Concerns Emerge on House FAA Overhaul

Blog Articles · Feb 15, 2016 · Budget and Spending

Last week, the House Transportation and Infrastructure Committee marked up the Aviation, Innovation, Reform, and Reauthorization (AIRR) Act (H.R. 4441), a 273-page piece of legislation to reauthorize and make changes to the Federal Aviation Administration (FAA).

A major provision of the AIRR Act (Title II) removes the Air Traffic Organization (ATO) from the FAA and establishes a non-profit corporation, called the ATC Corporation, to provide Air Traffic Control services.

Understandably, many conservatives are eager to privatize our nation's air traffic control system. But, concerns have arisen that this attempt would instead create an organization similar to other government-sponsored enterprises that keep taxpayers on the hook for serious missteps.

Beyond the structure of the new entity, there are several other conservative concerns:


As written, the bill would transfer the responsibility for collecting fees and expending funds to the new corporation, removing certain spending from the discretionary appropriations process. This transition would occur in 2019.

However, this transition contains downstream effects, particularly as it impacts recent budget agreements, that must be addressed. According to The Heritage Foundation's Michael Sargent,

"Because discretionary budget caps, as mandated in the Budget Control Act, remain in place in 2020 and 2021, the transfer of these expenditures out of the discretionary budget would allow appropriators to spend roughly $25 billion more over these two years and remain under the caps, even though overall spending would increase. As such, it would be prudent and within the intention of the budget caps to adjust the caps downward to reflect the reclassification of ATC spending."

In light of the federal government's out of control spending and the current fight on the GOP budget, conservatives must scrutinize every dollar that the government might spend, or save.

To be clear, the AIRR Act will create a $25 billion carve-out in the BCA caps, allowing appropriators room to spend more taxpayer dollars than either the BCA or subsequent budget cap legislation envisioned. These caps must be adjusted down before conservatives can consider the other merits or demerits of any FAA reauthorization proposal.

Double Taxation

The House Ways and Means Committee still needs to report legislation to ensure that we don't end up with, in effect, the double taxation of our federal aviation system. If they don't, the new ATC Corporation will begin levying fees on passengers who are still being forced to pay federal taxes to the Airport and Airway Trust Fund.

Subsidies, Mandates and Carve Outs

The bill also authorizes over $2 billion to be spent on the Essential Air Service, a taxpayer subsidy for rural air passengers which Heritage has long argued should be discontinued. Additionally, the bill increases funding for Airport Improvement Grants, authorizing spending to the tune of over $26 billion on these grants over six years.

And it includes bizarre carve outs. A prohibition on making in-flight cell phone calls is a classic example of government overreach and entirely unnecessary as these decision should be left to airlines and passengers. Other various non-safety requirements would be placed on any airport receiving federal money. An FAA technical facility in New Jersey, which Politico notes is the home to the "chairman of the aviation subcommittee" would be protected. It is also worth noting that the state of Alaska received huge, state-specific concessions that suggest an element of favoritism for some rural communities and not others.

Next Steps

Conservatives are looking for the following actions as the debate moves forward: 1) a final score needs to be issued by the Congressional Budget Office; 2) the Budget Committee should ensure that the BCA caps in 2020 and 2021 are adjusted down before this legislation comes to the floor; 3) the Ways and Means must report their tax-reducing portion of the bill; and 4) the Rules Committee must allow an open amendment process so other conservative amendments to reduce additional spending, increasing individual freedom, remove crony provisions, allow commercial pilots to continue to concealed-carry, and other priorities receive a vote.

Heritage Action will be following the developments with the AIRR Act closely and strongly encourages Congress to eliminate the burdensome bureaucratic control of our nation's aviation system by moving towards true privatization, reduced federal spending, and lower taxes.