safety 

is and must remain FAA’s number one priority. Notwithstanding a 

very impressive safety record, the August 2006 ComAir flight 5191 

accident serves as a reminder that we all must work together to 

make a safe system even safer. 

Our testimony today will focus on the key issues that will frame 

FAA’s financial requirements over the next several years. Clarifying those requirements early this session is important, as Vision 

100 and the current ticket taxes expire and Congress and the Administration begin deliberations regarding the next FAA reauthorization. FAA’s $14.1 billion budget request is presented in a new 

format and structure that mirror its plans to reform how FAA is 

financed. Currently, FAA is financed by excise taxes and the general fund. We understand that FAA’s reauthorization proposal will 

be the subject of another series of hearings. 

An important message of our testimony, Mr. Chairman, is that 

regardless of the funding mechanism ultimately decided by Congress, a number of front and center issues require attention and 

will shape FAA’s requirements over the next several years. These 

include the following. One, addressing the expected surge in air 

traffic controller retirements. Last Friday, we issued the results of 

our review of FAA’s progress in implementing its controller workforce plan as directed by Congress. The plan details FAA’s strategy 

for hiring approximately 11,800 new controllers to replace those expected to leave over the next 10 years. 

21

Overall, we found that FAA continues to make progress in implementing a comprehensive staffing plan. For example, FAA has 

made significant improvements in its hiring process and in reducing the time and cost to train new controllers. Further progress, 

however, is needed in several key areas. First, FAA is in the process of developing accurate, facility-level staffing standards, which 

is a foremost necessity in effectively placing newly hired controllers 

where they will be most needed. Planning by location is critical, because FAA has over 300 terminal and en route air traffic control 

facilities, with significant differences in the types of users they 

serve, the complexity of air space they manage, and the levels of 

air traffic they handle. We recommended, and the agency agreed, 

that FAA report in its next annual update to the plan, progress in 

validating standards, including the number of facilities completed. 

Second, FAA has not identified the estimated total costs associated with the plan. We recommended that FAA develop detailed 

cost estimates so that the agency’s stakeholders clearly understand 

the resources required to execute the plan. This is particularly important, as deliberations begin over FAA’s next reauthorization. 

Two, having sufficient safety inspectors to provide oversight of a 

dynamic aviation industry. While controller staffing represents a 

significant challenge, FAA must not lose sight of safety. Potential 

attrition in its inspector workforce, along with a rapidly changing 

aviation industry, presents FAA with substantial challenges in its 

safety oversight. 

FAA currently has 3,865 inspectors. Over one-third of these in- spectors will be eligible to retire by 2010. FAA is requesting $71 

million more than last year’s request to fund safety-related functions. With this additional funding, FAA plans to hire 203 inspectors. Sir, I will note that yesterday FAA advised us that in view 

of anticipated funding in H.R. 20, it expects to be able to hire an 

additional 87 inspectors, for a total of 290 new hires in fiscal year 

2008. 

FAA will never have an inspection workforce that is large enough 

to oversee all aspects of aviation operations. But it is critical for 

the agency to ensure that its inspectors are located in areas where 

they are most needed. 

The National Research Council recently completed its study of 

FAA’s current methods for allocating inspector resources, and concluded that the agency’s current method is ineffective. FAA must 

develop a reliable staffing model to ensure it has the right number 

of inspectors at the right locations. This is an important watch 

item for this Committee. 

Three, keeping existing modernization efforts on track and reducing risks associated with the Next Generation Air Transportation 

System, or NGATS. FAA is requesting $2.4 billion for capital efforts in 2008. The majority of these funds are for the air traffic organization. FAA is requesting funds for key next generation initiatives, such as automatic dependent surveillance broadcast, commonly referred to as ADSB. At the request of this Subcommittee, 

we are reviewing progress on 18 projects worth about $17 billion. 

Mr. Chairman, I see I have exceeded my time. If I might ask for 

a couple more minutes, I should be able to wrap this up. 

Mr. COSTELLO. Please proceed. 

22

Mr. SCOVEL. Thank you. 

At the request of this Subcommittee, we are reviewing progress 

on 18 projects worth about $17 billion. We are not seeing the massive cost growth and schedule slips with FAA’s major acquisitions 

that we did in the past. However, several projects, such as FAA’s 

telecommunications infrastructure program, are at risk of not 

achieving expected cost savings because of schedule slips and diminishing benefits. 

The overarching question facing FAA’s capital account is how to 

transition to the Next Generation Air Traffic Management System. 

This is one of the most complex efforts that FAA has ever undertaken. We have seen cost estimates suggesting that FAA would 

need $500 million to $1 billion annually over existing planned 

funding levels for the Next Generation system. However, there are 

significant unknowns with respect to requirements for new software, intensive automation systems and data communications. Also 

considerable development will be required to refine concepts. 

In a report done at the request of this Subcommittee, we made 

recommendations aimed at reducing risk with this extraordinarily 

complex effort. These include developing realistic cost estimates, 

quantifying expected benefits and establishing a road map for industry to follow; reviewing ongoing modernization projects and 

making necessary cost, schedule and performance adjustments; and 

developing approaches for risk mitigation and systems integration. 

FAA agreed with our recommendations and we will continue to 

monitor this important effort. 

Finally, using the agency’s cost accounting system to improve operations. Regardless of the financing system Congress decides 

upon, FAA must have an effective cost accounting system. A multibillion dollar operation like FAA must have such a system in order 

to shape decisions and establish priorities. Since 1996, FAA has 

spent over $66 million to implement a cost accounting system 

which now covers all lines of business and captures the annual 

labor costs of substantially all its personnel, the single largest cost 

item for FAA. 

Overall, FAA’s cost accounting system is properly designed to assign costs to the agency’s lines of business and can be used for 

measuring performance. However, FAA must ensure the accuracy 

of financial data in the cost accounting system. 

That concludes my statement, Mr. Chairman. I would be pleased 

to answer any questions you may have. 

Mr. COSTELLO. Thank you very much. 

Administrator Blakey, I have a few questions. Obviously we have 

a number of members still that have questions as well, so if we can 

be as brief as possible in our questions and answers, so that we can 

get as many as possible in the time that we have. 

In my opening statement, I mentioned and will say again that 

in our review of the Administration’s 2008 budget request, the financing proposal would hypothetically yield about $600 million less 

in fiscal year 2008 than maintaining the current tax structure. 

Over the period of 2009 to 2012, it would be about $900 million less 

than the current tax structure. Is that an accurate statement? 

Would you agree that is correct? 

23

Ms. BLAKEY. That is correct under the figures in the President’s 

budget. I am very grateful to you though for raising this, because 

I think it is a matter of some confusion and has been raised by a 

number of Members. I think what is important to understand is 

that the hybrid financing system that we are proposing is cost 

based. The cost that the Congress determines in terms of the appropriations for the various categories of our expenses are what 

will then drive the mechanism to recover those costs. 

The proposal that we put forward has AIP at $2.75 billion. As 

we know, the Congress has chosen historically to set AIP levels at 

a very different figure. The costs that AIP drives will, of course, 

cause us to adjust that figure. And if in fact Congress should 

choose to support AIP at a different level, then the costs will exactly match that. 

Mr. COSTELLO. But aren’t you saying in your cost estimates that 

you need less revenue? 

Ms. BLAKEY. No, we are saying we need the revenue that is proposed in the President’s budget. The President’s budget, of course, 

is addressing the deficit. It is looking at the tremendous demands 

we have on the Federal budget overall. We are trying to be very 

careful, therefore, in the requests we are making. But the proposal 

we have made for the new financing system matches that request. 

Mr. COSTELLO. Well, let me ask another question, then, maybe 

in a different way. If the user fees and excise taxes under your financing proposal would yield less than the current tax structure, 

isn’t it possible, possible that we could finance the next generation 

system under the existing tax structure? Are you unequivocally 

saying that it is not possible? 

Ms. BLAKEY. No, I am not unequivocally saying it is not possible. 

I think we can limp along and at some point get there. 

What I do fear, though, and I think there is a tremendous liability in this, that if we continue with the current financing system, 

which has tremendous variations in the revenue coming in, and 

which has caused real problems in the FAA’s ability to make capital investments over the years, we will hit that point where there 

are a billion passengers somewhere around the year 2014. We will 

be attempting to fund the NextGen, and we will be getting there. 

But unfortunately what will happen is we will hit that wall of 

operators and passengers when we are way too late at that point. 

That is the real problem here. We need the ability to have a costbased system that can match the needs, the revenue, with the 

costs, so that we can, on a dynamic basis, support those capital investments. And they are significant to get to the NextGen on the 

time frame we need to get there. 

Mr. COSTELLO. So I take that as saying that it is possible to get 

there? 

Ms. BLAKEY. If you don’t, if you are not concerned about delays 

and tremendous congestion in the system, and possibly real gridlock when you get out into another five years plus, that is where 

you really hit the problem. I think at that point, those who are trying to fly then will be looking at us and wondering why it was that 

we could not come up with a system for financing what is clearly 

a new and very different system. 

Mr. COSTELLO. Thank you. 

24

Mr. Scovel, you state in your testimony and your office has re- peatedly said that at $2.5 billion in the F&E budget, that there is 

no way to achieve the next generation system, that you would basically be maintaining the current system. Do you still believe that? 

Mr. SCOVEL. Yes, sir, we do. We note that in the fiscal 2008 

budget request, FAA’s request, $2.46 billion for modernization. Of 

that, however, about $2.3 billion is dedicated toward sustainment. 

We think FAA will be hard pressed to sustain the existing system 

and develop NGATS within a $2.4 billion to $2.5 billion capital 

budget. An investment level of $2.5 billion will provide funding for 

ADSB, SWIM and demonstration projects, as FAA has requested 

for the coming fiscal year. But it will not address the automation, 

communication, integration and development efforts as envisioned 

for NGATS by FAA in the JPDO. The numbers we have seen suggest that FAA would need $500 million to $1 billion over the existing capital funding levels of $2.5 

billion beginning in 2009 and for several years thereafter. These estimates are not too far removed, as you know, from the authorized 

levels called for in Vision 100. 

I offer the following cautionary notes, however. First, FAA requirements for new NGATS automation systems are not yet well 

defined. Second, we don’t know the extent to which FAA can successfully leverage R&D efforts from other Government agencies, 

such as NASA and DOD, particularly when some of the information that we have received from NASA indicates that they seem to 

be looking more to basic research in the future, rather than applied. 

As we have stated in our testimony, there are significant adjustments needed for existing programs, such as ERAM and FTI. These 

are existing programs, Mr. Chairman, that must fit within the 

Next General Air Traffic Management System. They will need adjustments; those adjustments may be costly. They serve as platforms for the next generation systems. 

Mr. COSTELLO. Mr. Scovel, if I can ask another question. Your office reported that last year, the FAA prepared a preliminary F&E 

cost estimate for NextGen and shared it with the industry. How 

did the preliminary cost estimates compare to the level of funding 

that the Administration is requesting for fiscal year 2008? 

Mr. SCOVEL. Yes, sir. FAA’s F&E funding request for fiscal year 

2008 is consistent with estimates for currently funded programs 

that we have seen, and includes funds for NGATS demonstration 

projects. However, there is some difference with respect to when 

the increase in funds would be needed. The most recent estimates 

we have seen suggest that FAA will need a $500 million to $1 billion annual plus-up annually for fiscal year 2009 through fiscal 

year 2012 to fund NGATs over the current capital investment, as 

I mentioned. 

Earlier estimates shared with industry in the April 2006 time 

frame are in the same range, but suggested that significant increases would begin in 2008. Critical decisions are needed in the 

near future that will impact how quickly those new capabilities 

may be deployed. These decisions include establishing requirements for ERAM software releases, investment decisions on sustaining existing radars and incorporation of weather information. 

25

Mr. COSTELLO. Thank you. 

Dr. Dillingham, I have a few questions for you as well and a couple of other questions concerning your work with the air traffic controllers and other things. I will come back to that in a second 

round. I want to be able to get to other members. 

Let me recognize the Ranking Member, Mr. Petri, at this time. 

Mr. PETRI. Thank you, Mr. Chairman. I have a couple of questions for this round, too. 

Administrator Blakey, could you discuss the Administration’s 

cost allocation study some, particularly in relationship to its assessment of whether commercial aviation is paying its full share, more 

than its share or less than its full share of the existing trust fund? 

Could you explain the situation? 

Ms. BLAKEY. Certainly, I would be happy to. The FAA of course 

at this point does have, as our other witnesses have noted, a very 

sophisticated cost accounting system. We have worked with this 

Congress for a number of years to put that in place, and it is one 

of the finest anywhere. It certainly is one of the finest in Government. 

So we are very acutely aware, therefore, of the costs in the system, and we have very accurate activity data. We have worked 

with Price-Waterhouse Coopers and other consultants on the cost 

allocation study, which looks at over 600 different factors in terms 

of the air traffic control system, and looks at the various levels of 

facilities and the kinds of costs that are imposed there, and also, 

of course, takes into account the various type of aircraft and the 

activity that is there. 

What we have seen is that the commercial aviation arena is paying over 95 percent of the costs currently. Under the current cost 

allocation study that we have just issued today, they are paying 

about 95 percent, a bit over that, when 73 percent is what their 

actual use of the system would cost. 

In contrast, the general aviation community is paying between 3 

and 4 percent of the cost, and they are imposing 16 percent of the 

cost. Now, we have very detailed breakdown, and there is a great 

deal of background behind the cost allocation methodology and 

study. We do intend to brief Committee staff and Members as they 

would find helpful on this, because again, obviously it is a very detailed activity. 

Mr. PETRI. Did the different communities or their associations 

have an opportunity to review and comment on the study? In particular, one point I am interested in getting your take on, and that 

is the argument that there is a kind of a, that partly this situation 

exists because there is, with the hub-spoke system, there is peak 

demand and intensive use of the system, and there is congestion 

pricing in effect, that because of the fixed schedules, there is less 

flexibility and therefore more cost from commercial aviation than 

from some of the other users. Could you discuss those factors, rather than just movements of planes and this kind of thing, the marginal cost, if you have to have a system that is robust at certain 

times of the day, rather than being able to spread it out, would it 

presumably fairly on those who are less flexible in causing that increase in use at that particular time? 

26

Ms. BLAKEY. I would be happy to. To your first point, we have 

been working on this proposal, the Administration’s proposal, for 

more than 18 months and have done a lot of consulting with the 

various aviation stakeholder groups. Now that we have brought 

forth our proposal and the newest cost allocation study, we are certainly briefing all of the groups involved and will be working with 

them in great detail on this. But we have also taken into account 

their views and methodology, which goes to the second part of your 

question, which is no, the cost allocation study does not consider 

a blip on the radar screen to be a blip, and all activity is even. In 

fact, we do accept the premise that the general aviation community 

has presented that there is a difference in the use of the system 

in terms of peaks, the hub system, demand, and congestion—all 

those issues, they are costs that the commercial aviation arena 

poses that the general aviation doesn’t. 

There is also the argument that the system was not initially 

built entirely around the demands of general aviation. That is all 

quite true. So is there an argument to be made that they are more 

marginal users of the system? We think that there is a significant 

difference there. And therefore, at every point in the cost allocation 

study where you could go to the side of saying, if it is general aviation it is more marginal use, and therefore you do not account for 

as great a cost, we have done so. I think it is fair to say that the 

cost allocation study we have done leans very heavily to the arguments of the general aviation community that they are more marginal users. 

Mr. COSTELLO. Thank you, Mr. Petri. 

Mr. DaFazio is recognized for five minutes. 

Mr. DEFAZIO. Thank you, Mr. Chairman. 

Administrator, good to see you again. You have such southern 

gentility to say what a pleasure it was to be before the Committee 

today. I am sure you have had more pleasurable days. But as you 

can see, there is tremendous concern about this new proposal. 

I haven’t seen the allocation study, I have been arguing over this 

issue for the 20 years or so I have been on the Committee. It obviously depends on certain assumptions. You say you consulted with 

the stakeholders. I mean, tell me, what was the consultation with 

GA like? Was it as warm and friendly as today’s hearing? And did 

they ultimately accede to your conclusions, or are you just registering their objections and moving forward? 

Ms. BLAKEY. You know, I think at the heart of this, of course, 

is no one wants to pay more. And I do understand that. But what 

I would say is this: that we have worked very hard to listen to the 

concerns of general aviation. That is why we are proposing a hybrid system. Most systems around the world, as you know, go to 

a straight user fee system. And we are proposing to you that there 

be a fuel tax for general aviation, because we accept that the burden that they are concerned about with a fee system would be 

greater than they should bear. 

We have also, as I said, in the cost allocation, listened very much 

to the concerns of general aviation. And at any point where we felt 

that we could move to that in terms of specific costs, we have done 

so. Some parts of the stakeholder community have done a very sophisticated analysis of ways to approach cost allocation. And frankVerDate 0ct 09 2002 16:46 Aug 10, 2007 Jkt 000000 PO 00000 Frm 00042 Fmt 6633 Sfmt 6633 P:\DOCS\34781.TXT HTRANS1 PsN: JASON
27

ly, they have argued against certain earlier forms of cost allocation. 

Ramsey pricing, for example, which again, we accept, and we have 

moved very strongly to one which is very transparent, is entirely 

cost-based and frankly, makes us extremely accountable for the 

costs involved. 

Mr. DEFAZIO. I guess the question would be, why would we go 

through an extraordinary battle, reallocate costs to raise less 

money? 

Ms. BLAKEY. In the long run, you will not be raising less money. 

You will be enabling us to make the kinds of————

Mr. DEFAZIO. Well, in the short run, we are raising less money. 

You must be making some assumptions about future enplanements 

or costs of tickets. Tickets are going up, enplanements are going 

up. So I am puzzled as to why you think that this other system 

would raise more money, unless you are intending to raise the tax 

even further and you don’t think a gas tax of 50 cents a gallon, 

56.4 cents for general, plus the 13.6, 70 cents a gallon, is going to 

have a depressive effect on the GA community. Supply and demand, I would assume that a lot of people are going to choose to 

fly less, so I would assume that you are not taking current levels 

of GA, but you must be projecting some downturn in GA. I don’t 

know what you are projecting in commercial, but if we maintain 

the current system from the projections I see, we would raise more 

money every year for the indefinite future. 

Ms. BLAKEY. When you look at the history of revenue coming into 

the Trust Fund, you will see wild fluctuations in the revenue coming in. It has not been predictable, and it has been a problem from 

the standpoint of the balance in the Trust Fund. Right now, the 

Trust Fund balance, an uncommitted balance, is at an historic low. 

I don’t think that is arguable. It has been a decade since it has 

been this low. 

Mr. DEFAZIO. In part because Congress mandated, because were 

concerned a number of bills ago, about there being too big of a balance and we mandated that it be spent down. So if we want to 

have an objective of having a large reserve or trust fund, we can 

say, no, we want to build the trust fund again and sort of redirect 

your efforts in that area. And if you could really raise $500 million 

or $600 million more with the current structure, and you can live 

on $500 million or $600 million less, then we could say, well, let’s 

put that $500 million or $600 million in here, if we think we need 

a larger reserve, which I am not convinced we do. But we would 

be open to that argument. I certainly want to have a prudent reserve for potential downturns. 

Ms. BLAKEY. I think the problem we are dealing with is there is 

no relationship between the price of a passenger airline ticket and 

the cost of running the system. 

Mr. DEFAZIO. If I could, madam, there is very little relationship 

between anything known to mortals and the price of an airline 

ticket, the way the system works. 

[Laughter.] 

Ms. BLAKEY. I couldn’t agree with you more, Congressman, having paid a few of those myself and been mystified. 

So I think that is right. While I would agree with you that currently, right now, ticket prices are going up, the long-term forecasts 

28

and projects that we and others in the airline industry and the 

manufacturing industry are that ticket prices are going down. So 

again, this is one of those things that we could probably debate, 

but you could look at the fluctuations on revenue and it is very erratic. And there is no relationship. Every business in America 

wants to tie its costs to its revenue. It is a very basic principle that 

we are adhering to here. We want it to be stable, we want it to be 

predictable. And as the costs of the NextGen go up, and we, the 

Congress and the user community believe————

Mr. DEFAZIO. I am out of time. 

Ms. BLAKEY.—you should, that you have to reduce the costs. 

Mr. DEFAZIO. And I won’t be quite as blunt as my colleague, Dr. 

Ehlers, but I will say, I agree with his sentiment, but express it 

more delicately. I think we probably are belaboring it. 

Let me ask one other question very quickly. PFC, I was sort of 

the father on the Democratic side of PFC many, many years ago. 

My idea for that was in particular, since I saw two airports in my 

State, one being in my home town, where one city had to raise all 

the revenue to build a new terminal and I live in the other city, 

so hey, I didn’t have to pay the taxes. Wasn’t that great. Well, I 

didn’t think that was quite fair, because I use it a lot. 

And then Portland, where we had people coming over from a 

neighboring State to use the airport. So I fostered this idea, and 

I think it has worked relatively well. I am concerned about both 

the increase proposed, and I assume that if you are increasing the 

segment, are you going to increase the total? I mean, right now it 

can’t be more than $18 per round trip at $4.50 a segment. So if it 

is going to $6 a segment, are you proposing $24 per round trip? Because we are about to eat up all the money that you might save 

the airlines over here. They consider that a tax, you know, and 

they consider it to be their money. You are about to eat up all the 

money you might save over here in your new fee structure over 

here in higher PFCs. 

Ms. BLAKEY. PFCs, yes, we are proposing that they go from $4.50 

to $6 and there would be the same structure there as currently. 

Mr. DEFAZIO. Twenty-four dollars? 

Ms. BLAKEY. Yes. I would say that, of course, they are locally determined and project-based, and they have been very successful, 

frankly, in advancing infrastructure. 

Mr. DEFAZIO. One last quick question. I am concerned that you 

are proposing to expand eligibility. In particular, I would look at, 

one of the expansions, I understand, is parking. Now, if I fly Eugene-Denver-Dulles and I pay a fee at PFC, I agree, I should pay 

a PFC to contribute to the terminal and other related activities. I 

never, ever have walked out of the Denver airport, probably never 

will, never parked a car there. Why should all of those people 

transiting that airport pay for a parking project? I am very concerned about any expansion in the scope. 

We had to fight mass transit proposals that really weren’t related, I mean, we had to fight a whole host of things when we 

started this program. We really have it fairly narrow, I think acceptable to the public. We are not seeing revenue diversion, which 

is the original reason PFCs were killed off 25 years ago or 30 years 

29

ago. I really am concerned about any expansion. I just would leave 

that with you. Thank you. 

Thank you, Mr. Chairman. 

Mr. COSTELLO. I thank you. 

Mr. Graves is recognized for five minutes. 

Mr. GRAVES. Thank you, Mr. Chairman. 

I have gotten indications, I know we keep talking about the trust 

fund is at the lowest point it has ever been. And it was just pointed 

out so eloquently, that we move to draw down the trust fund. But 

revenues into the trust fund are increasing, isn’t that correct? 

Ms. BLAKEY. Currently revenues are increasing, that is correct. 

Mr. GRAVES. So revenues into the fund are increasing, but the 

trust fund is being drawn down, I am trying to get some things figured out here. 

Mr. Scovel, you said that this next generation system is going to 

be anywhere from $500 million to a billion? That is a pretty broad 

anywhere between. 

Mr. SCOVEL. Yes, sir, it is. That is what we estimated based on 

what we anticipated funding needs to be from 2009 to the next several, over the next several years. 

Mr. GRAVES. And in the funding proposal, Administrator, we are 

going to pay for 25 activities related to, in terms of fees, some aircraft are going to pay 25 activities related to the FAA’s regulation 

and certification activities, which only 12 of these have been defined. We don’t know what the rest of them are, or at least they 

are not in the proposal, right? So we don’t know, we are not sure 

which fees are going to be out there for certification and some of 

those other areas. 

Ms. BLAKEY. I am sorry, I am not following you. We are going 

to work with the stakeholder community to actually set those. It 

is permissive and allows us to do it in that form. Not all of them 

were dollar set. The ones that are dollar set are the ones that are 

very specific to customers, individual customers. 

Mr. GRAVES. And then we have, the FAA is going to then be able 

to adjust costs for inflation or whatever their allocation formula 

dictates. And I know you have an elaborate allocation. What I am 

getting at, the big picture here is, we don’t know what this thing 

is going to cost, we don’t know what it is going to be, we don’t 

know when it is going to be put in place, we don’t know what all 

the fees are going to be. There are so many things we don’t know, 

Mr. Chairman. I would venture to say that, I have a hard time 

talking about funding anything when we don’t know, we don’t 

know what it is. We don’t know what any part of it is. We have 

a great idea. It really sounds good. 

Ms. BLAKEY. No, it is much more than an idea. It is much more 

than an idea. I can be much more specific about costs if that would 

be helpful to the Committee. 

We are projecting, in fact, for NextGen costs, over the next five 

years, a cost of $4.6 billion for infrastructure. That is approximately running at a billion dollars a year. I can also give you figures that will go out to the year 2025, which is when we are hoping 

to complete the entire plan for the NextGen. 

Now, I don’t think the fact that we cannot tell you precisely what 

the capital investments will be all the way out to 2025 is unreasonVerDate 0ct 09 2002 16:46 Aug 10, 2007 Jkt 000000 PO 00000 Frm 00045 Fmt 6633 Sfmt 6633 P:\DOCS\34781.TXT HTRANS1 PsN: JASON
30

able, because there is not a corporation in America that could tell 

you what their capital investments are going to be that far out. 

There are changes in technology. But we do have out the concept 

of operations now, and we will be presenting this spring the enterprise architecture, which does give you the blueprint. And we have 

a number of demonstration programs, which are the backbone of 

the NextGen going right now. 

Mr. GRAVES. Well, let’s talk about the airports. If we are going 

to talk about, and we keep talking about congestion and all these 

delays in the system. Really, the fact of the matter is, congestion 

comes from just a few airports. It really does. I have been flying 

now every single week back and forth from DCA to Kansas City 

and then various places in between. Those are two airports that 

probably are under-utilized airports, Kansas City Center in the 

midwest probably doesn’t have nearly as much traffic, because if I 

ask for a flight following I can get it. They don’t have to tell me 

to wait. 

But I know that there is congestion in some areas. And I would 

venture to say it is more a function of those runways and the 

amount of activity at that airport than it is necessarily the air traffic control system. I think we ought to be talking about fixing those 

areas specifically, instead of overhauling the whole system based 

on congestion in some of these under-utilized places. 

I do have a little bit of problem too, Mr. Scovel, when you mention things like ComAir crashes meaning the backdrop for why we 

need to do this. That had nothing to do with the air traffic control 

system, absolutely nothing to do with it. And I resent the fact that 

we are using things like that to try to further a system like this 

and justify a system like this. 

I am still extremely frustrated, Mr. Chairman. I apologize. But 

I am, this has really got me in a wad, it really does, for the entire 

aviation community. I know what to do about it, I don’t think we 

ought to be talking about it if we don’t know what it is we are talking about. 

Mr. COSTELLO. I appreciate the gentleman’s comments. Let me 

make two comments quickly before we recognize the next member. 

And actually, ask a point of clarification from the Administrator. 

When you mentioned the $4.6 billion over the next five years, is 

our assumption correct, then, that in your budget projections under 

the user fee system, that $4.6 billion is included? 

Ms. BLAKEY. Yes, in fact, if you look at the out years in our projections, the investment in NextGen ramps up significantly. I think 

it is very accurate to say that, as with a system of this type, an 

approach of this type, you have the beginning, R&D stages and 

demonstration projects, and then you move into the implementation stage, when significant infrastructure investments have to be 

made. 

Mr. COSTELLO. Your revenue requirements and projections meet 

that? 

Ms. BLAKEY. They do. 

Mr. COSTELLO. OK. And then the second point, if I can, Mr. 

Graves, to respond to the point that you made about ComAir, and 

it wasn’t an air traffic control issue, the only thing I would point 

out is that it was very clear that two controllers should have been 

31

on duty and only one was. I understand the cause. I understand. 

But the report clearly pointed out that it may not have had anything to do with the accident, but there should have been two controllers on duty and there was only one. 

Let me recognize the gentleman from Illinois, Mr. Lipinski, for 

five minutes. 

Mr. LIPINSKI. Thank you, Mr. Chairman. I want to start out by 

congratulating you on becoming chairman of the Subcommittee. I 

know you are going to do a great job. Certainly your wisdom was 

shown by one of the first things you did, I know, was come out to 

Midway Airport in my district. It shows your great wisdom in coming out there. I also want to congratulate Ranking Member Petri 

and I look forward to working together with you in this Congress. 

I also want to thank Administrator Blakey for coming out there 

to Midway Airport. I appreciate your coming there and viewing the 

safety improvements and appreciate the cooperation and the help 

that you have given in helping to put in the EMAS system in there 

and make Midway Airport more safe. I just want to also take this 

opportunity to reiterate a point I made to you there in a letter in 

January, that I will oppose any expansion of Midway Airport, it is 

a very important issue back in the district. I think with the safety 

improvements there, we see things really looking up at Midway 

Airport. 

I wanted to briefly mention, I know Chairman Costello is going 

to come back to this. I am concerned about the number of air traffic 

controllers and the impact that it is going to have on the system. 

I know Mr. Costello is going to come back to that in a second 

round. 

So I just wanted to mention and ask a question, my concern here 

with the proposed budget is cutting the AIP. And with the capital 

improvements going on at Midway Airport and the program going 

on, the O’Hare modernization program, its tremendous impact, and 

not only locally in the Chicago area, but for the entire Nation, it 

would seem that by cutting the AIP funds that it would have a detrimental impact on this program. So I wanted to know what the 

impact is going to be and if you tell me it is not going to have a 

detrimental impact. 

Ms. BLAKEY. Congressman, I appreciate your bringing up 

O’Hare, because I know we both share the commitment to making 

certain that we do everything possible to keep that project on 

track. O’Hare is the nerve center in terms of our transcontinental 

traffic all across the U.S., as we know. When O’Hare sneezes, all 

the rest of us get a cold, and right now, it has a pretty big cold. 

I was looking at it this morning in terms of delays and cancellations because of the weather. 

Mr. LIPINSKI. I don’t know if we can do anything about the snow 

in Chicago. 

[Laughter.] 

Ms. BLAKEY. That is beyond me, I will tell you that. 

The level of AIP that we are proposing will absolutely keep our 

commitments, such as those to O’Hare, on track. Our letters of intent, our investments that are required there, will absolutely remain intact. In fact, the $2.75 billion will allow us to cover all of 

32

the high priority safety, capacity, environmental and standard-setting work that we are committed to right now. 

Mr. LIPINSKI. Thank you. I will yield back the balance of my 

time. 

Mr. COSTELLO. The Chair would recognize Ms. Fallin for five 

minutes. 

Ms. FALLIN. Thank you, Mr. Chair. Administrator Blakey, it is 

always good to see you. 

Oklahoma is a very rural State, and we have over 100 federallydesignated airports in our State. Our small airports depend upon 

the stability of funding for the AIP program. I know the Administration has proposed to cut the funding for that program by almost 

a billion dollars, almost in half. And Oklahoma estimates that it 

would lose a substantial amount of money for our smaller airports. 

In Oklahoma, we attract a lot of companies and jobs by expanding 

our airports in the rural communities, and have a lot of commercial 

and private aviation that goes in and out of our rural airports that 

helps bring in companies and jobs. 

I also understand from our people in Oklahoma that the Essential Air Service grants program, which helps fund some of our commercial locations, airports, could also possibly be at risk of losing 

funding if the AIP programs are cut. So in light of us believing that 

there is a direct relationship between helping expand our airport 

service in our rural communities and economic development, the 

people of Oklahoma in the aviation industry have asked, what do 

you recommend or what do you think would happen if we do slash 

these funds and these programs to the rural communities who depend upon these programs, especially in light of economic development? 

Ms. BLAKEY. I appreciate your question, because I certainly do 

recognize that rural airports in Oklahoma and in a lot of States are 

very critical, and they are part of the engine of expansion for the 

economy. I would highly recommend that we look together at greater length at the Administration’s new reform proposal, because 

there is a tremendous amount of advantage for small airports in 

the way we are proposing to change the approach we take to AIP. 

What we have seen is that AIP is particularly critical to small airports. The larger airports are able to raise money through PFCs, 

bonding and other things, and do not rely on it as much of a critical source as do small airports. 

So what we have done, therefore, is look at the formulas that are 

inherent in the current system, and they are very outdated, and 

look at the fact that we do need to support our smaller airports 

with more of the kind of funding that they can count on from AIP, 

on an entitlement basis, and we are able to do that, we think, 

much better and with much more targeting under a new system we 

are proposing than what we have before. 

So I would point you to that, because there is a good bit of detail 

there, and I would like very much to talk with you about it. 

Ms. FALLIN. OK. Thank you, Mr. Chairman. I yield back my 

time. 

Mr. COSTELLO. Thank you. At this time, the Chair recognizes the 

gentleman from New York, Mr. Hall. 

33

Mr. HALL. Thank you, Mr. Chairman, and thank you to our distinguished panel. 

Administrator Blakey, I was wondering, and looking at the staffing numbers for air traffic controllers, which are low around the 

Nation, it seems to me that the FAA should have seen its controller 

crisis coming some time ago. When you have controllers who were 

hired between 1981 and 1984, and they are eligible to retire at age 

50, anyone could have seen this retirement trend coming down the 

pike decades in advance. Yet the FAA only hired 13 controllers in 

2004. 

This year, the FAA is going to hire 1,420 after the FAA self-imposed work rules for controllers took effect. It would appear as 

though the FAA waited to handle the staffing crisis until after a 

new, disadvantageous pay structure was put in place in order to 

cut labor costs. Was this the motivation behind FAA’s staffing 

strategy? 

Ms. BLAKEY. No, not at all. In fact, of course the FAA has known 

for many years that because controllers retire at age 56—it is the 

mandatory age—we knew that we were going to have a large wave 

of controller retirements coming, and we had to prepare for it. That 

is the reason we have a very detailed controller staffing plan that 

we will be providing you an update on about the first of March. 

In fact, the number of controllers that were hired back in 2004, 

that 13 figure, was because we were under real constraints in the 

budget that Congress was aware of—we were all aware of it—and 

it did not allow us to ramp up as much as we would have liked. 

Since then, however, we have been addressing that. And you will 

see in the controller hiring plan that we are going to be steadily 

doing this so that we will have a net increase each year as we need 

to to staff to the projected retirements as well as to the growth in 

traffic and to the fluctuations that we will see in various parts of 

the Country. 

In response to the Inspector General’s concern, and I think we 

agree with this, that we provide facility by facility estimates of 

what staffing should be, that will also be a part of that plan, which 

I think will be helpful to you. Because as you look at it, you will 

see that in parts of the Country we have significant requirements 

coming up, and in other parts we don’t. There are parts of the 

Country where we have overstaffing, just like we have understaffing. On average, throughout the Country, we are hitting our 

staffing requirements. 

It is frequent that the controllers union will be using figures that 

go back to 1998. They are very old figures that they call authorized 

figures. They were set as a part of a contract negotiation, not because of current staffing and retirement levels. 

Mr. HALL. Well, that raises a question. Do you anticipate continuing forward with a rule that is imposed, or do you see the FAA 

at some point going to binding arbitration? Do you think that the 

work rule or the pay structure has anything to do with the retirements? 

Ms. BLAKEY. Let me go to the first part of your question, then 

I will address the second. The FAA did just as the statutory requirement set by Congress mandated, which was that when we entered into contract negotiations—and the FAA has a very unusual 

34

requirement that is not true of most parts of Government—and 

that is that we negotiate for pay. It is an extraordinarily difficult 

thing to do. But we went through a long period of negotiations with 

NATCA, with our controllers union, attempting to get a voluntary 

agreement. When we were unable to do so, and there were several 

key parts of the contract negotiation that were outstanding, all of 

which had to do with pay and various forms of compensation, as 

well as several key work rules, we then did as the statute requires 

and presented it to Congress. we presented our proposal, they were 

able to present theirs. And this was reviewed for 60 days by Congress. 

Should Congress have wanted to step in and increase the amount 

of the contract, that was a possibility that could have happened. It 

did not happen and we moved forward with the current contract. 

We do not anticipate reopening the contract. 

Mr. HALL. Thank you for that explanation. 

Ms. BLAKEY. But I would suggest to you this, that I think there 

has been a phenomenon that we saw in the latter part of the year 

in terms of controller retirements. We saw 116 more controllers retire in the latter part of the fiscal year than we anticipated. It is 

not a big percentage, it is less than 1 percent of the workforce, but 

nevertheless, we have adjusted our retirement projections up, because we want to be certain that if the contract is having an effect 

on some controllers who choose to leave early, and remember that 

our veteran workforce was held harmless financially, but if they do, 

we have adjusted the numbers up on retirements. 

Mr. HALL. Thank you. 

Just one more quick question if I may. It looks as though the 

President wants to cut the airport improvement program, looking 

at this budget. How can the FAA meet current needs, like for instance at Stewart, the airport in my district, which is looking at 

hopefully expansion and infrastructure that needs to be added? I 

am just curious how those things can happen at the same time. 

Ms. BLAKEY. Well, as you know, we have had a lively interest in 

Stewart, because, of course, it is a former military base. We have 

been very interested in the recent phenomenon of the Port Authority then moving back there, because we too see that Stewart has 

tremendous potential. 

I don’t think there is any doubt about the fact that we will continue to be financially available to Stewart and the needs there, as 

the plans for the airport develops and specifics are put forward by, 

I expect at this point it will probably be, by the Port Authority. Is 

that correct? 

Mr. HALL. I think so, yes. 

Ms. BLAKEY. But we will be looking forward to working with you 

on that, because again, we know in the New York area that Stewart has an increasingly important role to play. 

Mr. HALL. Thank you very much. 

Ms. BLAKEY. You are welcome. 

Mr. HALL. Thank you, Mr. Chairman. 

Mr. COSTELLO. Let me mention, as the gentleman knows, we 

have discussed the issue of the contract between the FAA or the 

lack thereof and NATCA, and we intend to address that in this 

Congress. 

35

Let me recognize at this time the gentleman from Michigan, my 

friend Mr. Ehlers, for five minutes. 

Mr. EHLERS. Thank you, Mr. Chairman. I have a question for 

each of the inspector generals. First of all, for Mr. Scovel, some 

comments about ADSB. How do you see ADSB changing the current system, and what do you see as the likely time frame for adoption and implementation of ADSB? 

Mr. SCOVEL. Thank you, sir. ADSB represents a tremendous step 

forward in terms of the technology available for both aircraft and 

ground control to understand where aircraft are, and frankly, to reduce separation between aircraft when it is fully implemented. 

There are two types of ADSB, as you may well know, ADSB in and 

ADSB out. They will be implemented at different time frames. But 

when it is fully operational, it will permit, under NGATS, significant improvements in capacity. I think that is the primary goal, 

certainly of FAA, in presenting that forward. 

ADSB, we estimate, is a system that is on target, it is properly 

funded for the current fiscal year, in order to move it forward. I 

don’t know what the current timetable is for its full implementation. I would defer to Administrator Blakey for that information. 

Perhaps she can respond to your question on that score, sir. 

Mr. EHLERS. I am concerned about the financial aspects. Will 

that save our system money, compared to our current system, and 

if so, do you have any estimates of how much it would save? 

Mr. SCOVEL. I don’t have estimates on that, sir. It would be difficult for me to say at this point, will it save the system money. 

When we talk about improvements in capacity, arguably improvements in safety as well, it is hard to put a price tag on those 

achievements, should they come to pass, as we hope that they will. 

We think, as I said, that ADSB, at least for the coming fiscal 

year, is properly funded. I don’t have estimates going forward as 

to how much it will cost and whether it represents an improvement 

over the current system. 

Mr. EHLERS. Long term, would you expect it to reduce the number of controllers needed? 

Mr. SCOVEL. Possibly, yes, sir. 

Mr. EHLERS. But you are not sure? 

Mr. SCOVEL. I am not sure. 

Mr. EHLERS. All right, thank you. 

Mr. Dillingham, your comments about the NASA gap in your testimony, I am very concerned about that. Because the 10 to 20 year 

future of aviation is going to depend tremendously on resurface and 

development. There are so many things coming down the pike. 

That could affect us, could affect the system, certainly could affect 

the economic aspects of the industry itself. But right now I am just 

thinking about our role in this. If NASA is not keeping up with it, 

we don’t really have enough money scheduled for FAA to do all the 

research, do we? 

Mr. DILLINGHAM. I think the 2008 budget does call for an increase in the monies that would be available to do early demonstration work in NGATS, both in the research and engineering and development part of it, as well as in the F&E account. Whether it is 

going to be enough or not, I couldn’t say. But it has been recognized that there is that gap in terms of technology and demonstraVerDate 0ct 09 2002 16:46 Aug 10, 2007 Jkt 000000 PO 00000 Frm 00051 Fmt 6633 Sfmt 6633 P:\DOCS\34781.TXT HTRANS1 PsN: JASON
36

tion. It also has been recognized that this is something that has to 

be addressed very soon. 

Mr. EHLERS. OK, I appreciate it, because I totally agree with 

that, and it is very frustrating that so much of the NASA budget 

is being devoted to space programs that some of these other programs are being shortchanged. 

Finally, Ms. Blakey, I continue to admire your work. I hope you 

are not offended by my comment earlier about the proposal being 

dead on arrival. But I do know the Congress. 

And I am very sincere about an offer to try to work with you and 

try to work out—I think it is entirely too easy for us in the Congress to sit here and fire away at proposals that the Administration 

brings here. I would like to lay some of the burden on the Congress 

itself to come up with ideas to address the problems. There is no 

question the problems are there, no question they have to be addressed. And if we just fire salvos at you all the time, we are not 

going to solve the problems. So I hope you understand, my suggestion was offered in the spirit of trying to reach some agreement 

with a good result. 

With that I will yield back. 

Mr. COSTELLO. I thank the gentleman. 

The gentleman from Tennessee, Mr. Cohen, is recognized for five 

minutes. 

Mr. COHEN. Thank you, Mr. Chairman. 

Ms. Blakey, I am a freshman, so I don’t know where you are 

from. It is obvious you are from a garden spot, but which one? 

Ms. BLAKEY. Tupelo, Mississippi and Montgomery, Alabama. I 

claim both. 

Mr. COHEN. Well, Tupelo is more like greater Memphis, so that 

is a garden spot. 

[Laughter.] 

Mr. COHEN. And being from Memphis, I was a little concerned 

about this information here that the accident rate for cargo carriers 

is over six times higher than commercial passengers. Being that I 

am a commercial passenger, I was kind of happy. But being that 

I am from Memphis, I am absolutely, positively concerned about 

the cargo rate. Why is that rate six times what it is for passenger 

traffic? 

Ms. BLAKEY. I think you have to start with the fact that the accident rate and commercial fatal accident rate is at a remarkably low 

level. It is such a tiny, tiny percentage, that you are backed up 

against that, would be one point. 

But secondarily, of course, cargo as you well know flies at night, 

and flies under difficult IFR conditions. You often have flights from 

small airports from where you are picking up cargo and flying back 

into the hubs. There are a number of challenges involved in the 

cargo arena. We have been working on this within the FAA and 

with not only the big cargo carriers, FedEx, UPS, et cetera, but a 

number of the smaller ones, and with their association, looking at 

good ways that we can help in terms of both pilot awareness, as 

well as the physical issues that go with the overnight delivery system. Some of it, of course, is day as well, but a lot of it does go 

to, as I say, more challenging circumstances and environment. 

37

Mr. COHEN. So it is not due to maintenance of the aircraft, it is 

more with the circumstances of the flights? 

Ms. BLAKEY. I think on the whole, you have a very safe maintenance record there. There are probably differences, again, among 

specific carriers. 

Mr. COHEN. You mention in your remarks that the tarmac 

should be a takeoff area and not a holding tank. And that caused 

me a little concern there, because some folks have been kept on airplanes for like a long time, as if they are on a holding tank. I discussed with Representative DeFazio a bill he had some years ago, 

a passenger bill of rights that I think I am considering introducing 

this session. What do you think is a reasonable amount of time to 

be crammed in as cargo in a passenger plane on a tarmac as if you 

are in a holding tank, before the Government would want you to 

get off and be able to use the facilities? 

Ms. BLAKEY. Well, I will tell you, as far as the FAA is concerned, 

we are striving to have on-time performance hit above almost 90 

percent of the time. 

Mr. COHEN. Yes, but this is when you are not having on-time 

performance. 

Ms. BLAKEY. I understand. It is not, of course, the role of the 

FAA to tell the airlines what their customer service should be. But 

we do believe that the delays that we are experiencing right now 

in the system are a terrific problem. There is no question about it. 

We also understand that the airlines at this point need to step up 

to address some of the circumstances that have occurred recently 

that have really made headlines and I think have caused some genuine, legitimate concern and outcry from passengers. 

Mr. COHEN. And since passengers pay most of the fees, it is the 

passengers who pay the fees, don’t you think maybe three hours is 

beyond a reasonable time that somebody should be a hostage? 

Ms. BLAKEY. As a passenger, I can tell you, three hours is way 

too long for me. 

Mr. COHEN. I would like to thank you. Let me ask you this, too, 

about cell phones. I had lunch with Senator Alexander today. He 

is a friend and he also shares the idea that cell phones could be 

a cacophonous connection there. What can you assure us, your concerns about not seeing that there are 90 different people carrying 

on conversations at the same time? 

Ms. BLAKEY. There is a lot of concern about that. It is surprising 

to me the amount of over the transom traffic I get on that particular point. Let me just tell you that where things stand right 

now is that whether or not there will be a move toward the possibility of cell phones on aircraft additionally is a call of the FCC. 

It goes to spectrum issues and other things. 

After that, then it is the FAA’s considered judgment that safety 

comes first before anything else. And any carrier that would propose to us that they wanted to allow cell phone usage on board the 

aircraft after the doors are shut would have to demonstrate that 

it would have no effect on the avionics and no effect on safety. That 

would be something that we would require as a threshold issue before we went any further. 

38

Mr. COHEN. Thank you. I would suggest just from my own sensitivities, maybe, that if you allow that, you are going to have a lot 

more air marshals and air deputies. 

[Laughter.] 

Mr. COHEN. They will just take up too many seats, and you won’t 

have those fees, those 750 fees, because I guess they fly for free. 

Do you have any proposals for consumer issues on passenger aircraft? Is that something you consider, things where maybe those 

people that pay all those fees get a little bit better peanuts or potato chip or something? 

Ms. BLAKEY. I will tell you, as much as I am a passenger and 

am very, very concerned about the kinds of issues that are behind 

your question here, the FAA is a regulator. We have as our mission 

primarily the safety and the running of the NAS, and the system 

and capacity is our focus. When it comes to those kinds of consumer and significantly economic issues, we are prohibited from 

getting involved. The Department of Transportation and others do 

address some of those issues but they are not ones that we can address. 

Mr. COHEN. Who prohibits you? It is not law, is it? 

Ms. BLAKEY. If you have the regulatory enforcement role, that 

also has an economic sway and economic decision making, it really 

does run into points where you do have a conflict between those potentially. I think many, many years ago, the determination was 

made that others should have the authority, for example, on questions on consumer concerns, routes, what routes are warranted 

internationally, and a number of economic issues. 

Mr. DEFAZIO. Will the gentleman yield for a moment? 

Mr. COHEN. Yes. 

Mr. DEFAZIO. Thank you. 

Madam Administrator, until the ValueJet crash, despite my best 

efforts, the FAA was charged with promoting and regulating the industry, something which I always pointed to as an inherent conflict. The amendment was never accepted until after ValueJet, 

when Secretary Pen ̃a was very embarrassed after he had said how 

great the airline was, and the next day he grounded it, because in 

fact neglect and outsourcing of mechanical had caused death. 

So people came to me and said, well, how about that amendment, 

where do you want it in the bill? So we stripped away that, but 

there is nothing to say that Congress could not charge the FAA 

with protecting the public, the traveling public, and charge you 

with that duty. There is no prohibition. If we were to say that we 

think it is a safety issue when you keep people on a plane for five 

hours on the tarmac or other issues that relate to that, smoking, 

historically, those sorts of things, those are regulatory issues that 

could fall within the purview of your agency. 

Ms. BLAKEY. I have long since learned not to duel with Congressman DeFazio or Chairman Oberstar when it comes to the history 

and development of the FAA, because believe me, they can reach 

back into a lot of this, and certainly do. I would suggest this, that 

right now we have our hands pretty full. But if you all see fit to 

give us additional responsibilities, obviously we will step up. 

Mr. DEFAZIO. Then we would have to give you a little more staff. 

Thank you, Madam Administrator. 

39

Mr. COHEN. Thank you, Mr. Chairman. If I could just have one 

more minute, I would like to encourage the Committee to consider 

something about consumers————

Mr. COSTELLO. Can I just point you are already three minutes 

over your five. But please. 

Mr. COHEN. That was it, just I think there should be some consumer concern. That is who pays the fees. I would like to make the 

observation that Elvis went from Tupelo to Memphis and I am surprised you went the other direction. 

Ms. BLAKEY. I will keep that in mind. 

Mr. COSTELLO. The Chair recognizes Mr. Dent for five minutes. 

Mr. DENT. Thank you, Mr. Chairman. 

Administrator Blakey, great to be with you. As you know, the Lehigh Valley International Airport is located in my district, LVIA. 

The Lehigh-Northampton Airport Authority, which owns and operates the airport, has recently updated its master plan. One of the 

major projects identified on that authority’s airport layout plan is 

in response to the FAA’s runway safety area program. 

In order to achieve the current RSA standards for each runway, 

one of the airport’s runways must be reconfigured at considerable 

expense. The use of the engineered materials arresting system, the 

EMAS, in this case, is not practical. So the scope involves bridging 

across a State road, placing overhead utilities underground and acquiring homes in the relocated runway protection zone and noise 

exposure area. 

Even more, there are potential impacts to a nearby elementary 

school. The airport authority is in the process of completing an environmental assessment for the project, and all indications are that 

with the mitigation measures included, that the project is feasible 

to construct. 

The primary concern that I have relates to the considerable funding that a project of this magnitude requires. It is possible that this 

work could require in excess of $40 million of Federal funding from 

the Agency’s airport improvement program. That is on top of other 

AIP grant funding needs at LVIA. 

At a time when the Administration is requesting a considerably 

lower amount of funding for the airport improvement program than 

has been typically authorized by Congress, how can my local airport authority and others throughout the Country, with deficient 

RSAs, reasonably expect to fund projects of this scale? That is my 

principal concern. We go through this whole process, the community gets alarmed, all the mitigation is done, the environmental assessment is complete, and then we get to the point of doing something and there is really not funding to deal with the issues. 

So how would you respond? How should I respond to my airport 

on this issue? 

Ms. BLAKEY. I would have to look in much greater detail at the 

specifics there to be more specifically helpful. But I would say this, 

that runway safety areas are a very high priority for us. We are 

striving around the country, wherever possible, to see that those 

meet the current standards that we have set, because we do believe 

that this is an important aspect of safety at our airports. 

I am disappointed to learn that the EMAS system may not be 

feasible for Lehigh, because what we have found is that as airports 

40

are continuing to evaluate that, it has proven to be quite a good 

alternative. For example, Midway, for a number of years, did not 

feel that that was the direction that they could go. And recently, 

just as Congressman Lipinski was noting and applauding, we have 

worked with them to install EMAS at Midway and it is working 

out quite well. 

So I don’t know, again, the specifics, but what I can tell you is 

we work very hard to fully fund the requests for RSAs, because we 

do see them as being important, and at the same time, trying to 

address the capital needs that airports may have for expansion and 

other kinds of enhancements. 

Mr. DENT. I appreciate your willingness to work with the airport 

on this issue. Because quite understandably, the community does 

become quite alarmed when they hear about runway expansions or 

relocations or improvements. We raise quite a public disturbance. 

Then when the funding is not available, the question becomes, why 

are we going through the process. 

Ms. BLAKEY. Well, again, RSAs are a very high priority. So we 

would certainly want to work with you to see what we can do to 

address the specifics there. 

Mr. DENT. Thank you, and I will take you up on that offer. 

Mr. COSTELLO. The Chair recognizes the gentleman from Missouri, Mr. Carnahan, for five minutes. 

Mr. CARNAHAN. Thank you, Mr. Chairman, and welcome to the 

panel. It looks like we have had a good discussion here today. 

I really want to focus on the issue, as you mentioned, numerous 

times, that safety was a primary concern, as it should be. I think 

we all agree with that. 

But there is an issue, I think, with regard to our air traffic controllers that is really a vital part of that safety mission. In my 

home State of Missouri, we have 163 air traffic controllers, 38 of 

those at St. Louis TRACON. They are essential to me, my family, 

all of us that fly, the flying public. They have had a long history 

and service to aviation, with new technologies. Their training and 

retention is going to be even more important. 

But I have a serious concern that many of us here on the Committee do of a lack of a contract, the high rate of retirements, and 

really their poor treatment and work environment. I think that all 

those things combined are a safety concern. 

With regard to retention and recruitment, my question is really, 

what can you do, what do you plan to do to improve the work environment, the morale, the professional treatment of our air traffic 

controllers to be sure that we can retain and recruit and train 

those that we need for the future? 

Ms. BLAKEY. Congressman Carnahan, I could not agree with you 

more that our air traffic controllers are an absolutely vital aspect 

of the safety of our system. They are consummate professionals and 

they do a terrific job every day. We are working very hard to ensure that the work environment, the circumstances in which they 

are trained and recruited, are all such that we will have the best 

and the brightest coming into the system, as well as holding onto 

the veterans that we have. That is why we did not change the compensation for our veteran workforce in terms of reducing what is 

a very generous salary structure right now. On average, with salVerDate 0ct 09 2002 16:46 Aug 10, 2007 Jkt 000000 PO 00000 Frm 00056 Fmt 6633 Sfmt 6633 P:\DOCS\34781.TXT HTRANS1 PsN: JASON
41

ary and benefits, our current controller workforce makes over 

$170,000 a year. 

Let me talk to you a moment about new recruits, because I am 

sure you are concerned about how they come into the system. We 

have over 2,000 people who have volunteered and qualify that on 

the list, wanting to come in to become air traffic controllers, right 

now. At the end of the first year, on average, their compensation, 

cash compensation, and I am not in this case including the retirement benefits, will be on average $50,000. That is after the first 

year. After five years, they are going to hit just short of $95,000, 

cash compensation. 

Now, as you can imagine, because I am sure looking at your 

overall constituents’ workforce, it is not difficult to recruit people 

with that compensation. But I do want to assure you that in terms 

of work rules, in terms of basic fairness, in terms of the best technology for training and the best technology for them to work with, 

that is one of the great reasons we are so concerned about moving 

to the Next Generation system. Because we do see that the constraints in the system and the requirements that are going to be 

placed on controllers, we have to move to the new technologies and 

provide them with all the tools they are going to need to do the job 

that is really vital to all of us. 

Mr. CARNAHAN. And do you see that anything additional can be 

done or should be done to really help to improve that overall environment? 

Ms. BLAKEY. Well, certainly. I can tell you this: when I go into 

a brand new facility and our controllers are in a brand new tower 

and they have all of the best equipment, that is obviously a terrific 

boon to them. And we are working very hard to address those 

kinds of capital investments as we go along. 

We also are making significant changes to training, so that we 

actually have simulators, just like pilots use, in some of our terminal facilities now. And we are making a much greater use of 

simulators in Oklahoma City, which is where our recruits and our 

Academy is. There are a number of things we are trying to do from 

that standpoint. 

But I will also assure you of this: we will be working with 

NATCA because we see the controllers union having a very important role to play in terms of advising us. We can make changes 

that improve the work environment and improve morale. We are 

going to be working closely with them in the weeks and months 

and years to come. That is a commitment that is there and Pat 

Forrey and I have met on a number of occasions to discuss concerns that they have with the new contract and things we might 

do to again make improvements that will make a real benefit and 

a different style workforce. We are very interested, believe me. 

Mr. CARNAHAN. Well, I would encourage that dialogue. Again, I 

think it is in all of our interests, and certainly the flying public to 

maintain that confidence, to maintain that work environment. Because they do need to make those kinds of split second decisions 

in their work that we all depend on. So thank you very much. 

Mr. COSTELLO. I thank the gentleman. 

42

At this time, Mr. Petri, I have a few remaining questions and 

then we will ask you if you have questions. There are no other 

members requesting time. 

Dr. Dillingham, in your testimony, and we all have clearly documented, and I think the FAA has acknowledged that they experienced a higher rate of retirements from the air traffic controllers 

than expected. In your work, have you identified any factors that 

might have contributed to that situation, specifically the lack of a 

contract or the contract that has been imposed by the FAA or any 

other factors? 

Mr. DILLINGHAM. Mr. Chairman, I think the discussion that was 

just completed supports the information that we have, as we looked 

into why the retirement sort of popped up the last couple of years, 

and that is, there was some dissatisfaction with the agreement, as 

well as the work rules that are being implemented at this point in 

time. 

Mr. COSTELLO. Any other factors that you would want to point 

to? 

Mr. DILLINGHAM. No, that was the main factor that was pointed 

to. 

Mr. COSTELLO. So that was the major factor. Very good. The next question, on the Administration’s proposal of $2.75 billion for the 

AIP program, I wonder if you might talk about the implications of 

if the Congress adopted $2.7 billion for the AIP, what are the implications for the small airports in this Country? 

Mr. DILLINGHAM. Mr. Chairman, we are at sort of a disadvantage, because we have not been able to see the proposal that was 

submitted earlier this morning. But generally, from what we understand, the large and medium hubs will do all right. They will 

be able to find support for their infrastructure development 

through the private sector. It will be the smaller airports that 

would be most affected by it. 

But again I say, we don’t have the full picture in terms of the 

other elements that are in the proposal that might mitigate some 

of those effects on small airports. I want to point out though that 

small airports are really going to be important in the coming years, 

because as we look toward bringing in VLJs or very light jets, as 

we look toward making better use of the airports that we have, 

those small airports and regional airports are going to assume increasing importance. 

Mr. COSTELLO. Very good. Thank you. 

Administrator Blakey, this is the last question I have. This is on 

the 2008 financing part of the budget proposal. But I want to ask 

one more question, because you had talked about going to the hybrid user fee financing proposal. You mentioned about flexibility. I 

wonder if you might talk about, you have said a couple of times 

that revenue versus cost, you have to generate the revenue to meet 

your costs. And then you also talked about flexibility. I wonder if 

you might define what you mean, the flexibility in the hybrid system. 

Ms. BLAKEY. The intent we had in creating the system, and this 

is from working very closely with this Committee and with the 

Congress, as well as the stakeholder community, is to put forward 

an annual budget that will cover the costs of the operation of the 

43

system, very precisely, and will also cover the costs of making the 

capital investments that are needed as we ramp up to the NextGen 

system. We see the stakeholder community having a huge involvement there, and there is a new stakeholder board that has real responsibility in all of this. And again, Congress has the exact same 

oversight that they do now, and we would be working very closely 

together through the appropriations process, as well as through the 

authorizing process, to ensure that we are sensitive to the kinds of 

concerns that have been expressed today. 

But the cost in the revenue, therefore, can be tied on a fee system on an annual basis. You simply adjust those, using the cost allocation. If they don’t need to be adjusted, fine. If the unit costs go 

down, that is great. If they have to go up, they have to go up. The 

tax system, the fuel tax system is not quite as flexible as a fee system. But what we are proposing is on an every two year basis to 

be able to make adjustments to that, to match as closely as possible, again, the costs that that portion of the community is imposing on the system. That is the kind of flexibility I am referring to. 

Mr. COSTELLO. You mentioned about the users being involved 

and you mentioned about Congressional oversight. I think that 

there are some people who are very concerned about who will have 

the final say in increasing fees. In other words, if the next generation costs are not contained and they continue to go up, does that 

mean that the FAA continues to raise fees for the users to meet 

those costs? 

Ms. BLAKEY. I don’t think there is any way you get to NextGen 

without it being a collaborative engagement with the stakeholder 

community. There is too much of it, frankly, that involves their 

own decisions, equipage and other things. For example, on ADS-B, 

we will be proposing a rulemaking this fall, an NPRM, that will go 

to how fast do you all feel that you can equip and how quickly 

should we require the capability to fly with ADS-B. 

Those are collaborative decisions that have to be made together. 

And they have to be made with the full work and analysis that this 

Committee and others will apply. So there is no way to make this 

an arbitrary decision on the part of bureaucracy at 800 Independence Avenue. We have established, and I think really grown in, a 

cooperative engagement with the aviation community in a way that 

really is making a tremendous partnership there. That is what the 

NextGen is going to require, and that will determine how fast you 

make those investments. 

I will tell you this, though—I think we also need to recognize the 

international environment in which we are engaged. U.S. leadership, U.S. technology has always been at the forefront in aviation. 

Europe is moving out smartly on their generation of the NextGen, 

SESAR. They are proposing very similar costs to the kind that we 

are projecting ourselves. Others around the world, Australia is already moving to ADS-B. We can’t really sit back and sort of dither 

and say, well, we are not able to figure this out and we can’t get 

our financing together, because we will be left behind and those 

technologies and those standards and those approaches will begin 

to really drive it. That is an environment that we cannot change, 

and that is happening. 

44

So it is not just the tremendous congestion that we are facing, 

that billion passengers by 2015, but it is also the world in which 

we are living. 

Mr. COSTELLO. I guess the point that I am making, that everyone 

is concerned about that I have heard from about user fees is the 

flexibility to raise those user fees and the incentive to control costs, 

if in fact you increase the user fees to match whatever your costs 

are. So that is a point that I wanted to make for the record, and 

that I have heard from many people who are concerned about turning this system over to a user fee system and giving the agency and 

others the ability to increase user fees at any time to match the 

costs. 

At this time, I would recognize the Ranking Member, Mr. Petri 

for any questions or comments he may have. 

Mr. PETRI. Thank you, Mr. Chairman. I have just a couple quick 

questions. The first is for Inspector General Scovel. We have been 

talking about cost-based user fees. My question is, does the FAA 

have a cost accounting system and a cost allocation system capable 

of supporting the development of cost-based user fees currently? 

Mr. SCOVEL. Sir, as I noted in my opening statement, FAA does 

have a cost accounting system. It is designed primarily to support 

management decisions regarding performance. We believe that in 

its present configuration, this cost accounting system may not meet 

all user fee requirements. We can cite, I can cite one example for 

you, sir, and that is that FAA is proposing to charge airlines for 

services provided at the 30 largest airports, for instance. Some of 

those airports house both the air traffic control tower and the associated TRACON, the terminal radar approach control facility. In 

that case, the cost accounting system assigns costs to the joint facility without distinguishing, as I understand it currently, without 

distinguishing tower services from TRACON services, even though 

that TRACON may support several airports. 

If deemed to have a significant impact on user fee calculations, 

we would recommend that FAA revise that aspect of the cost accounting system. There may well be other instances which my staff 

and I have not yet had an opportunity to address. But we would 

be happy to work on that for the Committee’s benefit, sir. 

Mr. PETRI. I would be interested in, perhaps, if you have some 

recommendations or concerns that we can get. What resources are 

available and geared up to go ahead and get things in place? Because we are going to be arguing a lot, and then we will put something in effect, and it may be stuff that won’t really—you know 

what I am saying, we will be getting ahead of ourselves. 

Mr. SCOVEL. And I don’t mean to say that it cannot be done. I 

am simply saying that in its current configuration and certain specific aspects, it may not support user fee calculations. So looking 

ahead, and as FAA fine tunes its proposal, we would expect that 

the agency would be able to address those points. 

Mr. PETRI. And then I guess my last question is for Dr. 

Dillingham. I just would be interested if you could give us your 

own, if you have done it, your projection as to the growth of corporate aviation, where you have an assessment or a figure as to 

what you expect that growth to be. There are new companies out 

there with new planes. 

45

Mr. DILLINGHAM. We have not looked specifically at the growth 

of corporate aviation. However, linked to your last question, we are 

right now conducting an analysis of the cost allocation system that 

FAA is using with regard to the user fee proposal. As a part of 

that, we are examining part of the basis of that cost allocation system, which includes the number of different types of GA aircraft 

that traverse the system, the corporate aircraft as well as the turbine. So to that extent, we will have some information reporting to 

this Subcommittee shortly about the point you just asked. 

Mr. PETRI. Very good. Thank you. 

Mr. COSTELLO. I thank the Ranking Member. And I thank our 

witnesses today for appearing before us. 

I will give you a last opportunity to make a comment. I see the 

Administrator is about to come over the table. She has something 

to say. So I will give you the opportunity to make a brief statement 

if you would like. 

Ms. BLAKEY. Well, I wish I had the energy at this point to come 

over the table. I am not quite sure that I could manage that. 

But I did just want to add one thought. We are looking forward 

to briefing you all, briefing the staff at length on the cost accounting methodology and all the details there. And certainly, there may 

be some fine tuning that should be required before we move forward. 

What I would say, though, is that our last audit did say that the 

cost accounting system that we have is suitable for use in terms 

of a user fee system. We do believe that when you get down to 600 

different units that we are analyzing that there is a tremendous 

amount of granularity and accuracy here that we believe can be relied on. So we will be working very carefully with you all to make 

certain that that is all transparent. 

The final point I would make, Mr. Chairman, is that in terms of 

the flexibility that you mentioned, I think it is important to note 

that we are talking about a system which requires the FAA to be 

very transparent, very accountable for its costs in a way we don’t 

have to be now. So there is downward pressure on costs, and there 

is real accountability. That is one of the great advantages in a system where we are cost-based and fees are at stake. And every year 

we have to, as you say, open our books and be accountable. And 

if people don’t want to pay for the services that we are providing 

at the cost we are providing, then we have got to really work with 

that concern on the part of the customer stakeholders. So it is a 

two-way street. 

Mr. COSTELLO. I did not intend to comment, but I think I have 

to at this point. I won’t go into some of my past experiences, but 

frankly, the users have no place else to go. It is not like they can 

shop around. They either get the services from you or they stay on 

the ground. But I appreciate your comments. 

Dr. Dillingham? 

Mr. DILLINGHAM. Just a couple of things, Mr. Chairman. I think 

it certainly is important to recognize that regardless of the funding 

mechanism that the Congress eventually approves, it is very important that some kind of reauthorization take place within a timely 

manner. We certainly, we don’t have that cushion to fall back on 

as we have in the past. I think it is important to recognize that 

46

the way FAA has been able to manage its acquisitions over the last 

three years is important as we move forward into the next generation. Because that is going to have a lot of acquisitions as well. The 

linkage there is the leadership or the cultural change agents, that 

have brought FAA to this point have a very short time left. The 

Administrator’s tenure is short, and we know that Mr. Chew is 

leaving very soon. And that kind of leadership gap can definitely 

have an effect on the ability of the agency to keep moving forward 

and not sort of fall back to where it was in past decades. So I think 

it is important from both of those perspectives. 

Mr. COSTELLO. Thank you. Mr. Scovel? 

Mr. SCOVEL. Thank you, sir. If I may make tow points, and I will 

make them brief. To respond to Mr. Graves, sir, I regret if my 

opening statement left the impression with Mr. Graves or with any 

other member of the Committee that I cited the ComAir accident, 

that unfortunate event, as a commentary on the controllers’ performance on that morning. I did not intend that. I think you were 

correct, sir, when you interpreted my remarks, sir, simply as highlighting the importance of safety, in the fact that that event was 

a reminder to all of us of the importance of that. 

I should say that NTSB, of course, has the primary responsibility 

for investigating that accident, not my office. Although we have undertaken an examination of FAA’s policy regarding two controllers 

in the tower rule and how it was implemented at Lexington and 

other facilities during the time period in question. 

My second point, sir, refers back again to the cost accounting system. And to clarify a point attempted to be made by both me and 

Ms. Blakey concerning the audit, as the officer in the department 

responsible for the department’s audits, it is my understanding 

that the audit supports the conclusion that the cost accounting system is sufficient to assign costs within or to service delivery points. 

It is rather a fine point, but it is one that I think needs to be made. 

Because when we are talking about user fees, that is really the 

next step down the line. Once we have assigned costs to service delivery points, then how are those costs to be allocated among users. 

And the audit itself did not address that question. 

My earlier comments regarding the cost accounting system had 

to do with its present configuration, how it might support user fees 

and my opinion as stated, sir, was that while there may be some 

points that need fine tuning, as Ms. Blakey said, it is largely sufficient to do that. But we would urge the agency and the Committee, 

of course, to examine that question carefully. 

Mr. COSTELLO. There is an advantage to going last. 

[Laughter.] 

Mr. COSTELLO. I thank the witnesses for being here today and 

there is no further business before the Subcommittee, so the hearing is adjourned. Thank you. 

[Whereupon, at 4:30 p.m., the subcommittee was adjourned.]

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