[House Hearing, 106 Congress]
[From the U.S. Government Publishing Office]



 
  DEPARTMENT OF TRANSPORTATION AND RELATED AGENCIES APPROPRIATIONS FOR 2000

_______________________________________________________________________

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                       ONE HUNDRED SIXTH CONGRESS
                              FIRST SESSION
                                ________
 SUBCOMMITTEE ON THE DEPARTMENT OF TRANSPORTATION AND RELATED AGENCIES 
                             APPROPRIATIONS

                    FRANK R. WOLF, Virginia, Chairman
 TOM DeLAY, Texas              MARTIN OLAV SABO, Minnesota
 RALPH REGULA, Ohio            JOHN W. OLVER, Massachusetts
 HAROLD ROGERS, Kentucky       ED PASTOR, Arizona
 RON PACKARD, California       CAROLYN C. KILPATRICK, Michigan
 SONNY CALLAHAN, Alabama       JOSE E. SERRANO, New York
 TODD TIAHRT, Kansas           JAMES E. CLYBURN, South Carolina
 ROBERT B. ADERHOLT, Alabama
 KAY GRANGER, Texas                 

 NOTE: Under Committee Rules, Mr. Young, as Chairman of the Full 
Committee, and Mr. Obey, as Ranking Minority Member of the Full 
Committee, are authorized to sit as Members of all Subcommittees.
 John T. Blazey II, Richard E. Efford, Stephanie K. Gupta, and Linda J. 
                        Muir, Subcommittee Staff
                                ________

                                 PART 6
                                                                   Page
 AIR TRAFFIC CONTROL MODERNIZATION................................  107
 AVIATION FINANCING...............................................    1
 AVIATION SAFETY AND SECURITY.....................................  195
 DEPARTMENT OF TRANSPORTATION:

   Federal Aviation Administration................................  380
 RELATED AGENCY:

   National Transportation Safety Board...........................  935
                                ________
         Printed for the use of the Committee on Appropriations
                                ________

                     U.S. GOVERNMENT PRINTING OFFICE
 60-397                     WASHINGTON : 2000



                        COMMITTEE ON APPROPRIATIONS

                   C. W. BILL YOUNG, Florida, Chairman

 RALPH REGULA, Ohio                   DAVID R. OBEY, Wisconsin
 JERRY LEWIS, California              JOHN P. MURTHA, Pennsylvania
 JOHN EDWARD PORTER, Illinois         NORMAN D. DICKS, Washington
 HAROLD ROGERS, Kentucky              MARTIN OLAV SABO, Minnesota
 JOE SKEEN, New Mexico                JULIAN C. DIXON, California
 FRANK R. WOLF, Virginia              STENY H. HOYER, Maryland
 TOM DeLAY, Texas                     ALAN B. MOLLOHAN, West Virginia
 JIM KOLBE, Arizona                   MARCY KAPTUR, Ohio
 RON PACKARD, California              NANCY PELOSI, California
 SONNY CALLAHAN, Alabama              PETER J. VISCLOSKY, Indiana
 JAMES T. WALSH, New York             NITA M. LOWEY, New York
 CHARLES H. TAYLOR, North Carolina    JOSE E. SERRANO, New York
 DAVID L. HOBSON, Ohio                ROSA L. DeLAURO, Connecticut
 ERNEST J. ISTOOK, Jr., Oklahoma      JAMES P. MORAN, Virginia
 HENRY BONILLA, Texas                 JOHN W. OLVER, Massachusetts
 JOE KNOLLENBERG, Michigan            ED PASTOR, Arizona
 DAN MILLER, Florida                  CARRIE P. MEEK, Florida
 JAY DICKEY, Arkansas                 DAVID E. PRICE, North Carolina
 JACK KINGSTON, Georgia               CHET EDWARDS, Texas
 RODNEY P. FRELINGHUYSEN, New Jersey  ROBERT E. ``BUD'' CRAMER, Jr.,
 ROGER F. WICKER, Mississippi           Alabama
 MICHAEL P. FORBES, New York          JAMES E. CLYBURN, South Carolina
 GEORGE R. NETHERCUTT, Jr.,           MAURICE D. HINCHEY, New York
   Washington                         LUCILLE ROYBAL-ALLARD, California
 RANDY ``DUKE'' CUNNINGHAM,           SAM FARR, California
   California                         JESSE L. JACKSON, Jr., Illinois
 TODD TIAHRT, Kansas                  CAROLYN C. KILPATRICK, Michigan
 ZACH WAMP, Tennessee                 ALLEN BOYD, Florida
 TOM LATHAM, Iowa
 ANNE M. NORTHUP, Kentucky
 ROBERT B. ADERHOLT, Alabama
 JO ANN EMERSON, Missouri
 JOHN E. SUNUNU, New Hampshire
 KAY GRANGER, Texas
 JOHN E. PETERSON, Pennsylvania     

                 James W. Dyer, Clerk and Staff Director

                                  (ii)


 DEPARTMENT OF TRANSPORTATION AND RELATED AGENCIES APPROPRIATIONS FOR 
                                  2000

                              ----------                              

                                            Tuesday, March 9, 1999.

                           AVIATION FINANCING

                          PANEL ONE WITNESSES

                  U.S. GENERAL ACCOUNTING OFFICE (GAO)

SUSAN J. IRVING, ASSOCIATE DIRECTOR, BUDGET ISSUES, ACCOUNTING AND 
    INFORMATION MANAGEMENT DIVISION, GAO
SUSAN A. POLING, ASSOCIATE GENERAL COUNSEL, GAO
GERALD DILLINGHAM, TRANSPORTATION ISSUES GROUP, GAO

                U.S. DEPARTMENT OF TRANSPORTATION (DOT)

KENNETH M. MEAD, INSPECTOR GENERAL, DOT
ALEXIS STEFANI, DEPUTY ASSISTANT INSPECTOR GENERAL FOR AVIATION, DOT

                          PANEL TWO WITNESSES

                   U.S. DEPARTMENT OF TRANSPORTATION

JANE F. GARVEY, ADMINISTRATOR, FEDERAL AVIATION ADMINISTRATION
MONTE R. BELGER, DEPUTY ADMINISTRATOR (ACTING), FEDERAL AVIATION 
    ADMINISTRATION
PETER ``JACK'' BASSO, JR., ASSISTANT SECRETARY FOR BUDGET AND PROGRAMS, 
    AND CHIEF FINANCIAL OFFICER, OFFICE OF THE SECRETARY

                            Opening Remarks

    Mr. Wolf. Good morning. Some people are stuck in traffic 
because of accidents and the snow, so some will be late, but we 
will begin. We are going to go straight into the afternoon. 
There is a Republican caucus at 3:00 and the House has votes at 
2:30, so we will break for a brief period of time, maybe 15 or 
20 minutes, and then take the second afternoon session and move 
straight through.
    A few years ago, when DOT was proposing a government 
corporation for air traffic control, a Member of the House 
wrote me a letter in which he said, ``Hang in there. Do not let 
them do an end-run through the appropriations process or the 
budget process on this whacky idea of corporatizing air traffic 
control.'' He said what the FAA needed was freedom from 
personnel and procurement rules, flexibility in contract 
management, and independence from the Department of 
Transportation. He said if the FAA got these reforms the agency 
``will do just fine''.
    Later that year, this committee approved, on a bipartisan 
basis, far-reaching personnel and procurement reforms for the 
FAA which gave them three of the four things mentioned. Yet 
even with these reforms, four years later the agency is not 
doing fine, and we have a new assault this year to remove the 
agency's funding from annual budget and appropriations control.
    I am concerned that these proposals would upset the 
delicate funding balance we have to make every year among DOT's 
various programs and would lessen the annual congressional 
oversight over aviation safety and air traffic control 
programs. I do not believe there is any way to raise aviation 
spending in a permanent manner where it does not rebound to the 
detriment of the Coast Guard and Amtrak as well as smaller 
organizations like the NTSB, the Office of the Secretary, the 
Office of Inspector General, and others.
    I also wonder where cost control will come from if the 
agency's budget is increased and protected by Congressional 
decree for the next 5 years and a discretionary appropriation 
for the general fund is made mandatory. While it might be hard 
to fault advocates of this additional spending for such an 
approach, I wonder why we would do that for any federal agency. 
FAA has problems controlling costs with their existing budget 
and the question is, would it get any better if there was less 
review?
    Let me now recognize Mr. Sabo for any opening comments. 
Then we will go directly to the panel.
    Mr. Sabo. I agree with the chairman and look forward to 
hearing the testimony.
    Mr. Wolf. Any comments, Ms. Kilpatrick? Ms. Granger?
    [There were none].

                       Introduction of Witnesses

    Let us begin with Ms. Irving from the U.S. General 
Accounting Office; Ms. Poling, Associate General Counsel, U.S. 
General Accounting Office, also Mr. Dillingham of the GAO's 
Transportation Issues Group; and Mr. Mead, the Inspector 
General.
    Then we will go to panel two: Ms. Garvey and Monte Belger 
from the Federal Aviation Administration; and Mr. Basso, 
Assistant Secretary for Budget and Programs of the Department 
of Transportation.

                         GAO Opening statement

    Mr. Wolf. Welcome to the Committee.
    Ms. Irving. Thank you, sir.
    Mr. Chairman, Mr. Sabo, other members, it is a pleasure to 
be asked to come talk about what some people consider to be 
arcania of budget structure and enforcement.
    As the chairman noted, I am accompanied today by Gerald 
Dillingham, who, as Associate Director for Transportation, 
oversees much of our aviation work; and by Susan Poling, who is 
the Associate General Counsel able to answer questions about 
the recent legal opinion we issued to you.

                            budget structure

    In my written statement, which I would ask be included in 
the record in its entirety, I talk a little bit about the 
budget structure, especially how trust funds fit into that 
structure; about the discretionary spending outlook and 
enforcement regime you face despite the advent of a surplus; 
and about possible implications of some alternative changes in 
aviation financing. Today I will touch briefly on each of those 
points, and then we will be happy to answer questions in any 
area you wish to pursue.
    The unified budget was created in 1969 so that Congress, 
the President, and analysts could look at the role of the 
Federal Government in total. It does not really matter whether 
the tax you send to the Federal Government is labeled FICA, 
income tax, or any other tax. The fact is that it leaves your 
wallet or the corporate wallet and comes into the Federal 
Government for use for priorities we as a nation have chosen to 
allocate. The idea behind the unified budget was that we should 
have a place to look at the Federal Government's competition in 
private capital markets with the private sector.
    The unified budget then is divided into two broad 
categories: Federal funds and trust funds. But this is just one 
of the many places where English words in the budget mean 
something different than in everyday discourse. The vast 
majority of government trust funds are not trust funds as the 
word is used in the private sector or in your own family. The 
government is not a trustee with a fiduciary responsibility to 
a beneficiary. For the vast majority of Federal trust funds, 
the government owns the assets; controls unilaterally both the 
revenue to that trust fund, the spending from that trust fund, 
and may unilaterally change revenue, spending, or purposes of 
any trust fund.
    Indeed, if you started to take apart the unified budget, 
under the label ``Federal funds,'' you would find something 
called ``special funds.'' Special funds walk, talk, and quack 
just like trust funds, but they do not have the word ``trust'' 
in the legislation that created them. Both trust funds and 
special funds are budget accounts through which appropriators 
and OMB track the receipt and spending of earmarked receipts.
    The Budget Enforcement Act, as all of you know only too 
well, divided all the world into two pots: mandatory spending, 
which flows directly from the structure of the authorization 
law and which is allowed to grow; and appropriated spending, 
also called discretionary, which is limited by specified dollar 
caps under which all of you must come. That enforcement regime 
did not end when the deficit went away. Indeed, it has become 
very tight.
    It seems a little silly to say this in front of 
appropriators who are facing this in very real terms, but if 
you took fiscal year 1999 appropriated levels and assumed that 
none of the emergencies enacted at the end of the year would be 
continued as non-emergencies, you would be $10 billion over the 
fiscal year 2000 budget authority caps and $13 billion over 
your outlay caps.
    There is a picture in my testimony that shows 3 lines: the 
caps, the fiscal year 1999 freeze level, and 1999 real 
resources. If you stick with the caps through the year 2002, 
discretionary spending will have fallen in real terms by 7 
percent from 1999. I do not envy your task.
    You asked me to address, however briefly, some questions 
about changes in aviation finance somewhat analogous to some of 
the changes made last year for the other transportation funds.

                       Transportation Trust Funds

    When the transportation trust funds were created, Congress 
did not create them as automatic spending trust funds. It chose 
to retain annual oversight and control of spending from those 
funds in the appropriations committee. Therefore, when the 
Budget Enforcement Act was created, these trust funds fell on 
the discretionary side of the ledger and spending from 
transportation trust funds competes with spending from all 
other funds under the discretionary caps.
    In thinking about analogies between aviation and highways 
and mass transit, I think it is very important to think about 
where the analogies fit and where they do not fit. I will talk 
solely in budget and financing terms because I am not an expert 
in the management and financial control of those agencies.
    All highway programs, or almost all, are essentially 
managed in the Department of Transportation and have been 
funded by the Highway account of the Highway Trust Fund. Mass 
transit is also largely located in the Department of 
Transportation but it is funded by a combination of money from 
the mass transit account in the Highway Trust Fund and from 
general funds.
    TEA 21 gave both of those programs mandatory minimum 
spending levels. In highways, it was a guaranteed draw on the 
trust fund receipts, but no guaranteed draw on general funds. 
For mass transit, it was a guaranteed minimum spending level to 
be financed by a combination of funds from the mass transit 
account and from general funds.
    Aviation, of course, has both similarities and differences. 
Unlike either highways or mass transit, aviation is an activity 
not solely controlled by an entity of the Department of 
Transportation. Although, the FAA is the dominant player in 
aviation, both DOD and NASA engage in a fair amount of aviation 
support. They are, of course, funded through their general fund 
appropriations through a different subcommittee.
    Even the FAA has historically been funded by a combination 
of revenues from the Airport and Airway Trust Fund and general 
fund appropriations. Again, my testimony contains a chart 
showing that although the general fund support for FAA has 
varied, it has never been zero. So when people talk about 
changes, to figure out the budget impact of those changes 
requires describing precisely what the proposed change is. Is 
the proposal to carve out a specified guaranteed minimum 
funding level? If so, need that minimum funding level be carved 
out of the existing caps, in which case all other discretionary 
spending will compete for a smaller share and you have 
guaranteed aviation its share? Or will it be over and above the 
caps, in which case all other discretionary spending will 
compete for a different number and total spending goes up? If 
total spending goes up, the surplus falls.
    This year, the entire surplus is due to the Social Security 
surplus, so the on-budget deficit grows. Fundamentally, like 
all budgeting, this is a debate about priorities and which 
areas of spending you wish to guarantee certain funding, and I 
would defer to you all on that issue.
    That concludes my statement.
    [The prepared statement of Susan Irving follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                  Inspector General Opening Statement

    Mr. Wolf. Mr. Mead.
    Mr. Mead. Thank you Mr. Chairman, members of the 
subcommittee, Administrator Garvey.
    Mr. Chairman, I am going to speak to the issue of FAA 
financing and cost control. I want to introduce my colleague, 
Ms. Alexis Stefani. She is our Deputy Assistant Inspector 
General for Aviation.
    FAA's budget increased about 70 percent from fiscal year 
1998 to fiscal year 1999; and based on FAA's estimates, the 
budget is headed towards about $12 billion by 2004. My 
statement today is going to address the financing of FAA, its 
operations costs and their implications for other agency 
functions and actions needed to improve financial management 
and accountability so that FAA can better control its costs.

                        faa financing proposals

    First, financing. Various proposals have recommended more 
funding for FAA, principally by seeking alternative means or 
techniques of financing the agency. Those include shielding FAA 
from discretionary spending caps, creating budgetary firewalls 
that guarantee FAA access to all revenue generated by the 
Aviation Trust Fund, thereby linking aviation revenue to 
aviation spending.
    Presumably, and I stress ``presumably,'' FAA would still be 
subject to the appropriations process, but the dollars 
appropriated would not have to compete with funding demands for 
other agencies within the budget function, such as Amtrak and 
the U.S. Coast Guard. Based on the administration's proposed 
revenue and expenditure levels, and I stress ``the 
administration's proposed expenditure levels,'' we estimate 
that FAA would be able to meet its annual budgetary 
requirements at least through fiscal year 2004 without user 
fees, without an increase in taxes or a contribution from the 
general fund if it had access to all trust fund revenue, 
interest and the so-called uncommitted carry-over balance.

                     aviation trust fund shortfall

    You are going to hear a lot in the coming months about the 
uncommitted carry-over balance of the surplus in the trust 
fund. An important reason why that balance is where it is 
today--and it is about $4.3 billion--is because the general 
fund, or non-aviation taxes, have covered an average of about 
30 percent of FAA's budget over the past 3 years and even 
previously. However, without access to the uncommitted carry-
over balance or interest earned on that trust fund, FAA will 
not meet its budgetary requirements as early as next year 
because its expenditures would exceed the trust fund revenues 
by nearly $1 billion. They take in about $9.3 billion. So a 
budget that is more than that must get the additional money 
from some other source.
    Now, that shortfall will be considerably larger should 
Congress adopt proposals to fund F&E and the airport 
improvement program at levels higher than the administration's 
estimates. In that case, FAA would have to continue to receive 
contributions from the general fund, request an increase in 
taxes, impose user fees or some combination of those three 
funding sources.
    Today, on a $200 ticket, taxes and passenger facility 
charges already are as much as $36, or 18 percent of the price 
of the ticket.

                          faa operations costs

    I would like to move to operations costs. Regardless of the 
method and mix chosen by Congress to finance FAA, the agency 
must do more to control operations costs, which are 
predominantly payroll. FAA's budget requirements continue to 
increase, largely due to the rising cost in the operations 
account.
    Now, as shown on this chart, I really want to make two 
points.
    The first one is that operations costs, which is the blue 
line, have risen steadily from about $3 billion in 1988 to an 
estimated level of $7.6 billion in 2004.
    Second is that the growth in operations is taking a greater 
share of FAA's total budget. Just as an example, facilities and 
equipment; that is, the air traffic control modernization 
account, the yellow line on the chart, has declined from about 
$2.4 billion in 1992 to about $2 billion in 1999.
    Payroll costs are going to increase further as a result of 
the new pay system for the controllers. That system will 
require about a billion dollars in additional funding over the 
next few years. Those additional costs take into account 
productivity gains that FAA was able to quantify, like savings 
from reducing the number of controller supervisors. But other 
cost savings, like reducing overtime by better matching 
controller staffing, have not been quantified, and they need to 
be. It is not clear whether these productivity gains would 
reduce the estimated $7.6 billion in out-year operations costs 
or merely keep them from going higher into the $8 billion 
range.
    Due to budget constraints and rising costs of operations, 
other programs have seen their funding levels reduced or held 
relatively constant. Operations cost increases have begun 
crowding out other agency functions, as shown on this chart, 
comparing the period 1990 through 1999 with the 
administration's projected budgets for the period 2000 through 
2004. Four points:
    First, operations is projected to grow from 54 percent of 
FAA's total budget to nearly 61 percent. That is represented by 
the bars on the left. The facilities and equipment account, 
which is the air traffic control modernization source, is 
projected to decrease slightly, from 24 to 23 percent of the 
total budget. In 1992, that account represented about 27 
percent of the total pie. Third, the airport program, that is 
the AIP, is projected to decrease; and, fourth, R&D is 
projected to remain at around two percent.
    Funds for modernization efforts are further crowded out by 
other factors that have very little to do with operations, and 
they are the schedule slippages and large multi-million-dollar 
cost increases. Those costs have to come from F&E funds; the 
funds that would otherwise be scheduled for other projects.

                faa financial management accountability

    Finally, I would like to speak to improving financial 
management accountability at FAA. FAA is well aware of this 
problem and working hard to address this need. However, FAA 
needs some basic tools, as would any other performance-based 
organization with an annual budget of over $10 billion.
    First, it needs good financial data and reports. We have 
been unable to provide FAA a clean opinion because of 
weaknesses in its accounting systems.
    Just as one example, its equipment for air traffic control 
modernization is probably $10 billion understated, at least in 
that neighborhood. Second, it needs a reliable cost accounting 
system to manage its affairs. Also, you cannot have cost-based 
user fees until you have a cost accounting system. The 
administration's budget for fiscal year 2000 assumes about $1.5 
billion in user fees.

                  vote for closed session on security

    Mr. Wolf. Excuse me. We are going to have a vote to close 
in order to accommodate Mr. Callahan's schedule, so excuse me 
for interrupting, since we have nine members here.
    Tomorrow, the Subcommittee intends to receive information 
from the FAA and the Inspector General regarding recent tests 
of security systems at our nation's airports. According to the 
FAA, disclosure of these specific activities and test results 
would endanger the national security. Therefore, it is 
necessary that a portion of the hearing tomorrow with the FAA, 
March 10, be closed to the public. This closed session will be 
brief, but it will be the first order of business when the 
subcommittee reconvenes at 10 a.m. tomorrow.
    We will follow the closed session immediately with an open 
session in which we will receive unclassified testimony. For 
this reason, I move that a portion of the aviation safety and 
security hearing relating to national security matters 
scheduled for March 10, 1999 be closed in conformance with 
clause 2(g) Rule XI. Is there a second to the motion?
    There is a second. The staff will call the roll.
    The Clerk. Mr. Young.
    [No response.]
    The Clerk. Mr. DeLay.
    [No response.]
    The Clerk. Mr. Regula.
    [No response.]
    The Clerk. Mr. Rogers.
    [No response.]
    The Clerk. Mr. Packard.
    Mr. Packard. Aye.
    The Clerk. Mr. Callahan.
    Mr. Callahan. Aye.
    The Clerk. Mr. Tiahrt.
    [No response.]
    The Clerk. Mr. Aderholt.
    Mr. Aderholt. Aye.
    The Clerk. Ms. Granger.
    Ms. Granger. Aye.
    The Clerk. Mr. Sabo.
    Mr. Sabo. Aye.
    The Clerk. Mr. Olver.
    Mr. Olver. Aye.
    The Clerk. Mr. Pastor.
    [No response.]
    The Clerk. Ms. Kilpatrick.
    Ms. Kilpatrick. Aye.
    The Clerk. Mr. Serrano.
    Mr. Serrano. Aye.
    The Clerk. Mr. Clyburn.
    Mr. Clyburn. Aye.
    The Clerk. Mr. Obey.
    [No response.]
    The Clerk. Mr. Wolf.
    Mr. Wolf. Aye.
    Thank you very much. There were ten ``ayes'' and no 
``nays'', so the hearing is ordered closed. I appreciate the 
members coming.
    You can continue, Mr. Mead.

                               user fees

    Mr. Mead. Actually, that interruption comes at a good 
point. Because in the coming months, you are going to hear a 
great deal about user fees at FAA, and the point I want to make 
here is you need a cost accounting system to do that, at least 
if the user fees are going to have some correlation to cost.
    Now, you are going to need a cost accounting system anyway 
just to manage your affairs. So whether or not you go towards 
user fees, you still need a cost accounting system.
    But there are four ingredients that will be needed before 
you will be able to seriously consider user fees. The first, of 
course, is a cost accounting system. The second is accurate 
financial data going in and going out. If you do not have that, 
you can have the best accounting system in the world and there 
is not going to be much point. Third, you need an equitable 
allocation of cost. That is particularly true if you are going 
to be sending users bills. Users are going to want to know 
whether their allocation is fair. And, finally, you are going 
to need a clean audit opinion. We do not have these in place at 
the present time. As I said, FAA is working hard to correct the 
situation.

                          faa personnel reform

    And, finally, personnel reform granted the FAA flexibility 
in creating a human-resource system that would fit its unique 
needs. FAA use this flexibility in creating new compensation 
systems. But the effectiveness of that system now depends on 
improving organizational, and individual performance, and 
accountability.
    I would just like to close with a parenthetical on that. 
The administrator will have to make a number of difficult, and 
probably unpopular, decisions over the course of the months and 
years ahead, and I just think we all should recognize that. It 
is a difficult position.
    Mr. Chairman, that concludes my statement.
    Mr. Wolf. I thank you very much.
    [The prepared statement of Kenneth M. Mead follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                       off-budget--gao's position

    Mr. Wolf. Ms. Irving, in 1995, GAO wrote to the Committee 
and said, ``Except when the activity in question is owned and 
controlled by private parties, there are no differences between 
the activities of off-budget programs and those programs which 
are included in the budget. Therefore, we have taken the 
position that excluding the program's receipts and outlays from 
the budget total is normally undesirable and sets a precedent 
for the exclusion of other programs.''
    Would you explain this position to the subcommittee today?
    Ms. Irving. Yes, sir. As I mentioned in my oral statement, 
the unified budget was created with the idea that we should see 
everything the Federal Government does as a government; where 
it takes money out of the private sector and uses it 
collectively; that labeling something ``off-budget'' does not 
change the fact that it is a federal activity. Therefore, if it 
is not subject to market competition, and if the Federal 
Government is using its taxing power and then deciding how to 
spend the money, the activity should be shown in the budget.

                   number of trust and special funds

    Mr. Wolf. How many trust and special funds are there in the 
federal budget?
    Ms. Irving. There are over 100; in 1997 OMB reported 110 
trust funds. There are more than 200 special funds.

             Trust Funds--Private Sector vs. Public sector

    Mr. Wolf. How are the transportation trust funds different 
from fiduciary trust funds in the private sector?
    Ms. Irving. In the fiduciary trust fund, the trust document 
sets up quite strict rules. The trustee manages the assets of 
the trust fund with a fiduciary obligation for the sole benefit 
of the designated beneficiary, and the trustee cannot change 
the terms and conditions of the trust fund. With the exception 
of funds like the Tribal Trust Funds, there are few fiduciary 
trust funds in the Federal Government. For the overwhelming 
majority of federal trust funds, the word ``trust'' is a label; 
it is a way of tracking revenues. The Federal Government may 
unilaterally, through legislation, change the terms and 
conditions of any nonfiduciary trust fund.
    Mr. Wolf. It has been claimed that the transportation trust 
funds are so different from other federal trust funds that one 
should be able to make the distinction between setting the 
transportation funds apart from the regular budget process and 
not allowing the other funds to do the same. You have studied 
the characteristics of trust funds government-wide. Are the 
transportation trust funds sufficiently different from other 
trust funds to make a strong case that they alone should 
receive special budgetary treatment?
    Ms. Irving. Mr. Wolf, I wish that were a simple yes-or-no 
question. We have begun to look more exhaustively at trust 
funds in the budget. There are a number of trust funds that are 
what you might consider user-financed. I would suggest the 
Social Security trust fund thinks of itself as user-financed, 
and Medicare. Social Security is off-budget and Medicare is 
not. The hazardous waste Superfund trust fund is clearly user-
financed and is clearly kept under the caps.
    I think this is a matter of gradations and, again, a 
decision about whether it looks different enough to Members of 
Congress to set it aside. It did not when it was created.
    Mr. Wolf. I understand that the chairman of the House 
Resources Committee has begun advocating that the Land and 
Water Conservation fund be taken off budget. Is that fund 
similar to the aviation trust fund?
    Ms. Irving. I do not know the details of that fund, sir. I 
could get it for you.
    [The information follows:]

    The Land and Water Conservation Fund is a special fund, not 
a trust fund like the Aviation trust fund. Special fund 
collections must be appropriated before they can be obligated 
and spent. In that sense it is similar to the aviation trust 
fund, the spending from which is also controlled through the 
appropriations process. The Land and Water Conservation Fund 
was established by the Land and Water Conservation Fund Act of 
1965 principally to support land acquisition and state outdoor 
recreation and conservation grants. Receipts deposited in the 
Fund include rent and royalty receipts from the Outer 
Continental Shelf lands, the motorboat fuel tax, and surplus 
property sales receipts. At the end of fiscal year 1998, the 
fund balance was $11.8 billion.

                             special funds

    Mr. Wolf. Along with trust funds, the federal budget 
includes a number of so-called special funds. What are these 
funds, and would their sponsors also be able to claim the need 
for special treatment in the budget process?
    Ms. Irving. I would like to give you a fuller answer for 
the record, but essentially special funds are funds that 
receive earmarked receipts that just do not happen to have the 
word ``trust'' in the legislation that created them.
    Mr. Wolf. So they could make the same argument then?
    From the standpoint of overall government spending, does it 
make any difference whether or not increased spending comes 
from a trust fund?
    Ms. Irving. No, sir.

                      discretionary spending caps

    Mr. Wolf. We have heard a lot about how tight the 
discretionary spending caps are this year. Would you summarize 
the current status of the discretionary caps for next year?
    Ms. Irving. The discretionary caps for fiscal year 2000 
require you to cut appropriations below the fiscal year 1999 
freeze level.
    Mr. Wolf. Isn't it true that under existing law all 
discretionary spending in fiscal year 2000, including defense, 
foreign aid, domestic spending, is competing against each other 
for budgetary resources with the only exception being the 
relatively small highway and transit programs?
    Ms. Irving. In a large part yes, sir. There is a separate 
cap for what is called the Violent Crime Reduction trust fund.

                            firewalls effect

    Mr. Wolf. If we continue to add even more firewalls, aren't 
we contributing to a fragmentation of the budget when smaller 
and smaller activities are walled off from others?
    Ms. Irving. The nature of creating separate categories is 
to increasingly Balkanize the budget.
    Mr. Wolf. I am going to end with that and recognize Mr. 
Sabo. But before I do, let me make a comment. We in the House, 
on the Republican side, are term limited with regard to 
chairmanship of subcommittees. I saw Mr. Callahan there. My 
hope is that in the next Congress I will be chairman of the 
Foreign Operations Subcommittee. In fact, I was even tempted 
this year to go that way.
    We get tied up into jurisdictions and committee turf, but 
these are very serious issues. And it looks like the spending 
caps are going to stay in place. Senator Daschle last week said 
that he under no circumstances wanted to see them go. It looks 
like from our side that is going to be the case.
    My sense is, and I want this to be clear, I think what you 
have here, particularly with the Highway Trust Fund, is that 
you get some powerful interests, very powerful lobbyists who 
move this thing, and sometimes it is called pork and sometimes 
it is called a lot of good projects; it just depends on the eye 
of the beholder.
    I was in Kosovo 2 weeks ago and we talked to the troops on 
the Macedonia border. They have had two and three deployments. 
They are never home with their families. If we have got to do 
anything, we ought to be putting money there. It seems that not 
many people are joining the military, and those who join the 
military, who are away from their families, ought to have the 
same respect that a highway demonstration project has in 
somebody's district. And they tell me they stand at the 
telephones and they listen to one another talk to the wife back 
home saying why can't you be here? We have sent people to 
Bosnia twice, Haiti, Desert Storm, Desert Shield, Somalia. They 
are never home.
    So I do not see the clamor with regard to taking care of 
the troops and, defense is in the Constitution. The troops on 
the Macedonia border do not have a high-paid lobbyist in town 
to represent them, to represent the poor. And 25 million people 
go to bed hungry in this country every single night--four 
million of them are children--now, those poor children have no 
lobbyists who come in and lobby with regard to taking care of 
the poor.
    And if you look at Matthew 25, Jesus talks about taking 
care of the poor and the hungry and naked and those who are 
sick. There are no lobbyists for the poor. Just like the poor 
trooper on the border has no lobbyist, the poor have no 
lobbyists. But those who want more spending, for instance, in 
the last Congress for the Highway Trust Fund, not only had 
lobbyists, they had powerful lobbyists. They had political 
action committees. They pushed this process to a point where 
there was a stampede.
    And my sense is that if you are going to keep the spending 
caps, the poor, the disadvantaged, and the troops that we are 
sending overseas, whether it be Kosovo or Bosnia or Herzegovina 
or Haiti or wherever they are, are going to be stuck and they 
are going to be paying a tremendous price. And the seeds that 
we are planting, the fruits will be destroyed and there will be 
many, many other difficult times.
    Having said that, let me recognize Mr. Sabo, who was the 
chairman of the Budget Committee and who understands this 
issue, frankly, a lot better than even I understand it.

                    general fund share of operations

    Mr. Sabo. Thank you, Mr. Chairman. And I share your view on 
what we should do with on and off budget. I think we should 
keep them on budget, and I thought we made a serious mistake 
last year. But that is even further complicated as it relates 
to the FAA fund.
    Have either of you done any study on the operations of FAA 
and what we accurately allocate to the Aviation Trust Fund for 
operations of the FAA? Last year it was sort of a unique year 
because this bill was finally settled, and in the big 
supplemental at the end, a significant part of that operational 
funding came from the Aviation Trust Fund.
    In other years, this Committee has been stymied, and I am 
just curious if you have looked at it. I heard the figure that 
an 85 percent figure would be fair in operations, so I am just 
curious, have you looked at it?
    Mr. Mead. There is quite a bit of dispute about that. I 
think if you ask five or six different people, you would get 
five or six different answers.
    There is a dispute, for example, on the Department of 
Defense share. It was thought at one time that DoD's share was 
around 10 or 15 percent. I can tell you that a very respected 
person at the Defense Department, who is now deceased, 
contended that actually they did quite a bit of work for FAA 
and their share was not 15 percent; that in fact, they ought to 
get a credit.
    There have been a number of studies done on general 
aviation, and the theory is that the general fund should 
contribute to FAA's operations because general aviation does 
not pay its full share. There is a further distinction between 
business jets and regular private jets. There is no clear-cut 
answer.
    Ms. Irving. Mr. Sabo, as part of our legal opinion--and Ms. 
Poling can discuss this--that the office issued on the legal 
constraints on the use of the Airport and Airway Trust Fund, I 
believe they included some historical information on shares of 
FAA financing.
    Ms. Poling. Yes. Table 3 to the legal opinion--I am not 
sure you have that before you, but it lists from 1970 through 
fiscal year 1998 the proportion for FAA operations that came 
from the trust fund and the proportion that came from the 
general fund. When we look at the figures over 29 years, the 
average general fund contribution to FAA operations is 73 
percent. In the last 5 years it has changed a little bit: it is 
55.6 percent. Over the whole 29-year history, it averages 79 
percent.
    Mr. Sabo. We hear a great deal about surplus in this fund. 
If, let's say, they paid 85 percent of operations over this 
period of time, what would be the surplus in the fund?
    Ms. Irving. I am not sure there would be a surplus.
    Mr. Mead. There would not be a surplus.
    Mr. Sabo. Thank you.
    Thank you, Mr. Chairman.
    Mr. Wolf. Thank you, Mr. Sabo.
    Mr. Packard.

                         modernization funding

    Mr. Packard. Thank you, Mr. Chairman.
    I served 16 years ago on the Aviation Subcommittee of what 
was then the Public Works Committee, and I have not seen any 
major change or even greater emphasis on modernization. It was 
emphasized then. We have emphasized it for 16 years, but it has 
been verbal emphasis and no real commitment.
    I know that we are going to be talking about that this 
afternoon in the hearing, but I would like to know, what kind 
of funding are you proposing toward modernization, and is it 
different than what we have found in the past?
    Mr. Mead. Remember, the Inspector General does not propose 
these budgets. I am basically reporting on decisions, 
proposals, recommendations by others.
    Here is a frame of reference: In 1992, the facilities and 
equipment appropriation, or that account, was appropriated $2.4 
billion. In 1999, that same account was appropriated $2.1 
billion. Under the administration's projections in 2004, it 
would be $2.9 billion. So, over the years, that is not a very 
big increase, particularly when you compare it to the growth in 
the operations account.
    Mr. Packard. Will the technology improvements proceed 
without a funding level that would encourage, enhance and pay 
for the technical advances that need to be made in order to 
upgrade?
    Mr. Mead. Some of them would. But, of course, if you have a 
constraint in spending, all your projects cannot move forward. 
In addition to that, some of the projects that we will be 
speaking of this afternoon in the multi-billion-dollar category 
are experiencing cost increases and schedule slippages, and 
money has not been a factor. It would be patently unfair to 
point to budgetary constraints as the reasons for the 
difficulties in STARS and WAAS.
    Mr. Packard. It is obvious to me that it has not been a 
real high priority, and thus it has been pushed each year into 
the background to where we do not fund nor do we really make it 
a high priority. And that is of concern to me because, again, I 
have been into and watched some of the traffic control systems 
at some of our major points and it is abysmal what they have to 
work with, the equipment and the technology. It is just 
incredible that we have not made the kind of advances that we 
should.
    That is all I have, Mr. Chairman.
    Mr. Wolf. Mr. Olver.
    Mr. Olver. I will pass.
    Mr. Wolf. Ms. Granger.

                         cost accounting system

    Ms. Granger. Mr. Mead, you said that we are going to need a 
cost accounting system, and I was frankly very surprised. I 
think Members of the Congress were surprised to find that the 
FAA lacked a coherent cost accounting system.
    What is your evaluation of the efforts to introduce a sound 
cost accounting system and how are they going?
    Mr. Mead. They have made considerable progress in the past 
couple of years. But there is an underlying issue that is 
making sure that the data that would go into that system is 
accurate and the data that comes out is accurate. Otherwise, 
there is not much point in the thing. And that is the Achilles 
heel, frankly. We have billions of dollars floating around that 
we cannot properly allocate.
    Secondly, I do not think the progress has been laudable, 
shall we say, in the area of how to allocate costs to different 
units. And the reason I emphasize that is because when you talk 
about user fees and sending bills to places like American 
Airlines or United Airlines, the first thing these people are 
going to do is say, what was the basis for calculating this? 
There may even be some lawsuits. So we have to be prepared to 
defend these things not only before Congress, but in court, and 
at the present time we are not in a position to do that.
    FAA needs a clean audit opinion. I cannot imagine FAA 
trying to defend a cost accounting system when they have a 
disclaimer on their financial statements.
    Does that answer your question?
    Ms. Granger. I think so. Thank you.
    Mr. Wolf. Mr. Pastor.
    Mr. Pastor. I do not have any questions.
    Mr. Wolf. Ms. Kilpatrick.
    Ms. Kilpatrick. Thank you, Mr. Chairman.
    Along those same lines, Mr. Mead, as my colleague, Ms. 
Granger, was speaking to you, why not? Why bad information 
going in?
    Obviously, any computer system, if information is bad going 
in, what is coming out is obviously going to be bad. But the 
Federal aviation system has millions of people, and all of us 
Frequent Fliers, who, in addition--that is another part; I am 
going to get into that--but why not? If you cannot rely on 
them, what is happening? Why not the good information? Why not 
the results? Why not a good accounting system?
    Mr. Mead. I think the candid answer is that until probably 
about 2 or 3 years ago FAA was not called to task, there was 
not a lot of attention paid to this issue.
    What really focused attention onto this issue was: One, 
Congress passed a law that said, you really ought to have a 
clean financial opinion; and second, the airlines started 
talking about user fees. The confluence of those two things 
forced a lot of attention on this, and now FAA is moving out.
    But it is going to take some time, because it is not a 
matter, when you are dealing with billions of dollars, of just 
snapping your fingers and establishing a good accounting system 
and accurately keeping track of the money.
    Everybody is pulling together now to get this fixed.
    Ms. Kilpatrick. Thank you. I am glad to hear that, because 
what you said was not acceptable.
    You get $10 billion of taxpayer money, not to mention the 
$3; every ticket I buy, that is on that, plus the millions of 
others who pay it. I am happy to see that everyone is pulling 
together.
    Mr. Mead. We have to render this opinion. I know Ms. Garvey 
and I have endless conversations about this.
    Ms. Kilpatrick. What we want to hear is that they are 
working together and you are moving toward a good audit, the 
accounting system is something that will be seen real soon. Can 
you give me a time limit on that? How quickly will we see that?
    Mr. Mead. Our objective is to get a clean opinion for 
fiscal year 2000. It will be some time after that, I would 
guess a year or two, and my date is farther out in time than 
FAA's current date, before you have an acceptable cost 
accounting system.
    The reason my date is later than FAA's is simple. It is 
because I do not believe that one day we are going to pop out a 
cost accounting system and everybody is going to embrace it. I 
believe it is going to have to be vetted with the community and 
in Congress, and there is going to be a lot of attention paid 
to it. And that point will be doubly true if Congress decides 
to push for user fees.

                        y2k date change problem

    Ms. Kilpatrick. Y2K. Planes are automated 9 months away 
now. How up to date are you? Is FAA ready for Y2K? Are 
resources there so that you will be ready?
    Mr. Mead. I am going to give you the same response I hope 
Ms. Garvey will give you when she comes up here. FAA got a very 
late start with Y2K with respect to its own systems, and since 
then they have made enormous progress. All of their systems 
presently are repaired, but because many of their systems are 
computer systems, there are multiple copies of each system in 
effect all around the country.
    For example, there are 195 terminal facilities; and now 
that the FAA has repaired, in essence, one system, they have to 
field that and install that software fix in each of its system 
in locations around the country. That is what is going on now.
    But FAA has made enormous progress in repairing its 
systems.
    Ms. Kilpatrick. Of the 195, as you move this progress 
today, how many of them have been perfected?
    Mr. Mead. Well, of the 151 that need to be fixed, they have 
all been fixed; and I think it is about 27 percent of them have 
been what we call ``fielded,'' put in place in the system.
    Ms. Kilpatrick. And is that random or specifically going to 
look at all 170 of them?
    Mr. Mead. That is validating them. That is a tortuous, 
painstaking process.
    Ms. Kilpatrick. I understand. But 2000 is 9 months away. 
Will you be ready?
    Mr. Mead. Yes. We had better be.
    Ms. Kilpatrick. That is not good enough. Will you be ready?
    Mr. Mead. Yes, we will be.
    Ms. Kilpatrick. Thank you, Mr. Mead.
    Thank you Mr. Chairman.
    Mr. Wolf. Mr. Serrano.
    Mr. Serrano. I have no questions.
    Mr. Pastor. Mr. Chairman, my understanding is, Mr. Mead has 
a flight reservation December 31st and I think he is flying 
back to San Francisco.
    Mr. Mead. I thought that was Administrator Garvey. I do not 
know if you saw the article about the Chinese government's 
approach to this, but I was reading how the Chinese government 
said, well, its airliner check is that they will be in the air 
on January 1st. I guess that is a good incentive.
    Mr. Packard. Mr. Chairman, on the Y2K--and I appreciate it 
being brought up--I understand that in the testing there have 
been some problems. Could you elaborate on that?
    Mr. Mead. There have been some problems with the testing?
    Mr. Packard. I understand that they were running tests on 
the system that has been repaired and that it did not always 
perform. Maybe I am misinformed, but are you aware of any 
problems in the testing of your repaired systems?
    Mr. Mead. I am not aware of that, sir, but I will make 
certain that is an accurate answer.

                            firewalls effect

    Mr. Wolf. Ms. Irving, is it true that if we raised the 
aviation spending and protected the level with firewalls 
similar to those in TEA 21, those funds would still be scored 
in the budget process and would raise the likelihood of budget 
cuts in other programs?
    Ms. Irving. If you give a guarantee to aviation and you do 
not exempt them from the caps and do not raise the caps, yes, 
sir.
    Mr. Wolf. If there is no separate firewall or budget 
category for defense spending, but only one lump sum for 
overall discretionary spending, isn't it logical to assume that 
additional budget pressure would be felt by both nondefense and 
defense programs?
    Ms. Irving. Yes, sir.

                               user fees

    Mr. Wolf. As you know, the FAA is proposing to reform the 
source of their funding by substituting air traffic user fees 
for some of today's aviation taxes. They want to do this to 
raise money and to have more predictability over the revenue. 
Your office looked at user fees government-wide in 1997 and 
concluded the following:
    ``Dependence on fees may cause these programs to become 
more vulnerable to cyclical swings in demand and fee income. 
This, in turn, raises questions about how to respond to such 
downturns in income.''
    How do most fee-reliant agencies respond when their fee 
collections are less than expected and they have no 
appropriation safety net?
    Ms. Irving. In general, they have to reduce their 
activities or, if other funding sources are available, ask the 
Congress for approval to reprogram or transfer funds.
    Mr. Wolf. Do you find that agencies reliant on fees have 
inherently more funding stability than those funded by 
congressional appropriations?
    Ms. Irving. No, sir.
    [Additional information follows:]

    However, appropriation language for some regulatory 
agencies, such as the Nuclear Regulatory Commission and Federal 
Communications Commission, provides special or general fund 
appropriations that are reduced as offsetting collections are 
received. This guarantees these agencies a level of spending 
regardless of the amount of fees collected.

                 aviation trust fund--original purpose

    Mr. Wolf. It has been long claimed that the Aviation Trust 
Fund was established solely to provide capital improvements for 
airports and air traffic control. At the committee's request, 
the GAO Office of General Counsel recently completed a thorough 
review of the legislative intent behind the establishment of 
the trust fund.
    Did you find that the trust fund was created solely for 
infrastructure?
    Ms. Poling. No. We found that it was not created solely to 
finance aviation infrastructure. Should I go on or is that 
enough?
    Mr. Wolf. Well, if you want to add more.
    Ms. Poling. No, that is enough.
    Mr. Wolf. You can elaborate for the record, though.
    [The information follows:]

    When the trust fund was authorized in 1970, the statute 
stated that the balance of funds (after airport development) 
was to be allocated for certain administrative expenses, for 
research and development activities and for the maintenance and 
cooperation of air navigation facilities, none of which are 
generally deemed ``infrastructure.'' In addition, the law 
enumerates the categories of expenditures that cold be paid 
from the Airport and Airway Trust Fund, including several non-
infrastructure activities such as planning, research and 
development, operation and maintenance of air traffic control, 
air navigation, communications or supporting services, and 
certain administrative expenses.

    Mr. Wolf. In the legislative history of the trust fund, was 
the term ``infrastructure'' ever used, ever mentioned?
    Ms. Poling. Would you repeat the question?
    Mr. Wolf. Did you not find in the legislative history of 
the trust fund that the term ``infrastructure'' was never even 
mentioned?
    Ms. Poling. That is right. We looked for the term 
``infrastructure.'' We checked both the statute and the 
legislative history, and it was not used, so we looked for 
another term that would approach the word ``infrastructure''.
    Mr. Wolf. For the record, would you provide a copy of the 
Congressional Record debate on the bill in the Senate dated May 
12, 1970?
    And if you would also, for the record, provide a copy of 
your letter to the committee, dated February 12, 1999, on the 
subject of the congressional intent in establishing the Airport 
and Airway Trust Fund.
    [The information follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                          general fund subsidy

    Mr. Wolf. Mr. Mead, if we left the aviation taxes as they 
are today and required the trust fund to finance all of the 
FAA's budget, would we be spending 100 percent of the annual 
revenues?
    Mr. Mead. Yes.
    Mr. Wolf. In addition to the large general fund subsidy for 
FAA, there are programs in other parts of the federal budget 
which clearly benefit civil aviation yet are paid for not by 
users of the aviation system, but by the general fund.
    The Mitre Corporation recently completed an analysis which 
concludes that about $1.1 billion is spent each year by federal 
agencies other than FAA in support of civil aviation, all of 
which is financed by the general fund. For example, they 
concluded that about 40 percent of your work in the IG's office 
is in review and oversight of aviation programs, and those 
expenses are covered by the general fund.
    The State Department and the Office of the Secretary 
negotiate international aviation agreements for our airlines, 
and even though there is a balance in the Aviation Trust Fund, 
we continue to ask the general fund to pick up such expenses. 
There are also expenses by NASA, NOAA, and DOD. From the 
standpoint of fairness, why should these programs continue to 
be financed by the general fund taxpayer rather than by the 
users of the aviation system which benefit?
    Mr. Mead. Your question is rhetorical.
    Mr. Wolf. And therefore?
    Mr. Mead. Well, I think you make a case. I mean, it is 
true. We have done some work at NASA, for example, and NASA is 
doing research that clearly is an aid to civil aviation both on 
modernization, human factors and weather. That does not benefit 
defense. It benefits civil aviation, too. So you can make the 
case you are making.

                   modernization--adequacy of funding

    Mr. Wolf. When the FAA says they need more reliability and 
predictability in funding, they are usually referring to the 
ATC modernization program. This debate has been around for some 
time. In that light, let me read you a portion of a speech you 
gave in January 1994 when you were at the GAO. You said, ``The 
spiraling costs and delays in the modernization program are 
undeniably and unambiguously problems with management and 
systems development, not funding or procurement regulations.''
    You reiterated this point a year later when you advised the 
subcommittee, and I quote, ``The debate about FAA reform is 
fueled, in part, by the slow pace of the FAA's program to 
modernize the system. However, our work over the past decade 
has shown the primary causes to be factors such as 
underestimating the technical complexity of developing the 
system and inadequate oversight by management.''
    Is providing more money for FAA's modernization program, in 
and of itself, going to ensure the funding and fielding of new 
technologies in a more timely manner than we have seen to date?
    Mr. Mead. No, sir, it is not.
    Mr. Wolf. If the air traffic control's ATC modernization 
program was level funded over the next 5 years, it would 
receive $10.4 billion over that time, or about $2 billion a 
year. Under the new bill introduced, AIR21, these programs 
would receive $26 billion, or about $5.2 billion a year.
    From your knowledge of past FAA experiences in 
modernization for what you see today, is it likely that FAA can 
effectively manage such a huge increase in the scale and pace 
of their modernization program?
    Mr. Mead. I would be concerned about an infusion of that 
magnitude.
    Mr. Wolf. Given the well-established boom-and-bust cycles 
in the airline industry, if we accept the FAA's proposal to 
replace $1.5 billion in current appropriations with air traffic 
user fees, are we likely to see more reliability in their 
operations funding?
    Mr. Mead. No. I am not sure I see the correlation.
    Mr. Wolf. Please look at that.

                              cost control

    In a recent briefing, representatives of your office, Mr. 
Mead, advised the following: ``FAA must spend and manage 
whatever resources it ultimately receives more efficiently than 
it has in the past by emphasizing management accountability for 
controlling costs and achieving results.''
    Have you seen any FAA manager recently sanctioned for not 
controlling costs?
    Mr. Mead. No.
    Mr. Wolf. Have you seen any FAA manager sanctioned for not 
achieving results?
    Mr. Mead. None that I am aware of.
    Mr. Wolf. Last year the FAA's goal was to negotiate a new 
control or pay agreement which was fully offset within the 
existing budget by productivity savings and other changes. By 
our calculations, the new agreement would cost about $1 billion 
more over the next 5 years and only about 15 percent of that is 
offset with productivity changes.
    Was there any sanction within the FAA's negotiating team 
for not meeting their goal?
    Ms. Stefani. No, there was not.
    Mr. Wolf. The FAA's misadventure in developing overflight 
user fees has caused serious budget shortfalls in each of the 
past 2 years that this committee has dealt with. Have any 
personnel been sanctioned for poor development of the user fee 
proposal?
    Ms. Stefani. Not that I am aware of.
    Mr. Wolf. In the modernization system there will be a huge 
increase in the development of STARS. Last night I went through 
your testimony. How much more do you think STARS will cost over 
what we originally thought?
    Mr. Mead. We have seen one estimate of about $290 million. 
I consider that estimate soft and probably premature.
    Mr. Wolf. So it will be higher than $290 million, at least 
that much above what we originally thought?
    Mr. Mead. I think that is likely.
    Mr. Wolf. What about the WAAS program, will there be a huge 
increase in the WAAS program over what it was originally 
thought to be?
    Ms. Stefani. FAA right now is doing an investment analysis 
and it is, in my opinion, highly likely that the cost will 
increase because of the need to retain a backup system.
    Mr. Wolf. Would you repeat that?
    Ms. Stefani. FAA is doing an investment analysis right now 
to determine alternative ways to go with the program. And in my 
opinion, because they will have to retain a backup system 
longer than expected, the cost will increase.
    Mr. Wolf. So STARS will go up and WAAS will go up. How has 
the FAA held its managers accountable for those cost overruns, 
and schedule delays?
    Mr. Mead. I think you would have to address that question 
to Ms. Garvey. I do not know the answer.
    Mr. Wolf. Do you know of any that have been held 
accountable?
    Mr. Mead. No, sir, not in the sense of not receiving 
rewards.

            funding needed to resolve atc capacity problems

    Mr. Wolf. Mr. Mead, you were a member of the NAS 
Modernization Task Force, which looked at FAA's capital needs 
in 1997 and 1998. That group was told that airline delays could 
significantly increase beginning around 2005 if certain ATC 
improvements were not made. As a result, Administrator Garvey 
accelerated a program known as ``Free Flight, Phase I'' which 
experts believe will address the problems until at least 2015. 
This program is certainly a high priority, but it is only 12 
percent of the F&E budget.
    In your opinion, is it necessary to substantially raise F&E 
appropriations above the current level of $2 billion in order 
to address the perceived capacity problems, or is it more an 
issue of proper funding allocation and management attention?
    Mr. Mead. I believe the funding in F&E could well increase. 
But at the same time, it is imperative that strong management 
be applied to these programs. Because it has not been a 
function of poor or inadequate funding that has led to the 
problems in the advanced automation systems several years ago, 
the STARS program, or the WAAS program.

                        cost control--operations

    Mr. Wolf. In your statement you say that it is critical 
that the agency do more to control the cost of its operations. 
You note that the FAA's operating budget is growing at a rate 
of 6.2 percent a year compared to Coast Guard's growth of 3.2.
    In your opinion, has the FAA done all that it could to 
control its operating costs?
    Mr. Mead. No, I think they could do some more. I believe 
that the agency is looking to do more. Remember, they just 
consummated this agreement, I believe, this past fall or late 
summer. Some areas that they might focus on are low-activity 
towers or automated flight service stations or quantifing the 
productivity gains that will flow from the controller 
agreement. Some have already been quantified, but there are 
others that have not, and you are going to need that 
information. In fact, I think the committee has already 
required that FAA provide that information.
    Another area that we might consider would be consolidating 
some of these TRACONs.

                     waste in modernization program

    Mr. Wolf. In your statement you indicate that the FAA may 
have wasted 10 percent of its F&E money since the modernization 
program was begun in 1992 or approximately $2.5 billion. Is 
that figure accurate or is it too high or is it about right?
    Mr. Mead. In the course of reviewing FAA's financial 
statements and trying to position them to get a clean opinion, 
we developed this information. Actually these numbers are FAA's 
numbers, and I have got a list of the different programs that 
are affected. I do not think that it is a complete or 
exhaustive list, however.
    Mr. Wolf. So it is at least $2.5 billion?
    Mr. Mead. I would say so--higher; AAS was itself $1.6 
billion. We dropped about $1.6 billion on the advanced 
automation system alone.
    Mr. Wolf. You say on page 10 ``we were unable to 
substantiate the acquisition cost of real property reported at 
2.5,'' and you go on. We have other questions, but first let me 
see if any other members have questions.
    Mr. Sabo.

                         acquisition management

    Mr. Sabo. Mr. Mead, let me ask you this question. In your 
judgment, with the personnel changes that we made, is FAA today 
in a better position to handle a large acquisition program than 
it was previously?
    Mr. Mead. Yes. And I say that because they are in a better 
position to move personnel around. They have greater 
flexibility in the pay that they are going to provide them.
    I overlay that with the procurement reform. That is an 
enabler, though; it means that you don't have to go through all 
of the normal federal procurement rules. It facilitates things, 
but it is not a panacea or a substitute for good judgment.
    Over the years, it seems to me that it has been very 
frustrating when they point to the federal procurement rules or 
inadequate funding, and when you look at the facts, the real 
problems with the pace of the modernization program haven't 
been that. They have been problems of management, complicated 
software development, inadequate attention to human factors, 
overly ambitious milestones. And I think FAA knows that. I 
don't believe that is totally inconsistent with what FAA would 
tell you.
    Mr. Sabo. Is this a problem that has been going on for 15 
or 20 years?
    Mr. Mead. Yes. In fact, 1981 and 1982 the then-
Administrator of the FAA proposed a National Airspace System 
Plan, and in that plan they proposed many of the systems that 
it took until the mid-1990s to obtain. Like the advanced 
automation system, they thought that they would be able to buy 
these things off the shelf. Once they got into it, they found 
out that these are going to have to be invented. FAA brought 
the plan to Congress, but the substance of the plan began to 
unravel over the years like a ball of yarn.
    I think FAA has learned a lot of good lessons over the 
years, and I want to mention some of the successes this past 
year. The display system replacement for the controllers at the 
enroute centers, that is going well; the HOST computer system 
which is replacing the computers in the enroute centers to 
control high-altitude air traffic. Interestingly, both of those 
procurements are not intensive software development. WAAS and 
STARS both are intensive software development acquisitions.
    Mr. Sabo. Are the problems that FAA have had over the years 
significantly different than what other agencies, like IRS or a 
variety of other federal agencies, had in major acquisitions, 
particularly if there is complicated software?
    Mr. Mead. I think the right answer to that question is no, 
not a lot different except in FAA you notice it more. There are 
more delayed tax returns is one item. IRS certainly has had its 
problems; Social Security seems to have straightened out a lot 
of its problems. The Defense Department has had its share of 
problems.
    Whenever you have something which is software-intensive, 
you can count on there being more lines of code involved in 
that acquisition, and probably some schedule slippage and cost 
increases as well.
    Mr. Sabo. Part of the reason I ask, I just watch regularly 
that we have these problems, and my sense is that government-
wide we haven't figured out how to handle major acquisitions. 
When we head into major acquisitions, we turn them over to what 
is fundamentally an operating agency, and we would like to 
think that they have expertise in operating, and we expect them 
to handle a highly complicated very difficult acquisition and 
it just strikes me that we have had massive problems year in 
and year out from agency to agency.
    I always have concern that we haven't dealt with it in some 
government-wide way, and I am never sure what the appropriate 
mechanism is. It just seems to me somehow we should have some 
centralized, at least a highly efficient group of people who 
can move in very early with agencies and acquisitions to give 
good advice on how you do it and my sense is that that is not 
happening.
    I observe--OMB, it seems to me, does a good job of trying 
to micromanage agencies, but doesn't do much in providing the 
real management side of government which should involve some 
real expertise in working with agencies to do acquisitions.
    Mr. Mead. I wouldn't look to OMB to manage some of these 
acquisitions. Let me suggest, in the inspector general's office 
and at FAA, I think that in the oversight of these big 
acquisitions, especially the ones that are computer-intensive, 
we need to bring in-house real talent that understands what is 
going on when a contractor says, ``Gee, there is more software 
development involved in this acquisition than we thought.'' 
Since most of these contracts are cost-plus contracts, it is 
important that the Agency develop the internal capacity to know 
whether those contractor assertions are accurate. It is also 
important, before a procurement gets under way in these multi-
billion-dollar procurements, that the estimates for the 
software make sense.
    One of the goals for the IG operation is that we develop 
more of a base of talent so we can do that rather than saying 
there has been a cost overrun, another schedule slippage and so 
forth. But this is a big issue for the Federal Government, the 
talent base.
    Mr. Sabo. I am curious, do your colleagues, inspectors 
general, ever make recommendations as to how we deal with a 
problem like this in total?
    Mr. Mead. Yes. As a matter of fact, this past year the 
inspectors general and GAO were asked to provide Congress a 
list of the top 10 management issues facing their agencies; and 
this matter of information technology appears on a lot of those 
lists. Now they have been delivered to Congress.
    Mr. Sabo. Is it a list of problems or with suggested 
solutions?
    Mr. Mead. Sometimes I think we could do a better job of 
stating the solutions. Sometimes the solutions seem to be more 
of a restatement of the problem, if you follow me.
    Mr. Sabo. I can state the problem, but I don't know what 
the solution is.
    Mr. Dillingham. Mr. Sabo, GAO took a look at the FAA 
software acquisition processes, and we pointed out to them a 
number of things that they could do to improve the acquisition 
of software-intensive systems; and FAA has, in fact, taken 
steps to improve its software acquisition.
    One of the biggest things that we pointed out, and we 
pointed out for a long time that they needed a chief 
information officer who, in fact, would be very much involved 
across the agency with regards to those kinds of acquisitions. 
And that, in fact, has taken place, too.
    I think that we have a ship that is going down the river, 
and it is going to take just a little while to turn it around, 
but clearly FAA has been told what the problems are and, in 
fact, has taken steps to try to improve that. So we are hopeful 
that we will see some dramatic changes in the near future.
    Mr. Wolf. Thank you.
    Mr. Olver.

                     waste in modernization program

    Mr. Olver. Mr. Mead, quite often in these hearings you are 
just sort of going in and out of attention, spans of attention 
can get short for all of us, but my chairman rather galvanized 
my hearing and perceptions here when he said that you had 
testified in your statement that there was $2.5 billion of 
waste--and I am paraphrasing now--in FAA, I think F&E.
    Maybe you would clarify what that--and you agreed, yes, you 
had said that. I have been madly going back and forth trying to 
figure out exactly where it was and what the implications were 
there.
    Did you--have you said that there was 2.5 billion in waste 
in F&E, and over what period is that?
    Mr. Mead. Since 1982.
    Mr. Olver. Since 1982?
    Mr. Mead. Or thereabouts, yes.
    Mr. Olver. Could you direct--maybe afterward you could 
direct me to where that appears in the testimony. I have 
looked, and since $2.5 billion is such an obvious number, I 
have quickly scanned and maybe the scan isn't entirely 
effective, but I find two places where $2.5 billion appears, 
and one of them has 1982 associated with it. It says, ``FAA 
must spend and manage whatever resources it receives more 
efficiently than it has in the past''; and then, going on, 
``FAA identified more than $2.5 billion in modernization 
projects that have been terminated without even being deployed 
since the onset of the modernization program in 1982.''
    Now, does that imply that FAA identified more than $2.5 
billion, that means that we spent the $2.5 billion in their 
totality? That could be read that there were $2.5 billion of 
projects which were proposed, some of which went through 
research and development and contracting and were terminated or 
whatever.
    Are you saying--is that the source of the $2.5 billion that 
I come to?
    Mr. Mead. First, FAA identified the projects to us, and 
yes, you are referring to the right number. It is on page 11.
    Mr. Olver. So that is the spot?
    Mr. Mead. Right. Those are systems--I have a list right 
here. The advance automation program was itself--we issued a 
full report on this. We estimated it at about $1.6 billion.
    Mr. Olver. They went right through the development of these 
modernized systems, spent the money, had them delivered and 
then never deployed them?
    Mr. Mead. No, never delivered. There was no system.
    Mr. Olver. But they were totally contracted, and the money 
was spent out the door and no product?
    Mr. Mead. The money was spent without a product. That is 
not to say that there aren't some lessons learned, and those 
lessons learned are valuable for the archives and so forth. But 
these are programs where the purpose of the acquisition was 
never filled. It was never delivered.
    Mr. Olver. Do we have the exact and total list of those 
that is the genesis of the comment, the FAA list on that?
    Mr. Mead. Yes, I have a list.
    Mr. Olver. Do you have a list, Mr. Chairman? Do we have it?
    Mr. Wolf. No, but without objection, we will ask Mr. Mead 
to submit it for the record.
    Mr. Olver. I would like very much that you show the time 
frame when those contracts were let and the time frame in which 
the product was not delivered and the money went out the door.
    [The information follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Mr. Olver. There was one other place, if I may, where you 
mentioned the number $2.5 billion, and that is on page 10. ``We 
were also unable to substantiate the acquisitions costs of real 
property, land and buildings, reported at $2.5 billion.''
    Now that does not imply that $2.5 billion has disappeared, 
but you can't quite find the audit trail on that $2.5 billion 
that would verify the 2.5 and thereby be able to assess whether 
it was correctly paid or whatever?
    Mr. Mead. The acquisition cost was not substantiated. They 
reported it, but they didn't have records to show how much the 
property involved had cost. And they should have those, just 
like you have for your house.
    Mr. Olver. Does that relate to a specific set of 
acquisitions?
    Mr. Mead. No. This would not relate to acquisitions.
    Mr. Olver. So you don't have a list of these, as you have 
in the case of----
    Mr. Mead. Oh, we can get you a list.
    Mr. Olver [continuing]. Of the projects of acquisitions of 
real property, land and buildings that are reported to total 
$2.5 billion, but which you can't find the audit trail for?
    Mr. Mead. We can. FAA is trying hard to establish the audit 
trail.
    Mr. Olver. Can you give you us a list?
    Mr. Mead. Sure.
    Mr. Olver. And the time frame in which those occurred as 
well?
    Mr. Mead. Yes. I don't have that list with me, sir, but I 
can surely get it to you.
    Mr. Olver. Thank you.
    Mr. Wolf. Mr. Pastor.
    Mr. Pastor. Mr. Mead, how are you?
    Mr. Mead. Fine, thank you.

                                 stars

    Mr. Pastor. You made a comment as we were talking about the 
procurement, the nonsoftware procurement, and somebody asked 
you if some projects were going well and one of them that you 
mentioned is the display system replacement. I think it was 
maybe a year ago or a year-and-a-half ago, we had people 
sitting at that table, and they were asking us, as a 
subcommittee, to determine what kind of mouse was better than--
what was needed; and we had the contractor saying, I am willing 
to work with these people. And we had management, their 
committee, saying, we know what is right. And then we had the 
people who were actually working on the display saying this 
doesn't work.
    I am glad to hear you tell me it is going well. How well?
    Mr. Mead. The display system replacement is in the en-route 
center. The mouse is associated with a different acronym.
    Mr. Pastor. The rat problem or whatever.
    Mr. Mead. If memory serves, the issue was--the design of 
the STARS system--the current system that the controllers use 
has a mouse or a cursor ball that is embedded in the 
controller's desk space. And the design of the STARS system had 
this mouse that really weighed 4 or 5 pounds. It was heavy. If 
you dropped it on your toe, you would feel it.
    That was the STARS program. We haven't heard of a similar 
problem with the display system replacement program. They 
followed quite a different approach with human factors with the 
controllers, and they really haven't had those types of 
systems. STARS, yes; and they have fixed the mouse problem that 
you allude to, sir.
    Mr. Pastor. In evaluating the display replacement, are we 
25 percent there, 100 percent there? At least it didn't seem 
like we were going to go very far when we were talking about 
it, and it was a major problem, as I recall, dealing with air 
safety and how the controllers were checking out where the 
planes were.
    But this was something that they needed to do to impart the 
modernization. How do you evaluate it now?
    Mr. Mead. The concern was with the STARS program.
    Mr. Pastor. That was one, and actually the whole display, 
the terminal and what it looked like.
    Mr. Mead. That is right. The STARS program that you are 
referring to is for the terminal facilities. The display system 
replacement is for the en-route facilities; they control the 
high-altitude traffic. The terminals control traffic when you 
get closer in to airports. That is where the problems are; you 
will hear more about those this afternoon.
    But no doubt the STARS program has had a lot of problems, 
and it continues to. And FAA is, as we speak, evaluating what 
to do, what direction to go with that.
    The DSR program, you asked for an evaluation of where that 
is, 17 of those 20 units are installed now.
    Mr. Pastor. I would just like to make a comment to my good 
friend, Mr. Sabo.
    I think this procurement problem is inherent, whether at 
the lowest or the highest level of government. I have seen it 
at the city and county level where you go out on bids and get a 
piece of equipment, and before you know it, the people inside 
who have the expertise--I think it is human nature more than 
anything--get comfortable with that particular contractor, and 
then it is very difficult to get them out, number one.
    Secondly, the oversight may not be as good, so I think we 
need to develop a better system. But I think sometimes the 
relationship that the inside government employee may have with 
the contractor results in that you don't get the product that 
you desire at the end.
    Thank you, Mr. Chairman.
    Mr. Wolf. Thank you very much. We appreciate your 
testimony, and there will be additional questions that we 
didn't ask that we will just submit for the record.
    [The questions and responses follow:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                                            Tuesday, March 9, 1999.

                           AVIATION FINANCING

                          PANEL TWO WITNESSES

                   U.S. DEPARTMENT OF TRANSPORTATION

JANE F. GARVEY, ADMINISTRATOR, FEDERAL AVIATION ADMINISTRATION 
    DEPARTMENT
MONTE R. BELGER, DEPUTY ADMINISTRATOR (ACTING), FEDERAL AVIATION 
    ADMINISTRATION
PETER ``JACK'' BASSO, JR., ASSISTANT SECRETARY FOR BUDGET AND PROGRAMS, 
    AND CHIEF FINANCIAL OFFICER, OFFICE OF THE SECRETARY

                       Panel Two Opening Remarks

    Mr. Wolf. The next panel would be Ms. Jane Garvey and Mr. 
Monte Belger, FAA, and Mr. Jack Basso, Assistant Secretary for 
Budget and Programs, DOT.
    Your full statements will appear in the record.
    Ms. Garvey. Mr. Chairman, thank you very much for the 
opportunity to appear here today and be here with my two 
colleagues.
    Mr. Wolf. Any time.

           Federal Aviation Administration's Opening Remarks

    Ms. Garvey. I have many opportunities in the next 24 hours, 
too.
    First of all, I do want to begin by expressing my 
appreciation to you, Mr. Chairman, and the members of your 
committee for your strong support of the FAA and its important 
mission. I think I came here a year ago and said that there 
were three critical issues: safety, security and system 
efficiency. That is really the heart and core of our mission. 
That is what the American people should and will judge us by. 
It has been with the strong support of this committee that we 
have been able to move forward on that very important agenda.
    Today, I want to ask your support in establishing a long-
term financing mechanism for the FAA programs. The National 
Civil Aviation Review Commission recommended, and we agreed, 
that ensuring a stable and adequate source of funding for the 
FAA's important activities is critical to enable us to meet the 
challenges of the 21st century. The first step, as the 
inspector general and as our colleagues from GAO have reminded 
us, is a clean audit opinion--that is critically important--as 
well as a very strong and sensible cost accounting system. That 
is really the foundation that we need as managers. That is the 
foundation that we need as we move the FAA into the 21st 
century. That really is a first step before we begin to 
fashion, in earnest, a user fee structure.

                           user fees proposal

    As you know, in fiscal year 2000, the Administration 
proposes to fund the entire FAA with a combination of current 
excise taxes and new user fees, and proposes the establishment 
of a performance-based organization (PBO) for air traffic 
services. This PBO is designed, we believe, to make the FAA's 
air traffic control system both highly responsive to user needs 
and more accountable for very good performance. It will be 
funded, in part, by new cost-based user fees which will be 
collected from commercial aviation flights that utilize the 
FAA's air traffic control services.
    As noted by the NCARC commissioners, changing to a cost-
based system--and believe me, we know how controversial that 
can be, is essential in the development of a more businesslike 
and efficient air traffic control system. Using such a system, 
in and of itself, will bring about a very significant 
management improvement. We know that the questions that could 
be answered in a cost-based environment cannot be answered 
today, and it is critical that we are able to do that. A cost-
based system, we believe will better enable the safety, the 
efficiency, and the cost reduction performance of the 
organization to be measured. It is important, that we measure 
how well we are doing and ultimately improve it.
    The new user fees that we are proposing will be based on 
the cost of providing air traffic services as determined by the 
Agency's new cost accounting system, and that must be 
established on generally accepted accounting standards and 
international economic principles. Cost accounting, we believe, 
will allow us to better control our costs and help determine 
what services are needed, as well as where and how the 
resources should be best allocated.

                         cost accounting system

    The question was asked a little bit earlier about where we 
were on the cost accounting system. We will have the first 
information available this summer to support the previously 
authorized overflight fees. We are on a very aggressive 
schedule. I know that there will be more questions on that, 
which I will be happy to answer.
    As the inspector general pointed out, implementing a cost 
accounting system is really the first step. It is one step in 
increasing the FAA's financial integrity and our own 
credibility. Of equal importance, and perhaps some would say 
greater importance, is the need to obtain a clean audit opinion 
on the Agency's 1999 financial statement so that we can be 
assured that our financial records accurately reflect our 
financial status. To ensure success, we have established teams 
with our office of Financial Services, with Jack Basso's office 
and with the IG. I meet with them every other week. We have 
established benchmarks and milestones so that we can meet what 
is again a very aggressive schedule.
    The teams have instituted monthly reporting, and we have 
assigned goals for all of our regions. This is an important 
effort that involves not just the headquarters, but is really 
relying on our field personnel to collect and gather, and 
accurately reflect the information that we need. We know that a 
great deal of work needs to be done both for the clean audit 
opinion and the cost accounting system. It is something that is 
a very aggressive schedule and, I think, a doable schedule and 
one that we are very focused on.
    I will say, Mr. Chairman, as I have said to you privately, 
that both the Secretary's office and the Inspector General's 
office have been part of the solution with this. This really is 
something that we are working on together. That concludes my 
statement, and we would be very happy to answer any questions, 
either the questions that came up a little earlier or any 
others that you may have.
    Thank you.
    Mr. Wolf. Thank you.
    [The prepared statement and biography of Jane Garvey and 
the biographies of Monte Belger and Jack Basso follow:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Mr. Wolf. Mr. Basso, you don't have a statement?
    Mr. Basso. No.

                          general fund subsidy

    Mr. Wolf. In 1995, Mr. Basso, in its 1995 government 
corporation proposal, the administration proposed to eliminate 
the general fund subsidy for FAA. Once again, in the fiscal 
year 2000 budget, the administration proposes to let users pay 
the full cost of the FAA's budget through a combination of user 
taxes and user fees.
    Why are you making this proposal?
    Mr. Basso. Mr. Chairman, we believe that having a stable 
and continuing financing source for the FAA is critical to the 
agency's ability to meet the growing needs of the aviation 
industry, and to also allow us to predict how those finances, 
over the long term, can be put in place so we can do the 
modernization that is necessary. But I would add one point to 
that, Mr. Chairman: That all of those issues need to be done 
within the context of the Congressional appropriations process.
    Mr. Wolf. Some said that the general fund should subsidize 
air travel because of the general economic benefits provided to 
the nation by the aviation sector. Are these benefits really 
different from those provided by other important industries 
such as shipping, auto, rail or pharmaceutical?
    Mr. Basso. Giving you my best opinion, I think they are 
probably not different. I think they are similar--the 
Transportation Secretary has said this on a number of 
occasions--and part of a total system; there is not one segment 
that is really more important than others. They are all 
growing, and they represent 11 percent of the gross domestic 
product of the nation, so I would say that they are all 
critically important.

                            firewalls effect

    Mr. Wolf. In an October 1995 letter to the Transportation 
and Infrastructure Committee, the Secretary of Transportation 
expressed several concerns about the off-budget idea. He said, 
``Off budget status for the trust fund fails to address the 
continuing financial needs of vital FAA programs that do not 
derive funding from the trust fund. Further, this puts the 
remaining safety activities of the Department at risk. In my 
view, the proposed changes in FAA management and budget 
treatment could actually undermine efforts to ensure aviation 
safety and, more broadly, overall transportation safety. If the 
Congress chooses to send to the President a bill which does not 
address these concerns, I would recommend that the bill be 
vetoed.''
    How would special budgetary treatment for the FAA affect 
other DOT programs, including safety activities?
    Mr. Basso. On special budgetary treatment, if it were 
similar to the highway program, as an example, which was fire-
walled off, I think it would certainly, given the tightness of 
the domestic discretionary spending caps, down $26 billion from 
the fiscal year 1999 level, would have a negative effect on 
other areas of spending--Coast Guard, and other operational 
programs of the Department.

               balance between capital & operating funds

    Mr. Wolf. When an off-budget bill came to the House floor 
in September of 1987, the Secretary of Transportation, Mrs. 
Dole, opposed it strongly, calling it ``a threat to aviation 
safety.'' According to newspaper interviews, this was because 
it would tilt priorities away from safety-related operating 
expenses and toward construction programs.
    Does the current administration agree that the current 
balance among FAA's programs is about right or that a higher 
share should go to construction programs?
    Mr. Basso. We think that the balance is about right, but as 
the Inspector General suggested, over time the operational 
components of FAA are probably going to grow as a share of the 
budget, and will necessarily have to. I think there is a 
reasonable debate to be had on how well we can control those 
costs. Nonetheless, growth in the industry is going to 
translate into growth in the needs for technology and for 
operations.
    Mr. Wolf. For this year, FAA's operating expenses represent 
58.2 percent of its total budget in Mr. Mead's charts. Under 
the legislation, AIR21 at the end of 5 years that would have 
fallen to 43.1 percent. In other words, the share of the budget 
pie going to operations would decline about 25 percent. Would 
that concern you at DOT?
    Mr. Basso. Yes, sir, it would. Clearly, in our proposal 
that we sent up with the budget, we show growth in the 
operations aspect of the budget, and that would concern us.
    Mr. Wolf. Would not budget fire walls, which freeze funding 
levels over a long period, make this problem worse than if 
funding levels were more flexible?
    Mr. Basso. I think the answer to that has to be yes. 
Clearly, anything that squeezes the rest of the domestic 
discretionary pot squeezes out other priorities.
    Mr. Wolf. The AIR21 bill would result in $40 million more 
spending on aviation, compared to fiscal year 1999 levels, over 
the next 5 years, yet this committee would still have to 
finance the extra spending if we were not able to wring those 
resources out of the annual budget process.
    What DOT programs are most likely to be affected and why?
    Mr. Basso. I can give you the general areas that would 
likely be affected, Mr. Chairman. We haven't actually gone 
through a specific assessment, but I can answer the why.
    Clearly, the operating programs, Coast Guard, areas that 
have high outlays, would be those that are affected. And the 
why is simply that within a confined box that gets no bigger, 
when one part of the box grows in larger proportion to another 
area, another has to come down to accommodate it.

                          general fund support

    Mr. Wolf. Several years ago the CBO concluded the following 
about the buildup of a surplus in the trust fund. They said 
``the current accumulated surplus in the Aviation Trust Fund is 
illusionary. While this surplus appears to indicate that 
private sector users have paid more in taxes than they have 
received in service, the opposite is in fact the case. The 
uncommitted balance in the trust fund has developed ironically 
because private sector users of the aviation system have 
received more in capital and operating spending than they have 
paid in taxes.'' Is that still accurate today?
    Mr. Basso. Yes, it is. In fact, I can tell you, Mr. 
Chairman, over the last 7 years or so we have been actually 
spending more from the trust fund than we have been taking in, 
and the major part of the balance is the interest that the 
trust fund earns.

                            firewalls effect

    Mr. Wolf. If the FAA programs are increased in funding and 
protected from budget reductions, would it not be logical for 
other agencies and their congressional supporters to dump their 
aviation-related programs over to FAA to relieve their own 
budget pressure?
    Mr. Basso. I would have to tell you if I were the budget 
officer in one of these other agencies, I would certainly be 
thinking of that.

          Use of Trust fund Revenues for Non-Aviation Purposes

    Mr. Wolf. Sometimes we hear that the Aviation Trust Fund 
revenues are being diverted to nonaviation uses. Our 
understanding is that such a thing would be against the law. In 
March 1996, in a hearing before the House Budget Committee, 
economist Allen Shick said, ``The plain truth is that every 
dollar paid into these trust funds has been used solely for 
transportation purposes.''
    Is that true or are they being diverted?
    Mr. Basso. Mr. Chairman, I am not aware of any major 
diversions for non-aviation purposes. I know of some related 
activities that are relatively small, NOAA weather services and 
things of that nature, but I would be happy to supply more 
information.
    Mr. Wolf. If you would do that.
    [The information follows:]

    In fiscal year 1993, $1.8 billion was transferred from the 
trust fund to the general fund for deficit reduction purposes, 
as provided in Public Law 102-581, the Airport and Airway 
Safety, Capacity, and Noise Improvement, and Intermodal 
Transportation Act of 1992. The funds provided to the Commerce 
Department's National Oceanic and Atmospheric Administration 
(NOAA), ending in fiscal year 1992, were for weather reporting 
services to the FAA.

                               User Fees

    Mr. Wolf. Mr. Sabo.
    Mr. Sabo. Somehow if we can't find all this fee income that 
is supposed to fund the budget for this year, would you be 
supportive of a rider that says we simply appropriate the 
money, assume you get the fees, and if they don't arrive in 
your treasury, that the first offset be against the OMB budget?
    I don't expect an answer, but let me just say, I hope you 
work with this committee. I happen to be someone who thinks 
that we should raise the discretionary caps. I think we will be 
making a serious mistake if we don't. They are unrealistic. 
What will happen, I don't know.
    We have to plan at this point on what is fact, which is 
that the caps are in place. And I hope you have some creative 
ideas to help us out; otherwise, you are going to have some 
major problems, and I hope you put your thinking caps on.
    And I don't expect an answer today, but if $1.5 billion--
unless Frank can be an incredible lobby on the Chair of the 
full committee when it comes to 602(a) allocation, and I forget 
what number we call it today, we are going to have some immense 
requirements here for funding requirements for yourself and for 
the Coast Guard and for Amtrak. So I hope you are creative.

                            Personnel Reform

    Mr. Sabo. How is the flexibility working in terms of 
personnel? Are you having problems? Are you finding the people 
you want?
    Ms. Garvey. First of all, I think personnel reform is a 
wonderful tool for the FAA. I think we have only begun to 
realize the great potential of it. We have begun to recruit 
some people using almost a signing bonus, if you will, and 
provide some dual compensation. But I will tell you in some 
ways, the Chairman and I were speaking of this the other day, 
the health of the industry makes it even more challenging, even 
with personnel reform, to attract some additional folks. We 
have had some success, but I think that is an area we are 
always going to be focusing on.
    So I think we have been able to attract some very good 
people. We have been able to cut down some of the time that is 
involved in hiring people. But the real potential in personnel 
reform is when we can really link performance to some of the 
pay bonuses, for example, or some of the pay incentives. We 
have a pilot program under way with our research arm right now. 
It is a smaller group within the FAA, but still a significant 
number, so we get a real sense of how it could work. We are 
about 6 months into that pilot program. We are scheduled for a 
very good briefing in about 4 weeks with all of the employees.
    One of the things that I think we need to do is let our 
employees know what we are learning and what we are having 
difficulty with. We put an awful lot on the management team to 
evaluate people in a very different way, and the performance 
evaluation is going to be very critical. Once you start talking 
about linking incentive bonuses to evaluations, there is 
obviously a very big emphasis on it. So the first step is to 
let the employees know in about 4 weeks where we are in the 
pilot program. Our longer-term goal is to complete that by the 
end of this fiscal year and to move into broader personnel 
reform for the Agency incrementally, starting at the beginning 
of the next calendar year, 2000.

                         Long-Term Acquisition

    Mr. Sabo. In terms of long-term acquisition, what are 
desperately needed are folks to do the planning for software 
acquisition. Are you finding those kinds of people? Are they 
available and do they have the type of experience and 
background to deal with the size and scope of what your agency 
is trying to buy?
    Ms. Garvey. I think that the Inspector General was right 
when he said that both the FAA and the IG need some additional 
expertise. I have talked to Dan Goldin and others about that. 
It is a challenge to get that kind of expertise. The FAA, as I 
understand it, lost a number of those folks, you know, probably 
a decade or so ago. So I think that is always a challenge. But 
I think we do have some very good program managers. If you look 
at our efforts in Y2K, at DSR, and what we are accomplishing in 
house, you will see some very good management being brought to 
bear on those programs.
    Do we need to do more of that? Is there more program 
management that we need to do and more expertise that we need 
to bring into the Agency? Absolutely. But I think, as the 
Inspector General said, we do have some good success stories in 
the past year as well.
    Mr. Sabo. When you are looking for long-term planning, will 
you look to NASA?
    Ms. Garvey. We have talked to NASA, in part because we have 
successful research under way with them. I have talked to our 
colleagues in the Defense Department. The Inspector General 
referred to someone by the name of Frank Colson, who was just a 
wonderful source of expertise for us at Defense; and there are 
other people there as well. You have to reach out to as many 
people as you can and ask them, how are you solving this? Even 
in the private sector, even some of these very good firms are 
having difficulty getting enough of that kind of expertise. I 
wish my children were interested in this area because it is 
only a developing area.
    Mr. Sabo. Thank you.
    Mr. Wolf. Mr. Olver.
    Mr. Olver. No questions.

                              Retirements

    Mr. Wolf. Mr. Pastor.
    Mr. Pastor. In many professions, we are now finding that in 
the next couple of years people are retiring because they are 
coming to the end of their career; and education is going to be 
a big problem. And in the past conversations that I have had, I 
have been told that with the air traffic controllers we may 
find a large number of them now beginning to burn out or, 
because of their age, retiring.
    Do we have that problem, and if we do, how are you 
addressing it?
    Ms. Garvey. That is an excellent point. We have that 
problem. It is an agency-wide problem. Monte has talked to the 
union presidents about the issue, particularly with PASS, with 
many of the technicians. And not only on the succession issue, 
but are we training them in the right way for the future. We 
are talking about technology which is very different from 
technology of 5 years ago. The union leadership at PASS has 
been extraordinarily forward-thinking in bringing forward some 
training in that area.
    We have a wonderful human resources person, Glenda Tate--
great expertise, a great reputation in this town for 
understanding human resources. The whole issue of succession 
planning is something that she is doing in partnership, and is 
taking on as part of personnel reform. So we are focused on 
that. We have a lot of work in that area to do. There are some 
areas where I think it will impact us more directly than 
others, but putting in place those kinds of succession plans 
and doing it in partnership with the employee groups that are 
affected is what she is doing. It's part of her performance 
agreements with Monte and with me, so she is very focused on 
it.

                         Personnel Recruitment

    Mr. Pastor. One of the things that you have to do is 
recruit. Are we able to recruit personnel that reflects America 
and the goals of this Administration?
    Ms. Garvey. We have done a good job. If you look at the 
face of aviation, it has been historically pretty traditional. 
We have done an awful lot with the Secretary's office to focus 
on minorities and other groups that haven't traditionally been 
part of the FAA.
    I will tell you again, because the industry is doing so 
well, this makes it even more challenging. How do you recruit 
when you are also competing with industry that can offer some 
pretty good benefits? But I think we are doing reasonably well, 
but I would be happy to provide you with some specifics on that 
as well.
    [The information follows:]

    Yes, FAA is a leader in the Department's efforts to 
diversify its workforce. Among other actions, FAA has 
instituted internship programs for college students attending 
Historically Black Colleges and Universities (HBCU), Hispanic 
Serving Colleges or universities and educational institutions 
that serve the Native American and Alaskan Indian population. 
FAA actively participates in the Administration's Welfare to 
Work program and it exceeded its Welfare to Work hiring goal 
for fiscal year 1998. To date we have hired people with 
disabilities, minorities and women under the Welfare to Work 
umbrella. FAA partners with the Trans Tech Academy of Cardozo 
High School in Washington, DC. The Academy is designed to help 
prepare students for careers in transportation. The Academy is 
a current source of student employees and a future source of 
permanent employees.
    With the assistance of Employee Associations, FAA targets 
its recruitment for the occupations of electronic technicians 
and airway transportation systems specialists in order to 
increase diversity within these occupations. For example, 
Airway Facilities has allocated funds for recruitment 
literature, travel to conferences and recruitment sites, and 
advertisements in minority publications. Staff attends 
conferences such as the one held annually by the National 
Association for Equal Opportunity in Higher Education.

                          controller training

    Mr. Pastor. In last year's bill there was an issue that I 
think you found an outside contractor to provide training to 
your controllers, and there was an issue whether or not it was 
an effective way of doing it. And as I remember, the 
conversation was that in many cases the total amount of money 
that is appropriated is not spent because the monies may be 
used for something else and therefore dilute the training of 
the controllers. That was one issue.
    And the second issue was the quality of training. Are we 
going to face that issue this year?
    Ms. Garvey. One of the challenges for us every time we have 
budget constraints, particularly in an operating agency, is it 
is always easier in some ways to go after the training. That is 
one of the toughest decisions that I don't like to touch. On 
those very important projects that we are moving forward, where 
training is so critical like DSR, HOST, STARS, and some of the 
new automation, we absolutely must protect the training. In 
fact we had to go into some significant overtime costs for DSR 
to get the kinds of training that was needed.
    There is more that we can do. One of the issues that we are 
looking at this year is, are there some efficiencies in the 
training? Very often each line of business does its own 
training. We are looking at that to see if in some cases we may 
get more for our training. We are looking at some different 
approaches. For example, our training center in Florida, 
sending those folks to different regions rather than having 
those people come to the training center. So we are looking at 
ways to approach it differently. Monte, do you want to add 
anything?
    Mr. Belger. No.

                               year 2000

    Mr. Pastor. What flight are you scheduled on on December 
31?
    Ms. Garvey. I am actually scheduled on a flight, and 
several members of the press have asked to join us. But Mr. 
Mead hasn't volunteered yet. Maybe I will ask him at the end of 
this session if he would like to join me on that New Year's 
ride. [Laughter].
    Mr. Pastor. Is it coast to coast?
    Ms. Garvey. It is. One airline submitted something that 
allowed me to pass through every time zone at just the right 
part. Of course we will be using the government contract, so I 
am not sure which low bidder I will get. That is not so 
comforting, is it?
    Mr. Pastor. Maybe I can encourage Mr. Mead to make some 
arrangements.
    Ms. Garvey. The program manager is coming with me. If he 
shows the slightest bit of hesitation, I may rethink that, but 
I am sure that he won't.

                mid-america aviation resource consortium

    Mr. Sabo. Does the MARC program in Minnesota continue to do 
a good job of training en route air traffic controllers?
    Ms. Garvey. We think that it is a very fine program.

                      aviation trust fund balance

    Mr. Wolf. Mr. Basso, some want to lower the cash balance in 
the Aviation Trust Fund and some want to increase spending on 
FAA's capital programs. Isn't it true that due to the low 
spend-out rate of capital programs, raising the obligation 
authority for this program would most likely increase the cash 
balance rather than lowering it, at least over the next few 
years?
    Mr. Basso. Yes, the outlay rates are much lower for capital 
programs than, for example, operations; and it would in all 
likelihood increase the cash balance.
    Mr. Wolf. In your opinion, what is the best way to lower 
the cash balance on the Aviation Trust Fund?
    Mr. Basso. To increase the share of operations that comes 
from the trust fund because it has much higher outlay rates; 
and also it is in areas that I mentioned earlier where we are 
clearly going to see some growth.

                            funding adequacy

    Mr. Wolf. Ms. Garvey, you have said financial reform is 
needed at the FAA in order to provide an adequate, stable and 
predictable source of funding. Let me ask you a couple of 
questions on these issues.
    First, let us discuss the adequacy of your funding. Over 
the past 5 years Congress has cut only two-tenths of 1 percent 
of the agency's operating budget request. In other words, the 
agency has received and let me say, too, this committee has 
probably operated even during the difficulties that we have had 
in Congress over the years in a bipartisan way, whereby our 
bills are reported out without any objection; and we have 
really worked hard on both sides of the aisle to make safety a 
priority in everything that we have done, and there have been a 
number of cases where the committee has actually plused up 
money.
    I often believe that your budget people say, ``I know the 
committee is going to put money in there, so we won't put it in 
there''; and ``they will put it in, so we can put money in some 
other place''. I just want that to be clear. In other words, 
the agency has received from Congress 99.8 percent of what you 
defined as adequate through your budget submissions, at least 
in the operating budget. Would freeing you from annual 
Congessional review really make that much difference?
    Ms. Garvey. We do not believe that freeing us from the 
annual review is what we would want. That is not part of our 
proposal.
    Mr. Wolf. If you provide those airlines and general 
aviation organizations who pay the user fees a thorough and 
detailed look into user fee proposals and allow them real input 
to change these proposals, isn't it likely that they will 
question at least two-tenths of 1 percent of those costs and 
probably more?
    Ms. Garvey. It is important to have industry input as we 
begin to develop functions, for example, for cost accounting. I 
don't think that we are looking to industry for veto power. We 
are looking for input to be sure that the assumptions that we 
are putting in place make sense. I am not sure that I have 
answered--
    Mr. Wolf. Not really.
    Ms. Garvey. Give me one more chance.
    Mr. Wolf. Isn't it likely that they would question at least 
two-tenths of 1 percent?
    Ms. Garvey. Might they question our budget? I think they do 
now.
    Mr. Wolf. They are reluctant to come up to the Hill.
    Ms. Garvey. What we are looking for,--this, she said with a 
great deal of optimism--if you have a strong cost accounting 
system, and you can lay it out and say, this is what the costs 
are, this is where we are putting the money, we have a much 
better chance of convincing others, frankly, even within the 
administration.
    I was interested in the discussion this morning about cost 
accounting. Our not understanding our cost structures right 
now, how much our services are costing, I think is hampering us 
in making a compelling argument.
    Mr. Wolf. Are you prepared to ask all the air traffic 
controllers to sign time cards?
    Ms. Garvey. I am prepared to ask air traffic controllers to 
take on collateral duties as we have in the contract.
    Mr. Wolf. With time cards, you may have an accounting 
system like a law firm, with billable hours. Are you leading 
toward asking them to sign time cards?
    Ms. Garvey. I am not sure about a time card, but I know 
that we are asking them to take on collateral duties, to take 
on additional responsibilities to keep the numbers at a frozen 
number; and I believe a contract is very serious and ought to 
be taken seriously.
    Mr. Wolf. Can you tell us how much additional money you 
will need to have an adequate budget over the next 5 years, and 
tell us what you are comparing that to?
    Ms. Garvey. The budget that we want to focus on is the F&E, 
because it is always a challenge. The budget that we have 
submitted as part of the President's budget in fiscal year 2000 
does give us what we need to move forward on the modernization 
piece, which is very important. Could we use a little more 
money if we had a strong cost accounting system as we moved 
forward? It may very well be.
    Mr. Wolf. Can you tell us how much additional money you 
will need to have an adequate budget over the next 5 years?
    Ms. Garvey. Staying with the President's budget is where we 
would stay.

                         oversight of user fees

    Mr. Wolf. The agency's definition of ``adequate'' may 
differ from those being asked to pay those expenses. When the 
government corporation idea was being discussed, I remember one 
witness showing us a photograph of Eurocontrol's new 
headquarters control building in Brussels, which was financed 
by user charges, with the comment that this is the kind of 
overhead seen in Europe when government agencies set their 
budgets through user fees.
    Your proposal essentially says that the agency would be 
allowed to determine the size of its annual budget and 
calculate the fee rates needed to finance it. What formal 
process, if any, are included in your proposal to give power to 
organizations other than the FAA to help control the size of 
that budget?
    Ms. Garvey. Mr. Chairman, we have asked in the proposal for 
an oversight committee, if you will, or an advisory committee 
that would be a subset of the Management Advisory Council 
(MAC). That committee would help us determine the user fees. 
Obviously, we would still go back to Congress. I believe our 
proposal actually calls for congressional approval.

                           funding stability

    Mr. Wolf. You also seek a more stable funding source and 
your proposal would be user fees tied to aviation activity. 
When you look at data on the annual percentage change in FAA's 
operating budget, I think you would be hard pressed to argue 
that it shows wild swings in funding.
    Looking at the historical data, how do you perceive the 
appropriation funding source to be unstable? You are asking for 
stable; you must assume that there is an instability. How do 
you define that?
    Ms. Garvey. I want to go back to something that you said. 
The support that we have gotten from this committee and the 
staff when we have worked on issues as they have arisen has 
been extraordinary, so we should be on record as saying that.
    Mr. Wolf. So you are more concerned about when Mr. Sabo and 
I leave?
    Ms. Garvey. Yes. That is what they say about when I leave 
as Administrator, too, which is 4 years away.
    Mr. Wolf. I saw your calendar in your office. You are 
marking every day; and on that one day, the mark was very 
vigorous. [Laughter].
    Ms. Garvey. I think that was yesterday, or it may have been 
this morning. You are right, in fact, even members of the 
authorizers have made that point. But particularly in F&E, even 
a small percentage, a 2 percent difference, can be significant. 
So from our perspective, again the cost accounting which tells 
us exactly how much the services are costing, and lays it out 
in a much more predictable way for us. That is really critical.

                           user fee proposal

    Mr. Wolf. The third element is predictability. Given the 
historic boom-and-bust cycles in the aviation industry and the 
testimony from GAO, how will tying your fortunes to them 
through direct user fees result in greater predictability?
    I know you were here when the GAO witness testified.
    Ms. Garvey. Yes, and I was interested in that comment 
because I think it is important to note that we are not 
interested in linking it to the airlines' revenues, but rather 
the cost of the service. So whatever the costs of the service 
are is what we are linking it to.
    Mr. Wolf. As the staff just said, that means you raise the 
rates as revenues go down. As they are having a more difficult 
time, you would then raise the rates, in essence?
    Ms. Garvey. We would link it to the costs of the services. 
So if you have services--that is what the costs would be.

                        capital funding adequacy

    Mr. Wolf. In 1994, the chairman of the Public Works 
Committee wrote, ``I see no basis for blaming a lack of funding 
for the delays in the modernization program.''
    Over the years, Congress has given the modernization 
program all of the money that could be spent and then some. 
That same year Secretary Pena said, ``Let me say, we do not 
have a problem with the capital funding levels that have been 
made available to the FAA over most of the past decade.'' The 
ATA in 1997 testified before the National Civil Aviation Review 
Commission and said ``maybe the FAA isn't underfunded at all, 
but rather it is overfunded. The capital program exceeds 50 
percent of its overall budget. Is there any organization, 
public or private, which can manage a complex, innovative, high 
technology, capital development program which exceeds 50 
percent of an organization's overall budget?'' Funding for the 
FAA's capital program was about the same as it was in 1994 when 
these comments began. Where is the crisis in the F&E spending?
    Ms. Garvey. I worry a great deal about the operating 
program, and Mr. Mead mentioned that we have talked about that 
a lot. I am concerned about that.
    In terms of the capital program, some of the comments that 
were made earlier, and probably are alluded to in the comments 
that you have just read, are fair questions to ask. Is it 
capital that is needed or is it better management? We are 
really taking on the issue of better management. If you look at 
the Free Flight office and you look at the benchmarks that are 
put in place, Y2K is another example, I think we are really 
putting those kinds of management controls in place.
    Having said that, as we move forward, making sure that we 
have got the kind of funding that we need with the many 
competing interests that you referred to, Mr. Chairman--even 
this morning, some of the very important discretionary 
programs. We are looking for something which is tied to the 
user fees, in our view at least, to be worthy of discussion. It 
may not be where we end up, but it is worthy of discussion. Mr. 
Basso also has a chart here.
    Mr. Basso. Mr. Chairman, if I can just add, one of the 
things that we have been observing is the growth, as a 
percentage of the total FAA budget, of operations. For example, 
in fiscal year 1998, we will be up around 64 percent of the 
total FAA appropriations, and we have been seeing this trend 
growing since 1993. This has caught my attention and given the 
discussion we had earlier on caps--I know for your committee it 
will also present problems--because these being high spending 
programs, they tend to squeeze out the capital.

                           aip funding levels

    Mr. Wolf. Despite continued budget pressures, isn't it true 
that the F&E appropriation for this year is the highest it has 
been since 1994, and the AIP is enjoying its highest funding 
level ever?
    Ms. Garvey. The AIP funding level is higher and the budget 
is higher. We also have some additional mandatory costs which 
have an effect on the budget as well.
    Mr. Wolf. When you look at airport construction spending, 
it is hard to believe that there is a crisis either, although 
some people talk about the AIP program as if it is the only 
financing available for airports. GAO tells us that AIP 
provides only 20 percent of nationwide spending for airport 
construction; the rest is provided through locally generated 
funds, PFCs and airport bonds.
    GAO's research also found that total spending was trending 
upward, even in those areas when AIP was being reduced.
    Don't you agree that when we are talking about meeting the 
needs of airports, we should consider not just the contribution 
from AIP, but also from other sources?
    Ms. Garvey. Yes, I do. I think the GAO report is well 
founded and well stated. There are a number of strategies that 
airports can use. The concern that we have often had is, some 
of the smaller airports have more difficulty, so part of our 
proposal calls for giving more flexibility to the larger 
airports with PFCs, and then directing AIP money to the smaller 
airports. That has always been a concern. For some of the 
larger airports, there are many strategies that they can use.
    Mr. Wolf. The Aviation Commission recommended that AIP 
receive an appropriation of $2 billion annually, approximately 
the level now being provided, assuming that the program is 
extended this year.
    Do you agree with the Commission that a federal 
appropriation of $2 billion a year for AIP is the right figure 
to provide adequate funding for the Nation's airports?
    Ms. Garvey. The Administration's budget for the AIP level 
is a little bit lower. However, we do call for raising the PFC 
which, when combined, would give more money. But I know that 
that level is a disappointment for the airports.
    Mr. Wolf. With the AIP program, you don't favor the $2 
billion? You do favor the $2 billion?
    Ms. Garvey. I would say I favor the Administration's 
request. Is this when the lights go out again? I noticed that 
before.
    Mr. Wolf. There was a guy who leaned against the lights.
    Ms. Garvey. That is the fellow from OMB.
    Mr. Wolf. He told me he was your neighbor.
    Ms. Garvey. I will take all the help I can get, Mr. 
Chairman.
    Mr. Wolf. I thought you had an agreement that when the 
questions got tough----
    Mr. Basso. I will take the heat for that. $1.6 billion 
seems to be adequate for the AIP when coupled with the PFCs 
that we recommended.

                           user fees proposal

    Mr. Wolf. The current departmental leadership, and 
Secretary Pena before them, concluded that FAA needs the 
flexibility in user fees to respond to the rapidly changing 
needs of the aviation industry. It is interesting that the 
major air carriers do not agree that this flexibility is 
necessary. Rather than giving the FAA authority to assess user 
fees, they prefer today's taxes. Rather than giving you the 
authority to set your annual budget, they prefer 
Congressionally imposed firewalls. Rather than eliminate the 
general fund contribution, they propose to make it a mandatory 
appropriation. If this flexibility is really needed to respond 
to their needs, why don't they support your proposal?
    Ms. Garvey. Well, Mr. Chairman, I have had many 
conversations with members, including the CEOs, of the 
airlines, and you are absolutely right. They do not support the 
user fees, I think in large part, at least at this point, 
because they do not see a strong cost accounting system. So 
that gives even more urgency to the issue of a cost accounting 
system.
    I was interested in a couple of comments this morning where 
people said that, really, this is the beginning of the 
discussion. We have put a proposal on the table. Congressman 
Sabo spoke about the need to be creative. That is, as we get 
into the discussion, what we need to be as well. We have put 
something forward, but we certainly want to talk about it and 
figure out what is best for the industry.

                         cost accounting system

    Mr. Wolf. Based on your current schedule for the cost 
accounting system, if we authorize you to collect up to $1.5 
billion in new fees next year, would you be ready to do it?
    Ms. Garvey. We think we will be, but it is a very 
aggressive schedule. We have focused, which I think is the 
right approach, on the en route and the oceanic. The oceanic is 
straightforward and a little easier to do. We will have that 
information we believe by the end of this fiscal year, which 
would allow us to begin next year. We have done the 
calculations, and we believe it does come to that number. But I 
absolutely agree, it is a very aggressive schedule.
    Mr. Wolf. You know the problem on the overflight fees.
    Ms. Garvey. I do, Mr. Chairman. Although part of the court 
case, which I think we have taken to heart, is the very fact 
that we did not have a cost accounting system. So that is why 
focusing on that piece of it very early on is important. This 
summer is going to be important to us in terms of having that 
information.
    Mr. Wolf. Do you think if you had all this ability that 
ticket prices would go up?
    Ms. Garvey. I would never guess what would happen in the 
industry. Maybe, Jack, would you like to take that question?
    Mr. Basso. That is an excellent answer.
    Ms. Garvey. I am just not sure. Again, if we can lay out 
what the costs are, there has got to be a basis. I will tell 
you one thing about the cost accounting from a management 
perspective. Monte and I had a great, interesting experience a 
couple months ago where we looked at some of the information 
that was coming in first. It really did raise some good 
management questions for us about why something was costing 
more in one center than another. So in some ways, at least in 
that case, it gave us an opportunity to re-examine some costs, 
I hope for more of those.
    Mr. Wolf. Of course ticket prices would go up. And I know 
you fly coach, too, but the first class and business 
connoisseur class would all be fine, basically. But the mom who 
is visiting her new grandchild, I mean, people like that are 
going to pay the higher ticket prices. I think the ticket 
prices would have to go up.

                               firewalls

    Will you tell us that the agency will not support the 
inclusion of firewalls around aviation spending this year?
    Ms. Garvey. That is correct, Mr. Chairman.

                          trust fund interest

    Mr. Wolf. As part of the TEA 21 agreement on firewalls, the 
Highway Trust Fund is now prohibited from earning interest 
revenue. Over the past 5 years, interest to the Aviation Trust 
Fund has averaged $675 million a year. Is FAA prepared to 
forego that interest, as Federal Highway does; and, if so, how 
will that revenue be made up?
    Ms. Garvey. Mr. Chairman, at this point we would not 
because we would need that money. And, Jack, I hope I answered 
that correctly. But we would need that in order to make the 
proposal work.
    Mr. Wolf. Mr. Sabo or Mr. Olver.
    Mr. Sabo. You are doing fine.

                             cost controls

    Mr. Wolf. On cost controls, Ms. Garvey, many aviation 
organizations have suggested this year that agencies should not 
receive special budgetary treatment from Congress unless that 
new structure is contingent on management and financial reform. 
The independent financial assessment completed by Coopers and 
Lybrand, C&L, in February, 1997, said, ``C&L does not believe 
the status quo operating environment is an acceptable mid-term 
or long-term choice for the FAA. There are no significant 
productivity improvements shown in the FAA's numbers. Nor are 
payoffs from either procurement reform or personnel reform 
assumed.''
    What internal changes has FAA made over the past 2 years to 
come up with savings?
    Ms. Garvey. There have been a number of steps, Mr. 
Chairman. I want to talk very briefly just about a couple of 
the steps that I have taken. The work that we have done with 
Free Flight in bringing all of that into one office involving 
both the unions early on, which was an issue, as you know, that 
we experienced with STARS, involving the industry as well and 
helping us determine what the metrics are, what the performance 
measurements will be is a new way of doing business. Y2K has 
been a new way of doing business. Very straightforward 
benchmarks, milestones, one person accountable. I think that is 
very important.
    Mr. Wolf. Y2K is just one time though, isn't it?
    Ms. Garvey. One of the messages that we are sending, is 
that this is an important initiative, but this way of doing 
business is important. Some of the streamlining that was begun 
long before I got to the FAA under David Hinson and Linda 
Daschle that reduced staffing by about 21 percent is very 
important. Acquisition reform and personnel reform have given 
us some streamlining and some savings.

                    operating budget request savings

    Mr. Wolf. But the Fiscal Year 2000 operating budget 
requests $491 million in increases, including $153 million new 
initiatives offset only, if it is an accurate figure with $20 
million in savings or \3/10\ of 1 percent of the budget. Is 
that figure wrong?
    Ms. Garvey. I am going to have to go back and look at that 
figure. By the way, some of the increases are actually for new 
automation that we do not have in place now.
    Mr. Wolf. Would you look at that?
    Ms. Garvey. Absolutely.
    Mr. Belger. Mr. Wolf, we do not do a good job capturing 
savings and efficiencies, and I think that $20 million quite 
frankly is understated. Just to add to the things that the 
administrator mentioned, if you go back and look at our 
staffing levels back to 1992, our FTE levels are about 4,500 
less than they were in 1992. At the same time, we have grown 
the safety work force by over 4,500. If you put all that 
together, that is a cumulative $2 billion in cost avoidance for 
folks that are no longer on the payroll.
    Things like the contract tower program, which we take for 
granted now is a regular, recurring thing, is avoiding some $30 
million a year in costs that we would otherwise incur if we 
were operating those facilities. The realignment that our 
airway facilities folks went through in the last couple years 
that reduced the number of field offices almost in half and 
reduced the work force, the folks needed to man those offices 
by a thousand people. Those are real things.
    Mr. Wolf. Why don't you, for the record, flush them out a 
little bit and talk about the $20 million, why you think that 
figure is inaccurate?
    [The information follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                           faa reorganization

    Mr. Wolf. The Coopers report said, ``Perhaps the greatest 
challenge to the FAA in capitalizing on opportunities to 
improve efficiency through better business practices and 
reforms and to reengineer and restructure the regions, 
headquarters and business lines will be its culture and 
management's ability to change.''
    What specific changes have we seen along these lines?
    Ms. Garvey. Mr. Chairman, if I could ask for clarification. 
Are you talking the field, the regions, or broader than that?
    Mr. Wolf. Broader than that.
    Ms. Garvey. I think there are, and again I am going to 
speak specifically of my time at the FAA. Bringing in the CIO, 
bringing in some of the new management team has been a 
significant step forward.
    I want to speak a little bit about Free Flight and the work 
that they are doing in establishing performance measures. As we 
think about modernization, one of the real key pieces has been 
how are we going to know if we are successful and if it is 
working. Establishing some metrics and establishing some very 
measurable performance measures with industry, is something 
that that team is doing even as we speak. As we move forward, 
we can say sort of, in mid-course, Is this working? Are we 
putting our money where we need it? Where the industry says we 
need it? So I think those very specific performance measures 
are important.
    Again, we have had a lot of discussion today on cost 
accounting, but part of cost accounting is really understanding 
very specifically what the services cost. Those are the kinds 
of tools that we need. Establishing performance measurements 
for something like air traffic control, focus on the operating, 
establishing some of the benchmarks on some of the other 
initiatives are very important as well.

                   restructuring of regional offices

    Mr. Wolf. There are savings from restructuring your 
regional field office. The Coast Guard and Federal Highway 
Administration have already done this. FAA studied it a few 
years ago and found millions in savings were possible.
    Two years ago, Mr. Belger, you testified before the 
committee. You said, ``I have worked for the FAA for 24 years, 
and for all of those years it has been clear to me that there 
are enormous efficiencies that we could gain through looking at 
our regional structure. And that is going to be presented to 
the new administrator, and I would hope that he or she,'' he 
was visionary, he was able to say, ``he or she.''
    Ms. Garvey. Did he say ``or she''?
    Mr. Wolf. That is an exact quote, ``I would hope that he or 
she,'' he probably should have said ``she or he,'' ``working 
with you and the other folks on the Hill, would help us to make 
the right decisions in the next year or so about regional 
structure.''
    Mr. Belger, you obviously felt pretty strongly at that 
time. Yet, in contrast to other agencies, there have been no 
major proposals delivered on the subject. Can you and perhaps 
Ms. Garvey tell us what happened to those ideas or maybe both 
of you? It ought to be easier in some respects in the FAA than 
some of those other agencies.
    Ms. Garvey. I actually have watched with a lot of interest 
and talked with Ken Wykle about what they have accomplished at 
FHWA.
    We looked at the issue when I first came on board. In fact, 
I took a look at the Coopers study as well as the Mitre study. 
A couple of distinctions from FHWA. The regional offices that 
we have are much larger, so there certainly is an enormous 
issue associated with that, though it may be easier, as you 
pointed out. My initial reaction was that, frankly, we had so 
much to do on modernization, getting that in place, getting 
personnel reform, getting acquisition reform really under way, 
that that is really where I wanted to put my emphasis. I have 
asked people, though, to relook at the Coopers recommendations. 
In fact, there is a three-person team looking at the Cooper 
study, the Mitre study to see if we could revisit some of those 
issues.
    But in the meantime I do not want you to think nothing is 
being done. Ruth Leverenz, who is terrific and has worked very 
closely with this committee, is leading the regional 
administrators. They already came up with a very good change to 
process that we have in terms of moving.
    So the first step is, let's look at some efficiencies with 
the structure we have. A whole reorganization is an enormous 
undertaking for any agency, as Ken Wykle has said. I want to 
make sure we have gotten some of these other initiatives well 
under way and part of the culture before we take that on.
    Mr. Wolf. I think that is fair, though, and I think that is 
disruptive of people's lives.
    Mr. Belger, go ahead.
    Mr. Belger. Just very briefly, I guess I will never live 
down that testimony of 2 years ago, but I stand by it. We have 
made the right priority decisions up to this point. You know, 
at the end of the day we are going to be judged by the safety, 
the security, and the modernization record that we have, and 
that is where our priorities are. At the right time we ought to 
look at regional consolidations.
    But in addition to the example that the Administrator used, 
we are implementing changes within the regions in ways that we 
can more efficiently consolidate functions amongst different 
offices. There are several examples of that that I can talk 
about. I think we are making the right priority decisions right 
now.

                           cost controls--pay

    Mr. Wolf. Coopers said, ``Perhaps most important, the FAA's 
most significant cost element, pay and related costs, continues 
to grow at significant rates. This area needs significant 
attention as labor negotiations begin this year.''
    From the result last year, you obviously decided that these 
additional costs are necessary. But doesn't this lack of cost 
constraint on the biggest part of your budget put pressure on 
everything else in the agency?
    Ms. Garvey. I think it is absolutely critical and 
important. We are putting every measure that we can in place to 
contain costs. So, again, in addition to all the things we said 
this morning, we always have to be looking at ways to keep 
those costs down. As Ken Mead and others have said, it is 
particularly challenging when you have a budget that is made up 
primarily of personnel costs. We have to recognize that as we 
look at some of the efficiencies. I put a lot of hope on the 
kind of efficiencies we have talked about in our contract 
negotiations and our agreed-upon contract with NATCA. Asking 
people to take on more responsibilities as well as some of the 
other efficiencies that we have talked about are very 
important.

                             natca contract

    Mr. Wolf. You estimate that the new pay arrangement will 
cost approximately $1 billion over the next 5 years, or an 
average of $200 million a year. Your fiscal year 2000 budget 
appears to contain $70 million in new spending for this 
agreement. Does that indicate that you will have more 
significant increases in the future years of the contract, 
which could put even more pressure on the operating budget?
    Ms. Garvey. It actually goes down, Mr. Chairman. And I do 
again want to stress what Mr. Mead said this morning, that some 
of these efficiencies are difficult to quantify and put a 
dollar figure to. We are going to do the best job we can on 
that and try to measure that, but that is challenging.
    Mr. Belger. By far, the biggest pressure, Mr. Wolf, on our 
operations budget this year, the biggest chunk of 3 incremental 
years of these payments is in this fiscal year. That is clearly 
going to be the toughest. The incremental increases in the next 
2 years are less than this year.
    Mr. Wolf. So then in the fourth and the fifth they actually 
drop?
    Mr. Belger. Yes, sir.

                         contract negotiations

    Mr. Wolf. FAA is now negotiating a pay proposal with its 
two other largest unions. What is the status of these 
negotiations and have you estimated the potential cost 
increases that could be associated with these negotiations?
    Ms. Garvey. We have not done it to date, Mr. Chairman, 
because we have not really gotten to the issue about talking 
about the pay piece. We are still in the fairly early stages, 
although a little further along with PASS than a couple of the 
others, since they are still working on a number of the 
articles. They are working in earnest, I know, over the next 
couple of weeks. It may be at the end of that period there will 
have been significant movement. It has been a little slow 
going, but they are working hard at it. We also, by the way, 
promised both OMB and the Secretary's office that we will keep 
them well informed. We would like to do the same with the 
committee as we move forward.
    Mr. Wolf. Mr. Olver, any questions?
    Mr. Olver. Are you otherwise done?

                      national and dulles airport

    Mr. Wolf. No. I have a couple more I want to ask about 
Ronald Reagan Washington National Airport.
    What is your position on the legislation to lift the 
perimeter rule at Dulles Airport and raise the number of 
flights that can come into National, which I strongly oppose? I 
have not heard anybody from FAA speak out on the issue.
    Ms. Garvey. Mr. Chairman, as you know, in our proposal we 
have phased out or lifted the slots at Laguardia and Chicago 
O'Hare. We have stayed with National as it is legislatively 
directed.
    Mr. Wolf. So, Mr. Basso, you might want to answer since you 
are with the department, but you favor keeping it exactly the 
way it is, no additional slots into National Airport and not 
lifting the perimeter at Dulles?
    Mr. Basso. Mr. Chairman, I believe that is right, but let 
me get you a quick answer for the record. I am not as familiar 
with that as I should be.
    [The information follows:]

    The Department has not taken a position on specific 
legislation regarding an increase in slots or changes to the 
perimeter rule at Ronald Reagan Washington National Airport. 
DOT believes that decisions involving these issues at that 
airport reflect a balancing of the interests of the airlines 
operating at the airport with those of the surrounding 
communities. Congress is in a unique position to deal with 
those issues, along with local authorities, as the legislation 
creating the Metropolitan Washington Airports Authority 
represented a balancing of all these interests which Congress 
established. That legislation has proven to be very successful 
in developing Washington's airports and should be modified only 
after consideration by Congress and local authorities.
    At the same time the Department recognizes that from a 
purely economic perspective, the perimeter rule and the slot 
rule are intrusions into the marketplace. For this reason, the 
Department has proposed the elimination of the High Density 
Rule at New York's LaGuardia and Kennedy Airports and Chicago's 
O'Hare Airport.

    Mr. Wolf. And you are prepared to veto any bill that has 
that change?
    Ms. Garvey. There go those lights. [Laughter]
    Mr. Wolf. I tell you, to be quite serious about it, I think 
it would be a mistake. And as we were ready to end, I saw Ms. 
Kilpatrick come in. I want to give her some time.
    And I happened to glance out the window, and I saw snow, 
and it came back to me today, that U.S. Air crash. I had a town 
meeting that day in Arlington County. And a lot of people 
forget that. There are some who, in good faith, are not 
thinking back. There certainly is a noise problem if you were 
to lift the number of slots, but I think there is a potential 
safety problem.
    There have been times that the pilots, and perhaps Mr. 
Belger, you may want to comment on that, actually said that 
when they come into National Airport it is so dangerous it is 
actually safe because their adrenaline is pumping higher as 
they come down the river.
    There was an agreement with the people of Arlington County, 
which I don't represent, in Alexandria to keep that level down. 
The FAA had done a very poor job of running those airports. So 
legislation that Senator Warner and a group of us pushed was to 
transport those airports over to a regional airport authority. 
They have done a good job. And that is why I think it would be 
important for the department to allow people to know, because 
there has been a silence there.
    And there are good people on both sides. There are, and I 
stipulate that. I do not question anybody's integrity or 
anything else. There are good people on both sides. But I think 
this is an issue of local control that has done very, very 
well. To change the perimeter and then to allow more flights to 
come in is a potential safety issue. And this is the weather 
exactly on the day.
    Were either of you in town the day the U.S. Air crash took 
place?
    Mr. Basso. Yes, sir. I was.
    Mr. Wolf. It would be helpful, I think, to the 
administration.
    And, Ms. Garvey, I want to compliment you, too, on the 
record that the FAA has this year, too. It is easy to find 
problems as you go through a record. But I do not want that to 
be left out there that I personally think that you have not 
done a good job. I think you have. And you know I have told you 
that privately. I think it is only fair to say that publicly, 
too.
    So we are stressing issues that are of importance to the 
nation and to safety. And I worry sometimes there can be a 
potential safety problem. I know safety is the number one 
priority, and I think it would be helpful to hear from the 
Administration not in a political sense but just that this is a 
concern and this legislation has worked well and, therefore, I 
think it would be best to keep it.
    Mr. Basso. Mr. Chairman, on the perimeter rule, if I might 
add. Actually, I think the position we have taken, putting 
slots aside for the moment, on the perimeter rule was that we 
had not taken a position because that was basically a creation 
of the Congress. But I will get you more information on that 
and the slots as well.
    [The information follows:]

    DOT believes that decisions involving changes to the slot 
rule or perimeter rule at Ronald Reagan Washington National 
Airport are a balancing of the interests of the airlines and 
the surrounding communities and that Congress is well-
positioned to analyze and address them.
    With regard to the issue of safety, it has been and will 
continue to be the Department's top priority. The FAA air 
traffic management system limits flight operations to safe 
levels through a variety of air traffic control programs and 
procedures regardless of the changes in the number of slots. 
Because of such programs and the Department's overall emphasis 
on safety, changes to the slot rule would not compromise 
safety. It is FAA's Air Traffic Management System, not the slot 
rule, which ensures the safe operation of the air traffic 
system.
    The Department's emphasis on safety also applies to changes 
to the perimeter rule. Current runway dimensions limit the size 
and type of aircraft that can use Ronald Reagan Washington 
National Airport.

                           year 2000 problem

    Ms. Kilpatrick. Briefly, Mr. Chairman. Thank you very much.
    I am trying to cover two meetings, and I was just out in 
this snow. I am from Michigan. We had nine inches on the ground 
when I left. This is just a little thing. But they are closing 
up D.C. as we speak.
    For the safety issue, thank you very much, Ms. Garvey, for 
your testimony. I am sorry I missed the benefit of your 
testimony.
    The Y2K problem, how ready are we for it? Let me know that 
it is okay to fly and my colleagues.
    Ms. Garvey. I mentioned, Congresswoman, when you were not 
here, that I will be flying. So we are ready. We actually had 
established some dates in cooperation with OMB. We renovated 
our systems by the end of September. We are very focused now on 
a March 31st date to complete the major part of our validation. 
I was actually up at the tech center a couple weeks ago with 
some members of Congress as well, and we were conducting some 
of the tests there. They were going well.
    During the next 5 to 6 weeks we have some significant end-
to-end testing which is going to be very important. It actually 
begins in about a month, and that is going to be very important 
for us. But we are on schedule. We have an enormous amount to 
do, as Mr. Mead said, but I am very confident that we will be 
able to do the job. We have got some very good people working 
on it.
    Ms. Kilpatrick. You will let us know exactly when that 
completion is done and we are there?
    Ms. Garvey. Yes. As a matter of fact, our date is June 30. 
This is different from the OMB date of March 31, which is when 
the OMB folks would like everything done in Government. Because 
of the complexity of our systems and the fact they are 
interdependent, we laid out a schedule since we felt March 31st 
was not realistic. June 30th is. But I will also add that by 
March 31 we will have most of them completed. They will be 
validated and tested and so forth. June 30 is the date we have 
laid out with OMB, and we are working very aggressively on 
that. The summer months will be spent testing and retesting and 
making sure it stays as good as it is.

                             discrimination

    Ms. Kilpatrick. There has been a discrimination suit within 
the Department, some of the employees in aviation. What is the 
status of that and is it moving forward? Have you had a 
hearing?
    Ms. Garvey. We had a hearing about a year ago, on the issue 
of sexual harassment within the Department. We have done a 
great deal on that, including establishment of an 
accountability board that I believe is receiving very good 
reviews not only from the Secretary's office but also, most 
importantly to me, from our own employees. On a particular 
discrimination case, let me get back to you, because I am not 
exactly sure of the status.
    Ms. Kilpatrick. Do you feel that it is working?
    Ms. Garvey. Very well. We are getting an absolute 
commitment from the highest levels of management. As a matter 
of fact, we are expanding--it started as an accountability 
board for the issue of sexual harassment. We are expanding in 
hiring someone full time to run it and expanding 
responsibilities of that board because it has been so 
successful.
    Ms. Kilpatrick. Thank you, Mr. Chairman.
    Mr. Wolf. Mr. Olver.
    Mr. Olver. I am going to save mine for when I come back 
later because I need to get back elsewhere.
    Mr. Wolf. We are going to adjourn until 1:00 to give you a 
little time for lunch. Two of the witnesses are not even here 
yet. So we hope they will be here by 1:00.
    We will adjourn until 1:00.
                                            Tuesday, March 9, 1999.

                    FEDERAL AVIATION ADMINISTRATION

                   AIR TRAFFIC CONTROL MODERNIZATION

                               WITNESSES

JANE F. GARVEY, ADMINISTRATOR, FEDERAL AVIATION ADMINISTRATION, U.S. 
    DEPARTMENT OF TRANSPORTATION (DOT)
KENNETH M. MEAD, INSPECTOR GENERAL, DOT
ROBERT W. BAKER, EXECUTIVE VICE PRESIDENT FOR OPERATIONS, AMERICAN 
    AIRLINES
JACK FEARNSIDES, PRESIDENT, CENTER FOR ADVANCED AVIATION SYSTEMS 
    DEVELOPMENT, MITRE CORPORATION

                          modernization panel

    Mr. Wolf. We will try to move this along because I think 
the government is now closed. We are not closed. We are going 
to be here. I know Ms. Garvey does not care because she is from 
Massachusetts and is used to this, but for those who are not, 
we will try to make the hearing go relatively fast.
    I will not have an opening statement. We will just move 
straight into the panel. The first witness we were going to 
call was Mr. Fearnsides, but he is not here yet. He is taking 
the Metro because of the snow.
    Maybe, Ms. Garvey, we will go with you first, and then Mr. 
Baker and then Mr. Mead.

                          faa opening remarks

    Ms. Garvey. Mr. Chairman, members of the subcommittee, 
again thank you for the opportunity to appear before the 
subcommittee to testify on air traffic control modernization. I 
am really delighted to be talking about this issue because it 
is something I feel very strongly about. I think it is also one 
of our greatest opportunities, an opportunity that very few 
people get the chance to take on.
    The whole issue of modernization is an interesting one, and 
I bet if you asked eight people to define it you would get 
eight different responses. I want to take just a moment to 
define ``modernization'' as we see it at the FAA. First of all, 
there are three elements of air traffic modernization. The 
first element is sustaining our systems or renewing the 
infrastructure. The second element is additional safety 
features that provide more precise, accurate and more timely 
weather information, which is so critical to the safety of 
flight. And the third element is the enhancements that increase 
the capability, the capacity and efficiency of the system.

                     capital modernization program

    Very briefly, for infrastructure renewal a total of $2.3 
billion is proposed for the FAA's capital modernization program 
in fiscal year 2000. We are making significant progress in a 
number of areas. As you heard this morning, we have several 
major programs that are underway, that are either fully or 
nearly completed and will be in 2000. The display system 
replacement, a real success story for us, is ahead of schedule, 
and under budget. The HOST computer system will also be in 
place by October of 1999. Again, a year ago you may remember or 
slightly over a year ago this was really a very difficult issue 
for us. Our original plans to replace HOST was really much 
further into 2002 and 2003. Because of Y2K we really took on 
the issue of HOST and stepped that up considerably and we are 
going to meet that target.
    Also in fiscal year 2000 the FAA will be purchasing 24 out 
of 112 new terminal radars for conversion to digital output and 
50 out of 127 new beacon systems for air traffic control. So 
there are many, major projects to increase safety in 2000 that 
the FAA has taken on, and represent a real positive success 
story.
    I mentioned safety enhancements and that is very important, 
particularly as it relates to weather. There are a whole 
series--that we will enter into the record--of improvements in 
the terminal area and en route weather information to provide 
again more precise, more accurate information for controllers, 
for pilots and for the operators.

                      free flight phase I program

    With much of the older air traffic control system about to 
be replaced or planned for replacement, future programs are 
going to concentrate on new technologies and capabilities that 
address the third element, and that is very important, 
increasing the capacity and efficiency of the air traffic 
control system. That really brings us to Free Flight Phase I.
    As you may remember, a year ago when I was before the 
committee I talked a great deal about the need to have a 
consensus around Free Flight Phase I, around the early stages 
of modernization. I am very pleased with the work that we have 
been able to accomplish at the FAA, in cooperation and 
coordination with people like Bob Baker and Ken Mead. I think 
we have got consensus. I do not want to put words into Bob's 
mouth, but I heard him say this is really the first time we 
have had real industry buy-in and commitment. That is very 
important as we move forward.
    As we look at last year's budget and look at the kind of 
commitment that you all made with us around Free Flight Phase 
I, that reflects the kind of consensus that we have been able 
to fashion with industry and, I might add, with our unions as 
well. Free Flight Phase I has been organized into its own 
program office. Charlie Keegan is here today. And they are very 
much on target. A wonderful partnership, if you will, with 
industry.
    What we have said to industry is we will deploy the 
automation tools, but what you need to do for us is help us 
measure how well it is working. Are we really getting out of it 
what we want? The initial reports from Northwest, for example, 
at Detroit on Surface Movement Advisor (SMA) have been very 
positive. Northwest, for example, was able to prevent five 
diversions due to low fuel as a result of improved situational 
awareness provided by SMA.
    During fiscal year 1999 and fiscal year 2000, ongoing 
upgrades to the air traffic control centers and replacement of 
terminal air traffic control facilities are absolutely 
essential to provide the acceptable level of air traffic 
control service to meet the operational requirements. So we 
think Free Flight is absolutely the right approach, 
incremental. We had discussions this morning with Mr. Packard 
and others about some of the history of modernization and how 
we have not been able to deliver. That is what we are trying to 
do. That is what we are doing, delivering on something that is 
incremental, important and able to give us some very early 
results.
    So just to summarize again the three points of 
modernization: sustaining the infrastructure; adding safety 
enhancement, particularly as it relates to weather; and finally 
Free Flight Phase I, which is the first phase of modernization. 
Thank you very much.
    Mr. Wolf. Just for the record, Mr. Fearnsides just called. 
He is at the Metro and he has not gotten on yet, so we said if 
he cannot be here by 2:00 not to come. So you should know that 
you all may be the show, but he is going to try it make it.

                  american airlines opening statement

    Mr. Baker, we welcome you here and we appreciate you taking 
the time to come.
    Mr. Baker. Thank you very much. As I indicated, the first 
1,200 miles today were perfect and right on time. The last four 
were a little shaky through the snow. But I very much 
appreciate the opportunity to be here today and to give 
American's perspective on an issue which is extremely important 
for the future of the airline industry and I believe to the 
Nation as a whole. That issue is the crisis that we believe is 
coming if significant improvements are not made, and soon, to 
our country's air traffic control system.
    Let me preface my remarks by noting that timing is one of 
the most important factors to consider in this matter. What we 
are talking about is the creation, development, testing, 
installation, and implementation of new technology, which 
inevitably means long lead times, which means to be ready 
before we are in a crisis mode, we need to get started now.
    At the same time when we talk about managing air traffic 
control, we are also talking first and foremost about safety. 
We operate in a business where system failure is not an option, 
and our need to ensure the safety of air transportation means 
that we need to do everything slowly and carefully, which again 
means we need to get started now.
    So bearing in mind that modernizing our nation's air 
traffic control system will be a daunting, time consuming task 
and that the margin for error for that effort is zero, is it 
reasonable for us to be concerned about the capacity of the air 
traffic control system in the years ahead? In our view, the 
answer is clearly ``yes.''

                         capacity enhancements

    In 1997, American Airlines completed a study that 
demonstrated that without significant enhancements to air 
traffic control capacity, our Nation's air transportation 
system could be headed for gridlock in the early part of the 
21st century. Assuming conservative growth, and we assumed a 
2.3 percent annual increase in operations, we believed that 
traffic delays from congestion will increase at an accelerating 
rate.
    Our study found that by the year 2014, without 
improvements, the average flight within the United States 
domestic airspace will incur an average delay of about four 
minutes, which is almost quadruple the delay in the system 
today. Now, while a four-minute average delay may not sound all 
that serious, its operational impact would be extremely onerous 
for the following reasons:
    First, four minutes is commonly used as the upper limit of 
tolerable average delay for scheduled airport capacity studies. 
More importantly, four minutes actually represents a gridlock 
scenario when combined with the terminal delay at most of the 
Nation's 50 busiest airports, where terminal delays tend to 
average two to three times the average system delay.

                             system delays

    Our study also suggests that four minutes of average system 
delay is also associated with increasing departure queue 
delays, in other words, aircraft waiting longer to take off, 
where delays as long as two hours were observed at large 
airports in our computer base simulations. Our simulations also 
demonstrated that when the average delay goes up, the 
distribution of delays grows even wider. With an average delay 
of one and a half minutes, less than 1 percent of flights are 
delayed by more than 15 minutes. However, when the average 
delay approach approaches four minutes, the percentage of 
flights delayed 15 minutes or longer increases more than 
sevenfold.
    The wider range of delays implied by an average delay of 
four minutes or more helps explain why such a small number is a 
real threat to our operational integrity. But you must also 
bear in mind the effect that a delayed arrival tends to delay 
the aircraft's involved next departure. Whether we talk about a 
complex, intensive hub-and-spoke operation or a tightly 
scheduled point-to-point network, it does not take much to 
throw the entire day's schedule out of whack, delaying our 
customers and likely misconnecting their bags.
    As delays increase, the cost of providing reliable 
schedules tends to rise even faster, which can result in 
increased fares. This is accomplished by adding block time to 
our schedules and/or adopting less than optimal schedules for 
our customers. And as everyone who has experienced a crowded, 
chaotic terminal during a severe weather event knows, anytime 
an airline's capacity is restricted, the quality of our service 
for our customers declines rather dramatically.
    In our view, if we do not act immediately, we are as a 
nation going to find ourselves in a real airspace capacity 
bind. The good news is that we have identified the problem and 
as an industry we have been working hard to participate in and 
facilitate the improvement process.

                              free flight

    I think most of you here today are probably familiar with 
the concept of Free Flight. The term ``free flight'' originally 
emerged from ideas to gain greater efficiency by changing the 
present air traffic control system to one in which an aircraft 
could autonomously select the most efficient route, altitude, 
and speed.
    In an unprecedented collaborative effort by leaders of both 
government and industry, Free Flight has since matured into a 
far more comprehensive concept which culminated in the Free 
Flight Action Plan in 1996. With oversight from a jointly led 
government-industry Free Flight Steering Committee, which I co-
chair with Monte Belger, this plan includes specific 
recommendations that address the need to improve airspace 
efficiency and capacity in the near, medium, and far term.
    I think there are two very important accomplishments from 
this effort. First, we have a realistic plan; and second, we 
have in fact achieved a consensus of all the users, the FAA, 
and labor. While some of the near-term recommendations are low-
cost, intuitive improvements to the current air traffic control 
system, others are very complex, long-term projects that will 
require very large capital investments from both the FAA and 
ultimately the users of the system.
    The first phase of Free Flight has been dubbed, 
appropriately enough, ``Free Flight Phase I,'' and it includes 
four programs. These programs in priority are as follows: 
Collaborative decision-making, which involves better 
information sharing between the airlines and the FAA to get the 
most out of the capacity that we do have. The second is en 
route conflict probe, which will help air traffic controllers 
predict potential traffic conflicts earlier and find the most 
efficient solution. Third, Center-TRACON automation, which 
helps controllers more efficiently manage the flow of traffic 
arising at busy airports. And based on our early experience at 
D/FW, this is a clear winner that is very effectively doing the 
job. And, finally, Surface Movement Advisor, which helps 
controllers make the most of limited airport resources such as 
runways and taxiways.
    Free Flight Phase I originally included another program 
called Data Link, which was subsequently separated out of the 
program when the Data Link's funding baseline was approved by 
the FAA. Data Link will enable air traffic controllers and 
pilots to exchange more complex information, which studies have 
shown can help the traffic controllers handle traffic more 
effectively and which in turn can increase airspace capacity.
    It is worth noting that of the original Free Flight Phase I 
programs, Data Link is the only one that requires the airlines 
to make large investments in aircraft avionics. American 
Airlines has stepped up to a significant investment commitment, 
as we will equip a number of our next generation 737 aircraft 
with advanced Data Link avionics. We have also committed to be 
the prototype operator in Miami in late 2000 or early 2001 to 
begin testing Data Link in the actual environment.
    With the improvements included in Free Flight Phase I, plus 
Data Link, we can buy the 10 years we critically need to 
develop and implement the most sophisticated technologies that 
we need to meet the growing travel demands in the next 25 or 30 
years. One example of a longer-term technology is the use of 
synthetic vision capability. NASA has committed to a 10-year 
research investment over the next four or five years, but other 
agencies require funding to make this product a reality.
    However, as I said, timing is critical. Developing, 
testing, and implementing all of the necessary technology will 
take years. And during that time, as air traffic grows, 
congestion and delays will continue to increase. Just from the 
airlines' point of view, installing any single new technology 
in our aircraft will likely take three to five years. Multiple 
integrated technologies will take even longer.

                 national airspace system improvements

    In addition to providing the capacity for operational 
growth, improving the efficiency of the national airspace 
system will also enable us to create a much less 
environmentally offensive product. With less waiting on the 
ground and more direct routings in the air, we think emissions 
from aviation could be reduced by 15 to 20 percent.

                       global positioning system

    In addition to the technologies included in Free Flight 
Phase I and Data Link, there are some other technical 
innovations we think are critical to enhancing system capacity. 
In particular, we think Global Positioning System technology or 
GPS should, along with its companion systems, Wide Area 
Augmentation System or WAAS, and the Local Area Augmentation 
System, LAAS, should be endorsed as the navigational system for 
the next century.
    Although the technical details for GPS, WAAS and LASS are 
really quite complex, the integrated system has enormous 
potential for revolutionizing airspace management, and in a 
very cost effective way. More efficient airspace design would 
not be constrained by the cost, location, and number of ground-
based navigation facilities that result in circuitous fixed 
routing. This reduces fuel burn and emissions. More routes, 
because of GPS, can be put into the airspace where capacity is 
most constrained. More accuracy will improve predictability and 
consistency of aircraft flight plans, reducing the areas 
impacted by noise.
    In our view, GPS has enormous potential for improving 
national airspace management in a cost effective way. The 
government has already invested most of the money needed to 
develop GPS, WAAS, and LAAS and this is an excellent example of 
an opportunity to convert a system originally intended for 
military applications to commercial use. GPS is accessible to 
all airspace users, including general aviation, and at a 
reasonable cost; and it is extremely accurate, which, like any 
new technology, will enable us to make breakthroughs in ways we 
probably have not even envisioned.
    In conclusion, in our view the United States is rapidly 
approaching a crisis situation with regards to airspace and air 
traffic control capacity. The improvements needed will take 
many years to develop, test and implement, and demands continue 
to grow. The innovations embedded in Free Flight Phase I, Data 
Link, and GPS have the potential to deliver the improvements we 
need in the short term, but our narrow window of opportunity to 
avoid gridlock is indeed closing.
    I am sure everyone here would agree that commercial 
aviation is an important piece of our nation's economic 
infrastructure. Because the capacity of our national airspace 
literally defines our growth potential in the years to come, we 
stand ready to work with the FAA, Congress, and anyone else to 
help make the improvements necessary to ensure our continued 
contribution to our Nation's economic vigor in the years ahead.
    Thank you very much.
    [The prepared statement and biography of Robert Baker 
follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Mr. Wolf. Thank you.
    Mr. Mead.

                 Inspector General's Opening Statement

    Mr. Mead. I will summarize. I would first like to recognize 
the efforts of Administrator Garvey this past year and a half 
in facilitating oversight modernization programs and other 
activities at FAA. We have had access to meetings where open 
and candid discussion of problems, progress, and solutions are 
all discussed; and I think it is a different sort of 
relationship for the IG and it is a different sort of 
relationship for FAA. We aim to work at it, and we really think 
it is in the best interest of government to go on. I think we 
both feel very good about that. But it is something we all have 
to work at constantly. Is that not true?
    Ms. Garvey. We are doing very well.
    Mr. Mead. Much debate is focusing on financing of FAA. It 
should be pointed out, as alluded to this morning, that freedom 
from procurement personnel rules or increased funding really 
enables or facilitates management. They are not panaceas for 
the modernization program or any other current difficulties.
    I will talk just a moment about progress and problems. It 
is very important to point out progress. It is not proper for 
an auditor to dwell only on problems. There has been progress 
with HOST and DSR, as we alluded to this morning.
    Now STARS and WAAS each cost over a billion dollars and 
each is experiencing problems. Both STARS and WAAS are having 
software problems. STARS' problems are principally because of 
human factors, a set of human-factors issues, and you have had 
a couple of hearings on that particular subject.
    DOD, which is FAA's partner in the STARS acquisition, 
elected to receive full STARS with only a minimal number of 
human-factors changes. In light of the delays and cost 
increases associated with the STARS acquisition, we are 
recommending that FAA defer decisions on the full range of 
software development needed for human factors with full STARS 
until testing on the DOD system is complete.
    We believe work should continue on the software issues that 
we know have to be fixed. Once FAA sees how the DOD system 
works, FAA and the controllers will be in a better position to 
know what additional changes are essential to address civilian 
air traffic control concerns, and whether those changes need to 
be made all at once or whether they can be made incrementally.
    I will move to the WAAS system, the satellite navigation 
system. A recent Johns Hopkins study concluded that the GPS, 
with appropriate WAAS configurations, can satisfy the required 
navigation performance as the only navigation system installed 
in the aircraft and the only navigation service provided by 
FAA.
    But this study does not really say how long or how much 
that will cost, and it is plausible that the final system as 
envisioned by the Hopkins study will not be in place until 
2015. That is final system. That has important implications, 
because there will be a need to address what happens to the 
current infrastructure or establish an alternative backup 
system during the next 15 years.
    So we are recommending that FAA include the cost of a 
backup system of some type in their current satellite 
investment analysis. There is really no point in deferring 
that. We are going to have to have some sort of system in place 
for the next 15 years.
    The second area I would like to touch on, Mr. Chairman, is 
common threads in our work in FAA acquisitions. We saw three 
common threads. I would like to highlight those.
    When have you intensive software development, these 
acquisitions have typically resulted in large cost increases 
and major schedule delays. As I pointed out this morning, I do 
not think that is just limited to FAA. This factor has affected 
modernization's pace for more than a decade.
    And by way of contrast, the HOST system is pretty much on 
schedule. HOST is not a software-intensive acquisition. The 
STARS and WAAS acquisitions, which are, are experiencing some 
problems. The AAS system, which dropped off the screen several 
years ago, was software-intensive.
    Human factors, examining how humans interact with machines 
in ways to enhance operators' performance, is the second item 
because when you change the way humans interact with the 
machines, you have human-factor issues. Once human factors 
become an issue, software development is not far behind.
    What we have learned from STARS is that we have to deal 
with human factors early, and you need some type of procedure 
for deciding on the range of these human-factors concerns that 
will surface. You must decide when enough is enough, what is 
affordable, what is essential to do. That is an important 
lesson learned. In STARS, one of the difficulties is that these 
problems start cropping up at the eleventh hour, and all along 
they have been thinking that this is a procurement that will 
not involve a great deal of software development.
    Our third item is realistic schedules. I think there is 
pressure on every agency to show or to indicate that it is 
going to be able to bring home the bacon quickly. FAA has not 
been too much of an exception to that rule, and often when FAA 
announces a schedule, it does not allow a lot of time for 
testing or development. When you are dealing with a technology 
that is not very mature, it probably behooves you to stretch 
out those schedules to leave a lot of room.
    Some opportunities lie ahead. They say the past is 
prologue. I think it is for two important programs Mr. Baker 
alluded to, and so did Ms. Garvey: Free Flight and Data Link. 
Both those initiatives will be big-dollar initiatives by the 
time you are done with them. Both will offer considerable 
potential for more efficient handling and routing of aircraft. 
Those have similarities with past modernization efforts. They 
have attributes of being software-intensive, and they will both 
involve very important human-factors issues affecting not just 
controllers but pilots. FAA is aware of this.
    We are encouraged particularly by the fact that Free Flight 
and Data Link are proceeding as pilot projects, at selected 
locations. That way, design problems and human-factors issues 
can be effectively addressed before a commitment is made for 
national deployment.
    Finally I would like to touch on Y2K. As mentioned this 
morning, FAA has 425 mission-critical systems, and the 151 
systems they needed to repair have been repaired. FAA has made 
enormous progress here, and what lies ahead is making sure that 
each of these repairs is now fielded at each facility using the 
system.
    With respect to the aviation industry, I feel confident 
there is a very improved sense of awareness by the industry. 
The industry is sensitive to this. I cannot speak directly, 
though, as to whether industry is Y2K compliant or not. The 
most important concern I have is with foreign air traffic 
control. And it is what we do not know that is the greatest 
concern to us, what we do not know about what is happening in 
foreign countries.
    Finally, just a word on runway incursion technology. Runway 
incursions are an important safety area that FAA needs to pay 
attention to. It is one of FAA's top safety priorities. Runway 
incursions have gone up about 73 percent since 1993.
    FAA has a technology designed to notify air traffic 
controllers of potential conflicts on the runways. I think this 
technology needs to be moved along. It is very much needed. 
These runway incursions are similar to midair near-collisions 
except they happen on the ground. It is when two objects come 
perilously close together.
    That concludes my statement, Mr. Chairman.
    [The prepared statement of Kenneth Mead follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Mr. Wolf. Thank you very much.

                        y2k date change problem

    Mr. Baker, we will begin with you, if we can, on the 
question of Y2K Mr. Mead just mentioned. You flew down to 
Honduras. I believe American Airlines serves that area. I flew 
one of your flights down there. I had a daughter who was on a 
mission project down there for two years. How do you think they 
are going to do with regards to the Y2K problem, looking at 
Hurricane Mitch and the lack of resources?
    I know American Airlines is going to do a good job. I am 
not worried about that. How do you feel about some of the 
countries that most of us do not fly to, such as Uzbekistan or 
Albania or places like that that other relatively good airlines 
fly to? How do you see that falling out?
    Mr. Baker. Well, I share Mr. Mead's concern about some 
foreign air traffic control operations, and I would add to that 
airports. We found in our domestic work with the Air Transport 
Association in which we have gone through all of the U.S. 
airports looking for the issues at hand with Y2K, that there 
are many in airport fuel systems, power grids and so forth.
    So we have to take a look at the airports in foreign 
countries as well. We are working and have mounted an effort, 
although it started quite a bit later with IATA, to try to get 
our arms around the foreign airspace and foreign airports. We 
have got a lot of work left to do in the remaining months.
    That clearly is our exposure as an international airline. 
We are going to be extremely conservative about operating, and 
we are going to make sure that we are comfortable that they 
have done the work and tested it before we launch our aircraft 
into those areas. But they are significantly behind everything 
you see going on in this country, in my view.
    Mr. Wolf. Well, not to pick on Honduras, because those 
people have suffered so much, but how do you see that? That is 
a dangerous airport as it is landing in Tegucigalpa, Honduras. 
Are you concerned for January 1, 2, and 3?
    Mr. Baker. What we will be doing over the next several 
months is trying to develop, if you will, manual procedures 
that will allow us to operate without being reliant on the air 
traffic system in the terminal area. We are going to have to be 
dependent on their air traffic to get us to the terminal area, 
and then we are likely to be restricted to visual operations 
until we can test and make sure that they are where they should 
be. As you said, Tegucigalpa is a challenge on a good day. But 
we are going to be inclined to be manually oriented in visual 
operations until we get comfortable.
    Mr. Wolf. I know your airline will do that and I am not 
concerned, and I know that Delta and USAir and United and 
others will as well. Should the FAA be doing anything to notify 
the traveling public who are thinking about taking a vacation 
in Russia in January, or in China, or going into some of the 
far-off regions of China, or if you were flying to Azerbaijan 
or some place like that? Should we be letting the American 
traveling public know?
    Mr. Baker. I think clearly that the FAA ought to be 
strongly linked to IATA, which will be firsthand getting 
involved in the rest of the world. We are only really concerned 
with where we operate necessarily, but IATA has the whole world 
to deal with and is building a database that will give us some 
indication of where we are.
    To the degree that prudent people who understand these 
things come to the conclusion that there is high exposure, then 
I think we have nothing else to do than to tell the American 
people what to expect.

                       code-sharing and alliances

    Mr. Wolf. I went to the Balkans two weeks ago and I 
purchased a ticket on Delta, because I fly American obviously 
if I can, and I flew Austrian Airlines. I got to the Delta 
counter and they sent me around to Austrian Airlines. I said, 
no, I have a Delta ticket. They said, no, you are flying 
Austrian today.
    With all the airlines that you have agreements with now as 
we go out, what is the obligation so you do not go to 
Azerbaijan but you may be networking with somebody who does go 
there? What is the responsibility? And maybe I can ask Mr. 
Garvey, as administrator, what is the responsibility?
    Ms. Garvey. Let me speak to two pieces if I could, Mr. 
Chairman. One is that as part of our Y2K effort we have a 
person who is assigned to the international. He has got a very 
good team and is spending a good deal of time in Montreal 
working with both IATA and ICAO.
    We had two resolutions that were introduced at the assembly 
last September that are very significant resolutions worldwide. 
One was that criteria had to be established internationally for 
what Y2K compliance is all about, what were we looking for. 
That had to be established in January. In June of this year 
every country had to reveal, if you will, what they have done 
in Y2K, so that we have a sense of the status of every country.
    It was surprising because the issue of privacy in foreign 
countries is sometimes stronger than it is here in terms of 
press and public notification, but it was adopted I think 
pretty much unanimously. I was there for the presentation of 
the resolutions. We think that is going to be very important. 
By June we will know. Frankly if a country is not willing to 
say where they are on Y2K, that is something that is telling as 
well. So that has got to be in place by June 30. We will be 
working not only with ICAO and IATA, as Bob suggested, but also 
taking that information, sharing it here with the American 
people but also obviously with the airlines.
    I think as we move forward in the summer months we will 
have a much clearer sense of where our colleagues are 
internationally. We are in an awkward position because we 
cannot really dictate their work. But I think we can provide 
some leadership and also, as you have suggested, letting the 
American people know what the status is and where do we feel 
very comfortable.

                  year 2000--international compliance

    Mr. Wolf. Well, I hope that you will post something. I 
wrote the President at the end of the year, January 1 or 2 or 
December 28th, asking that he go on television and address the 
American public on the whole Y2K problem. My concern is that 
there will be panic more from lack of knowledge than from the 
reality of it. And I am sure if you go out in my district 
today, into Giant and Safeway, people are stocking up with milk 
in anticipation of something. Lack of knowledge creates fear.
    Obviously, I do not carry very much sway with the 
administration, because I received a letter back from the OMB 
kind of not answering me. And I think the more information--and 
we are not going to get into banking and other areas, but with 
regard to transportation I would urge, and perhaps you have 
already promised, that the FAA do an update. Because people buy 
these tickets, particularly missionaries and people who frankly 
live in difficult parts of the world, buy them because they do 
not have a lot of money and they have got to go, and I think 
the businessman is going to know when he is flying whether or 
not he is going to have his company check.
    But just like we did on the Pan Am 107 flight, notification 
was posted at the FAA with regard to their travel advisory, but 
the people who flew on that plane did not know. I would ask 
that you do something, certainly by Labor Day, to notify the 
American public so that if they are flying to China or if they 
are flying to Azerbaijan, and I am not picking on any country, 
wherever that may be, that we tell them what the conditions are 
and then as we come into the early part of the fall, perhaps 
Thanksgiving, that there be a notification if it is not 
appropriate to be going into those regions. Because I am 
concerned again that those who do not have the information and 
are not plugged in and are not part of trade associations and 
companies are going to be the ones that potentially suffer.
    I think Mr. Mead should fly to Tegucigalpa. We have now 
found Mr. Pastor was wondering what flight he could go on, and 
that would be a good one to go on. So you will do that?
    Ms. Garvey. Yes, Mr. Chairman.
    [Additional information follows:]

    The FAA has taken a global leadership role in addressing 
the Year 2000 problem within the international aviation 
community. While we recognize that we do not have regulatory 
authority and cannot require any foreign country to become Y2K 
compliant, we can gather information and share it with the US 
flying public. Working closely with the International Civil 
Aviation Organization (ICAO), the FAA will be gathering 
available Y2K compliance information on foreign air traffic 
service providers, airports and air carriers. We plan to then 
analyze this data using an Aviation panel made up of 
representatives not only from FAA, but also from Department of 
Transportation, Department of State, and Department of Defense. 
Based on the conclusions drawn from this analysis indicating 
that the current level of safety might be affected, FAA will 
make the appropriate notifications/recommendations. Any travel 
advisory recommendations will be handled through the Department 
of State.
    Since the ICAO Assembly Resolution regarding Y2K compliance 
requires that each of the 185 Member States report its status 
by July 1, 1999, it will be at least July 15th before 
preliminary information is available. We expect that follow-up 
action will be required to get more thorough reports from some 
Member States. FAA will actively pursue this information 
through both ICAO and FAA International channels. Our projected 
timetable will allow us to complete our analysis and make our 
initial notifications/recommendations during the September/
October timeframe. We will continue our analysis and follow-up 
through December, 1999, to ensure we have the best air safety 
information available within the International aviation 
community.

                            NAS ARCHITECTURE

    Mr. Wolf. Mr. Baker, the NAS Modernization Task Force 
believed that the FAA's original architecture plan presented 
too many risks, cost too much, and did not resolve important 
institutional issues. How does the agency's current plan 
address those problems, especially in the sequencing in various 
development programs?
    Mr. Baker. I think what we are able to accomplish leading 
up to Free Flight Phase I and the articulation of that is a 
full analysis of some 50 individual projects, and we tried to 
put them in a reasonable order in priority as well as the 
timing of near, medium, and long-term, and articulated the 
risks of those which were released back in 1995 and 1996. So I 
think what we have done is we simplified it, we have got it 
down to bite-size chunks, if you will, that we and the FAA and 
the other users of the system can understand and manage.
    And that is what the task force is really up to today, and 
that is monitoring that process, keeping the pressure on, if 
you will, to achieve accomplishment, trying to help with 
funding and other technical risk issues by providing in-kind 
aircraft to do test things and so forth. So I think we have 
boiled it down into something we could go forward with. I think 
we have a decent plan that is practical, and it shares the 
consensus of all the users for the first time, so I think we 
have come a long way.

                   free flight--software development

    Mr. Wolf. With past and current modernization efforts, FAA 
has demonstrated an inability to properly oversee and manage 
software development activities. Problems such as those in AAS 
and LAAS and STARS that Mr. Mead was referring to are directly 
linked to difficulty in developing software.
    Controller-pilot data link communications, a key technology 
for free flight, has been delayed because of software 
development problems. Do you believe the FAA's management of 
software development activities has improved sufficiently to 
allow them to avoid serious software problems in free flight?
    Mr. Baker. I think they made great progress in project 
management in a more global sense, not just software, because 
inevitably there is hardware involved in these projects as 
well. Bringing these large integrated systems on board is a 
challenge for both the private sector and government. Don't for 
a minute believe that we in the private sector do not have some 
of the same difficulties, problems in latenesses and overruns, 
because we do. They just do not get quite as much visibility. 
So we recognize the challenge of managing these things.
    I believe if you look at the Y2K project, which has been 
very visible and controversial, they seem to have brought that 
through the hurdles of development and project management with 
lots of people involved. The early stages of free flight are 
clearly on target. So I think there is a rather dramatic 
improvement in the project management at the FAA. Whether it is 
adequate to the challenge, I think we are all going to have to 
work hard to make sure it is, but great improvements than say 
10 years ago, 5 years.

                             human factors

    Mr. Wolf. With dramatically downsized versions, several of 
the operational enhancements called for in Safe Flight 21 
present significant human factors challenges for both 
controllers and pilots. On STARS we were faced with the whole 
human factors issue that Mr. Pastor mentioned earlier today. 
From what you have seen, has FAA taken adequate steps to ensure 
that controller-pilot human factors and work load issues are 
being addressed?
    Mr. Baker. I do not believe that we can ever do enough 
there, and that is certainly the area that we are the weakest 
on as an industry and a government working together. We have 
underestimated the importance of that as we have introduced the 
modern digital airplane. We are now backtracking on that at the 
airlines, in terms of our pilot training has been dramatically 
changed over the last couple years in recognition of that.
    So I think we have a lot of work to do there. I am not sure 
we have enough qualified resources either at the airlines or 
the FAA to be absolutely confident we are covering all the 
bases, but we have recognized it as a big exposure, and I think 
therein lies the potential solution, the fact that we recognize 
it.

                              free flight

    Mr. Wolf. Two other questions before I recognize Mr. Sabo. 
I will tie them both together. At an avionics conference last 
year, a manager for Delta Airlines commented that shifting the 
responsibility for aircraft separation to the pilot could 
increase cockpit work load so much that pilots might apply 
larger buffer zones around the aircraft than we see today. 
Since we are pursuing these technologies partly to increase the 
efficiency and decrease separation, comments such as these are 
troublesome. What guarantees or what are your thoughts? Do we 
have that free flight technology that will lead to closer 
separation?
    That is the first question. I will tie the second in. The 
same speaker offered the opinion that because it moves the flow 
of information from pilots' ears to their eyes, data link 
communications could actually increase the chance of mistakes 
since one pilot is in the loop rather than two.
    Mr. Baker. I guess I do not share the view that we are 
necessarily shifting separation responsibilities to the 
cockpit. We are going to do things differently. We are going to 
get away from a command and control system to a system in which 
the automation tools will look for the conflicts and then the 
humans inject themselves in to deal with that potential 
conflict.
    But I do not think we are simply thrusting all of the 
separation up to the cockpit, nor do I think that is a good 
idea even if it were a part of free flight. I think we are 
giving both the controllers and the pilots better tools which 
will allow us to hopefully shrink separations over time to get 
that capacity we need, plus use airspace which today is simply 
not available to us.
    So I do not share the view that this is a high risk in the 
way we are doing it. Clearly I can tell you that the 10,000 
pilots of American Airlines are not going to let us do that. So 
we have lots of checks and balances in my cockpits if they 
perceive we are pushing on the edge of safety here.
    Mr. Wolf. Mr. Sabo.

                       fy 1999 operations funding

    Mr. Sabo. Thank you, Mr. Chairman.
    Ms. Garvey, first an operational question. I get some 
indication you are having trouble with operational funding for 
the current fiscal year.
    Ms. Garvey. We have had some real challenges with that, but 
we are taking steps to monitor those challenges. We put in 
place some restrictions, for example, on travel, some 
restrictions on nonessential hirings or hirings that we might 
be able to defer, and we are monitoring it very closely.
    I think one of the challenges in the past at the FAA is 
that I am not sure we have always understood very clearly as we 
moved through the year just exactly--I am not sure we have had 
the same kind of control. We, for example, had a briefing last 
week on the first quarter, just exactly where did we spend it? 
We are trying to stay very close to obviously the appropriated 
language, what are the implications, what is occurring, are 
there places where the costs are not as we anticipated? As I 
said, monitoring very closely.
    Mr. Sabo. Could you give us some report what your 
projections are for the current fiscal year and where you are 
cutting back?
    Ms. Garvey. I can give you some now and certainly provide 
more for the record. But essentially, as I mentioned, we have a 
freeze on hiring particularly for nonessential; there are some 
exceptions but very few. Some controls on travel, which I have 
to say is sometimes difficult, particularly for some of our 
lawyers and so forth who travel to court cases. We put some 
constraints on some of the training, which I mentioned a little 
bit earlier. And I would be happy to supply even more detail to 
you for the record.
    [Additional information follows:]

    I have taken the following steps to reduce costs in fiscal 
year 1999:
    1. Reductions in support activities have been made. I 
recently sent out a memorandum prohibiting non-safety hiring 
and restricting non-operational, non-training travel, and non-
essential supplies and space acquisitions.
    2. Marginal reductions in three general operational areas 
have been made--(1) system redundancy and maintenance, (2) 
certification activities, and (3) safety and security staffing, 
travel, and training.
    Some of the specific reductions that have been made are as 
follows:
    Delayed hiring in Airways Facilities and Security until the 
end of the fiscal year;
    Decreased staffing levels in Regulation and Certification 
by 200;
    Reduced contract maintenance;
    Reduced stocks and stores;
    Reduced technical training (but staying within the levels 
directed in report language for ATS);
    Eliminating redundancy in the telecommunications area;
    Deferred maintenance productivity programs such as NIMS, 
OCC and the Engineering Center;
    Reduced the number of systems scheduled to transition to 
Operations from F&E
    Deferred implementation of initiatives in the regulatory 
reform management plan and other support contracts;
    Reduce existing K-9 programs and do not expand to 
additional airports; and
    Deferred implementation of the airport vulnerability 
assessment program.
    It is my intention that the reductions in certification 
activities and safety and security staffing, travel, and 
training will be one-time reductions that are restored next 
year. Throughout the remainder of this year, we will continue 
to look at ways to reduce costs without affecting our safety 
and security missions. If we are able to identify other areas 
where savings can be taken, we will adjust the list of items on 
the current list of reductions to restore the most critical 
items. Of course, the ability to restore the reductions will be 
dependent on receiving the requested levels of funding for 
fiscal year 2000.

    Mr. Mead. I would like to supplement that. One area I have 
some concerns with is these operations cuts. It is not in the 
controller area per se, it is in regulation and certification, 
which includes safety inspections. FAA needs analysts to review 
safety data and target inspections, which you have heard before 
in this committee. They are facing some fairly significant 
cuts. Not only are they reducing hiring in that area, but they 
are cutting back on training or deferring training. I guess 
they would say they are deferring hiring and deferring 
training. But that is an area of some concern.
    Ms. Garvey. I would agree with what Ken is saying. I am 
hoping this is not going to be long-term for us even for this 
year; that we may, as we move through the year and see some 
places where the costs have not been as we expected, that we 
can deal with that.
    One of the issues before us is not, can we hire folks but 
can we provide the right kind of training? And without the 
right kind of infrastructure and training for new people coming 
in, we are not sure we want to do that at this point. But that 
is critical.
    One other point, and I want to make this point because I do 
not think we have had an opportunity to do this in the past, we 
are really examining our base. So we are examining all of those 
elements of the base, things that we have taken for granted. We 
are asking ourselves some very tough questions: Are there some 
elements here that we need to stop doing, given where we are? 
Are there some things that could be assumed by the private 
sector? Are we duplicating some things that more rightly could 
be provided, particularly in the area of some of the services, 
by the private sector?
    There may be some opportunities there. I do not want to 
suggest that it is a silver bullet or a panacea, but I think it 
is the right time to be looking at the base of our budget.

                      most critical airline issues

    Mr. Sabo. Mr. Baker, I am trying to figure out as it 
relates to the picture you paint of potential gridlock or 
whatever one might call it in the next turn of the century, 
where are the most crucial problems? I suppose that we have the 
en route problem, we have the technology of getting planes 
landed, and then the capacity of the airports themselves. And 
sort of listening, my sense was we have major en route 
problems.
    Mr. Baker. Well, we will, as we grow the industry at 
roughly 2.3 percent a year, begin to completely fill the en 
route system as we know it today as a fixed route system for 
the most part; and then eventually we start putting so much 
pressure on the airports that we will not be able to run 
takeoffs because of the demand for landing. So they very much 
work as a system, and I think we have capacity issues in both 
portions of the system.
    The en route area, though, is where we need to deal first 
in my view, and then having used all of the runways, deal with 
runways, which of course is a host of other problems to build 
runways in our country. So I think it is both, but clearly the 
en route is where the opportunity is.
    Mr. Sabo. By en route, I guess I am separating en route 
from when they are close to the airport and handling the actual 
landing and takeoff.
    Mr. Baker. I will break it into three. En route, then 
terminal area immediately around the airport, and then the 
airport itself.
    As you can see in free flight phase I, we are doing some 
things to deal with all portions of that system. The one I have 
highlighted that we had implemented at D/FW recently to 
sequence aircraft for the multiple available runways to 
optimize runway use is an area where we are optimizing both 
runways and the terminal area. So we gain capacity there, and 
in fact it has proven to operate just that way, very 
successfully.
    Mr. Sabo. Thank you, Mr. Chairman.
    Mr. Wolf. Mr. Olver.

              waas and mitre corporation opening statement

    Mr. Olver. Thank you, Mr. Chairman. We have danced around a 
little bit this morning the issues around WAAS and STARS, and I 
guess we heard where they stand now except that I have not 
heard from Mitre Corporation, which had difficulties with the 
oldest of technologies, namely the snow removal system I guess 
it is, or something like that, one of the old ones. But then we 
come from the Boston area, and there the Lord brought it and 
the Lord will take it away, essentially.
    Mr. Fearnsides. I do not think we are as used to dealing 
with snow in Washington, Mr. Olver, as we are in Boston, 
unfortunately. But the Metro did get me here.
    I would be happy to answer, to make a statement about WAAS 
if you would like. It is in my opening statement, which I will 
just submit for the record in lieu of my arriving late. But as 
that statement says, we are doing a study right now for the FAA 
that follows up on the Applied Physics Lab study that was done 
and showed that GPS as a sole means or sole service system was 
technically feasible.
    The issue now is the pace and timing for a transition to a 
satellite-based navigation system that would serve all of the 
users. We are doing both a technical analysis of what the 
technical transition would look like and an investment 
analysis. The investment results are due by midsummer but the 
technical results are nearly finished. And I can say a couple 
of really positive things.
    First is that the need for this transition plan is pretty 
imminent. The whole world is waiting for the U.S. to have this 
transition plan so we can take leadership in this satellite-
based navigation area. Second is that WAAS and LAAS are going 
to be needed. And I think the third and most important point is 
that the investments that have been made in WAAS Phase I to 
date have been good investments.
    It looks very much like the path that we are on is a path 
that will lead us to at least, a predominantly satellite-based 
navigation system. And as we finish up this report, as I say, 
the main issues are going to be pace and timing. But there is 
no remaining doubt that we are headed towards a satellite-based 
navigation system.
    [The prepared statement of Jack Fearnsides follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        standard terminal automation replacement systems (STARS)

    Mr. Olver. Well, Mr. Chairman, I hope you are not going to 
charge me all of that time. I really was not intending to give 
Mr. Fearnsides the opening to make whatever testimony he was 
going to in whatever time he was going to take. I wanted to 
refer to, actually go back to what was said this morning.
    Mr. Chairman, you had in one of your questions referenced 
the comments made by the gentleman from the Air Transport 
Association, which roughly were that the capital program 
exceeds 50 percent of its overall budget. This is not in its 
totality. Is there any organization, public or private, which 
can manage a complex, innovative, high-technology capital 
development program which exceeds 50 percent of the 
organization's overall budget?
    If one looks at STARS, my read on this one is that we have 
a program which was estimated to cost something like $900 
million about five years ago and now it would appear as if it 
is now being estimated to cost slightly over $1.2 billion.
    Of course, in the case of WAAS, which looks as if Mr. Mead 
has commented that we may not be finished with that until the 
year 2015, I do not know whether any estimate that we might 
make at this point for what that will cost us by the time it is 
all done and in place, whether it was estimated to be $1.4 
billion or whatever and now thinking is maybe it will be as 
much as $3 billion or what. I do not know how we would make 
estimates of that sort. I think it is surely a problem for an 
agency to deal with that heavy a capital program. There is no 
question that that would be the case.
    I am sort of curious, do you folks at the table think that 
the $300 million or something like that which seems to be the 
re-estimation of what STARS is going to be at its completion, I 
hope that final number is fairly good, the $1.2 billion, is an 
unusual number, a particularly poor number, anything of that 
sort? Anybody who wants to answer it.
    Mr. Mead. I will take that one. No, it is not unusual at 
all.
    Mr. Olver. Well, not unusual, yes. But there may be some 
suggestion that all these things are usual. Shouldn't it be 
expected even?
    Mr. Mead. No, I would not go so far as to say it should be 
expected, especially an acquisition that the FAA thought 
originally was off-the-shelf. This turned out not to be a 
commercial off-the-shelf acquisition.
    Mr. Olver. If we thought it was going to be off-the-shelf, 
how could it possibly then now be something that we would even 
want? The technology goes so fast in these days anything that 
is five years old is already obsolete, and in many areas it 
does not even take anything that long.
    Mr. Mead. Well, from where I sit, sir, what happened was 
that this technology that they bought was in fact in use in 
other places in the world by other air traffic controllers. FAA 
and DOD bought it. The procurement was going along. There might 
have been a few bumps in the road, but things were going along 
rather smoothly until the air traffic controllers took a look 
at it and they said they had a set of problems that were show-
stoppers. Once that happened, this committee in fact had a 
hearing and a set of human factor issues came up at this 
hearing, and they were ones that you probably would agree, 
things that, yes, you would want to fix.
    But after that Ms. Garvey asked the controllers, ``Well, do 
you have other human factor concerns?'' Processes were put in 
place, these things were aired, and a hundred came out of the 
woodwork. Once that happened, the contractor said, ``Wait a 
minute, this is no longer off-the-shelf. I have got to make all 
kinds of software changes.'' That is what contributed to the 
cost increase.
    Mr. Olver. This was a system in which none of these human 
factors had shown up in the places where it was already in use 
around the world and they only appeared here? And this was 
really something that could be off the shelf?
    Ms. Garvey. I think this is known as a handoff.
    Mr. Olver. It will get handed back and forth, probably.
    Ms. Garvey. Congressman, I will just make a couple of very 
quick points. One is that Ken, Mr. Mead, is absolutely right. 
This was an off-the-shelf. It was a little bit before my time, 
actually, when it was first discussed. I think as an agency, we 
could have done a much better job of involving the controllers 
earlier on in the process. You have to get buy-in from the 
people who are going to use the system and who know it best. 
Frankly even in those places like DOD where it still is not 
quite off-the-shelf but it is closer to off-the-shelf than what 
we have now, and in other countries the area is much less 
complex, the traffic is much less. So I think the controllers 
had some very, legitimate points.
    I really want to stress this is not a question of just sort 
of, you know, whatever you want. There really were, and I think 
it was pointed out in this committee, some very legitimate 
issues. And if there is a lesson learned, the Inspector General 
talked earlier about lessons learned. One is we have got to 
involve people early in the process.
    The second lesson is one, as Bob Baker said, I am not sure 
we have fully come to grips with yet. In understanding human 
factors, we also have to understand when is enough enough. We 
talk about exit criteria. I have talked with my colleagues in 
other countries. No one really has exit criteria. It is a kind 
of a new thing for all of us.
    We have had discussions with the controllers, and I think 
we are seeing it very clearly in Free Flight, and with our 
other unions as well. When folks are involved earlier, you may 
not have a formal list of exit criteria but you sort of know it 
a little bit better, this area of how do you establish exit 
criteria is very important.
    Mr. Olver. Well, I remember a project in which some of us 
have been involved, though, in one way or another over a period 
of time. Some wish we hadn't been, I suppose. It started out 
with an estimate of about $3 or $3.5 billion in 1986, that by 
1994 or so was up around $13 billion or so, and we have been 
struggling extremely hard to keep it somewhere around $11.5 or 
$12 billion, and that was in a settled technology.
    Here we are talking about technologies which are right on 
the cutting edge of electronics and computerization and such, 
and I don't really--I don't see how--I think that seeing STARS 
end up with something like a third or so more than maybe was 
expected five years ago is really a wonderful record compared 
with other--I don't see how we manage in these highly 
technological areas to do anything close to that.
    In general, by the time you do the planning and the 
environmental work and the contract development and the RFPs 
and back and forth, and finally get the work or the development 
or the construction or the manufacture done, you have almost 
forgotten what it is you wanted in the first place, and you 
have moved on a few years in terms of where the technology is. 
And you try to see if you can't improve that as you are going 
along. I think that what we are seeing in the case of STARS is 
probably very good.
    Ms. Garvey. Thank you, Congressman. I was just wondering 
why you had to re-up the other project on me.
    Mr. Wolf. Ms. Kilpatrick.

                        air traffic controllers

    Ms. Kilpatrick. Thank you, Mr. Chairman. As a new member of 
the subcommittee, I am going to be much better next year and 
know much of this that I am asking today, because I know a lot 
of it builds on what has already happened.
    In the early '80s air traffic controllers were decertified. 
Today are they old or are they efficient? Ms. Garvey?
    Ms. Garvey. I think we have an excellent work force. I 
think it is the best in the world. They are a superb group, and 
by the way, that is mainly true in the FAA as well, not just 
the air traffic controllers. But they are the best in the 
world.

                       fy 2000 faa budget request

    Ms. Kilpatrick. Glad to hear that. You know, the budget 
that we are debating today, the 2000 budget, will it be less 
than what you received in 1999?
    Ms. Garvey. It will not be. It is slightly higher. I wish I 
could remember the percentage. It is about 4 percent higher.
    Ms. Kilpatrick. And is that adequate to carry out the 
mission of the air traffic controllers, training, hiring 
staffing and some of the things that the IG mentioned? Should 
we be concerned about those?
    Ms. Garvey. I think that it is a very good budget for us, 
and certainly if the President's budget were accepted, we would 
be very happy with those numbers. Comments that have been made 
today about management controls and cost containments are 
things we have to do regardless of the size of our budget.

                             training needs

    Ms. Kilpatrick. I believe that administrative efficiencies, 
that ought to be number one. You ought to take care of those 
whenever you can. The lack of hiring, the low training that I 
am getting letters on, some of your employees feel that they 
need to be better trained, that they aren't ready; that safety 
is at risk. Are they shooting in the sky or should we be 
concerned?
    Ms. Garvey. I think training is always an issue, and I 
mentioned a little bit earlier when we have some of the 
constraints, we tend to look at training. One of the first 
things we are taking a look at, though, are there ways that we 
can provide some of the very critical training perhaps more 
efficiently. I will say, though, in areas of safety, whether we 
are talking about putting out new equipment that is brand new 
to our work force, or technical training for controllers we are 
finding the dollars to do that kind of training. Some of the 
management training and some of the executive training that we 
have done in the past that I would love to see us go back to, 
we just haven't been able to do. But certainly in terms of the 
safety, and in terms of the new technology, we will do that 
training.
    But I would be very happy, in fact would welcome the 
opportunity to take a look at some of the issues that perhaps 
have been raised by some of your constituents and make sure we 
are paying attention to everything they raised.
    Ms. Kilpatrick. Thank you. I will take you up on that.
    Ms. Garvey. Thank you.
    Ms. Kilpatrick. I think that is very important. When the 
workers feel they are not being adequately trained and have the 
safety of the American public in their hands, I think it is 
very important. I would like to take that up with you.

                   modernization--adequacy of funding

    Ms. Garvey. Thank you.
    Ms. Kilpatrick. You mentioned again and we talked about the 
software, and I think that was one of the IG's concerns in 
terms of upgrading--and Mr. Olver went into it quite 
extensively--and being more comparable and up to date, the 
resources, financial resources that you have for that line, are 
they adequate?
    Ms. Garvey. They are. The challenge is very often the 
unknowns. It is those things that you don't know at this point 
in time, and we may not even know the area. I mean that is what 
presents the greatest challenges as we look at some of the 
software and as you go through software, because it is so 
cutting edge. We really very often--and again, true in Defense, 
true in NASA, true in other agencies as well--it is so state-
of-the-art and so complex that often issues come up that you 
are just not anticipating.
    We can do a better job with the ones that we ought to 
anticipate, and that is a fair question. Are some of these 
questions things we should have anticipated? We need to 
constantly ask ourselves that. But for those things that come 
up in a given year that we had not anticipated, that is the 
real challenge; and as many of you as a committee have 
expressed this morning, a challenge not just for the FAA but 
government-wide.
    Ms. Kilpatrick. Government-wide for sure, because we 
believe, at least I do, that technology will continue to change 
and get better as we move into the new millennium, that there 
always be challenging and upgrading and updating and new 
technology that we should be looking at, which we will have a 
dollar figure on.
    Is your budget able to meet that demand today? As we move 
out into the 21st century, I am sure there will be others.
    Ms. Garvey. Yes. One of the keys in modernization, as Mr. 
Baker mentioned and others have mentioned before me, is that we 
have got a plan in place that is incremental. It is a building-
block approach to modernization. I think when we do it that 
way, taking off, as Mr. Baker said, in bite-sized pieces, we 
can reach modernization, which is very expensive in the long 
term. But if you break it into bite-sized chunks and move 
forward incrementally, I think that really holds the most 
promise for us.

                              inspections

    Ms. Kilpatrick. Okay. And inspections, Mr. American 
Airlines sitting next to you, does he have to fear that we 
aren't staffed enough to be inspected as we often need to be? 
Are there inspectors, enough of them, A, and properly trained, 
B?
    Ms. Garvey. I think the issue of training is something we 
need to constantly look at. We are looking at a new approach to 
some of the inspections which is system-wide as opposed to sort 
of a stovepipe approach, and Bob is familiar with that. In 
fact, his is one of the first airlines where we are trying 
this. So I think the issue of training our inspectors is 
something that is always important. But again, we have a very, 
good work force and a very dedicated, group of men and women.
    Ms. Kilpatrick. I would agree, too, that they are very 
dedicated. Mr. Baker, she just kind of led you into that, but I 
would like you to comment on that. As well as your Y2K, are you 
up to date? Are you going to meet the timetable? Have you been 
testing so far to get ready, or when will you be ready?
    Mr. Baker. First to the inspection side, I can assure you 
that the FAA is on the case. We have 22 maintenance-only 
inspectors involved at American Airlines full time. They are 
all over our two maintenance bases at Tulsa, Oklahoma and 
Alliance in Fort Worth.
    We have a continuous dialogue, both verbally and in 
correspondence, finding problems, dealing with problems. They 
are working real hard on our behalf, and the view we take at 
American quite frankly is we want the very best inspectors, the 
toughest ones to help us find the problems, because that is 
what running an airline is all about, finding the problems 
before they find you. So we are very pleased with the 
inspection level. And as we move to toward ATOS, the new 
system, we think that is clearly a more efficient way to even 
do a more better, more thorough job of inspecting a big airline 
like American.
    Y2K has been a hot button at American for about four years. 
We saw this problem because we had the largest nongovernmental 
computer system in the world, by the name of SABRE, some years 
ago. We have spent at this point about $250 million of our own 
capital to go inspect, find and repair our systems.
    As of the end of the January of this year we had already 
exercised 22 percent of our systems into the next millennium, 
because, of course, we are now selling tickets for next year, 
and so the systems for reservations and handling our customers' 
bookings had to be done before the end of 1998.
    We are about 99 percent done on a total corporate basis. We 
are now turning our attention to the external factors that can 
affect our airline, namely the 7,000 or 8,000 vendors that we 
do business with, working more and more with ATA and IATA and 
ICAO on air traffic controlling and on those types of subjects 
and airports.
    So we are very involved, very engaged, and we are very 
comfortable with our internal outlook for Y2K, and none of the 
systems we repaired have broken to date, that we have exercised 
as we get into the booking next year.
    Ms. Kilpatrick. Thank you.
    Ms. Garvey, is American Airlines above, comparable to, less 
than or more than the other major carriers?
    Ms. Garvey. Bob Baker is always in a class by himself. But 
I would say I think all the airlines, the American airlines, 
are doing very well. We are working very closely with ATA, 
which is the airline organization, in fact, we have an 
extraordinarily cooperative relationship. The CEOs at all of 
the airlines have committed major dollars to this effort. So I 
think in terms of our airlines, as the chairman said a little 
bit earlier, they are really doing extraordinarily well, very 
well.
    Ms. Kilpatrick. Thank you. Mr. Baker, thank you very much.
    Thank you, Mr. Chairman.

        standard terminal automation replacement system (stars)

    Mr. Wolf. I thank you.
    On the STARS issue, I wrote down what Mr. Mead said about 
progress and problems, and these hearings, although hopefully 
they will note progress, do go back to problems. I just want 
the record to show that Ms. Garvey moved quickly on having the 
air traffic controllers involved, and I think the record will 
stipulate you were not there then, you were at another agency--
that had that been done earlier, I don't think the overruns 
would have occurred.
    I think the analogy that Rich once used was, it was like 
trying to design the cockpit of the F-16 without bringing in 
the pilot. I think it was important, the air traffic 
controllers being involved, and to your credit, and Mr. 
Fearnsides and Mr. Mead and others were very much involved in 
it. But I think that should have been done earlier.
    You were not there, but when you did come in, you moved, 
and I think a lesson has been learned for the future. When you 
are going to design something for people who are going to 
operate it, they ought to be a part of the process. One, I 
think that is a good management tool, because they ought to 
feel that they are being listened to; and, secondly, they have 
a lot of good ideas.

                           data link program

    Mr. Mead, your office recently completed a review of FAA's 
data link program. It reports that data link technology could 
lead to confusion, stress, and additional work for both 
controllers and pilots, ``because it would fundamentally change 
the ways in which controllers and pilots communicate with each 
other.'' Would you explain?
    And your report went on to say, let me just add, that 
``this billion dollar program faces some of the same challenges 
that have led to cost increases and schedule delays in other 
modernization programs such as STARS.'' Why? Tell us about 
that.
    Mr. Mead. Right. Well, very briefly, I will just make two 
points before I respond directly to that question. First, that 
is intended to be a constructive report----
    Mr. Wolf. I think all of your reports have been. Let me 
just say I think it is very healthy. I think this is one of the 
few committees who bring the IG and the GAO up. I think your 
reports have been very, very healthy on all of these subjects, 
and I might say that Ms. Garvey has also been very open to 
them. I have never had resistance with that, so I think they 
have been constructive.
    Mr. Mead. And we think data link is very promising, and we 
thought this is an opportunity for us in the IG to comment on 
technology that wasn't full-blown, we aren't coming in 
reporting that there are all of these problems and cost 
overruns and delays and so forth. You have an opportunity to 
influence the course of events at an appropriate and timely 
point.
    That said, the human-factor issues involved in Data Link 
are profound. One reason why, just by way of illustration, is 
you take the controller, he is controlling a given piece of air 
space or she is controlling a given piece of air space, and 
there are two planes. One plane is equipped with the 
appropriate avionics to do a digital communication with the 
controller; another aircraft is not and can only deal with 
voice. Now, for the identical type of message, the controller 
will have to keep track of which aircraft he or she will 
communicate with digitally and which will be communicated with 
by voice.
    That is just one issue. There is another--and that is a 
human-factors issue, it is called ``heads down'' time. It is 
where you want both the controller and the pilot to be 
watching, looking at what is important for them to look at. 
There is a concern that the controller or the pilot will be 
looking down at a textual message rather than being looking at 
the thing they are supposed to be paying most attention to, or 
that there will be confusion.
    The pilots have some concern also about the fact that they 
are used to listening to the chatter of the air traffic control 
and interfaces with other aircraft. This is the ``party-line'' 
effect. If you are only dealing with digital communications, 
they may lose that. That is certainly not a failure, that is 
not a fatal flaw. We are just pointing it out in the report as 
an area that the FAA and the industry will have to pay close 
attention to.
    It is quite interesting, but you can see how that will 
fairly fundamentally change how the controllers conduct their 
daily affairs, and the pilots too.
    Mr. Wolf. Mr. Baker, do you have a comment?
    Mr. Baker. I certainly would agree with Mr. Mead's examples 
of concerns. That is exactly why we have to go forward as 
quickly as possible to get into a true test environment to 
discover those issues and others, but also to examine the 
trade-offs that exist, too.
    One of the great trade-off pluses of data link is that we 
are not going to rely on the human voice and its speed or lack 
of speed. We are not going to have people with incomplete read-
backs and so forth, so there is an accuracy trade-off to some 
of the issues of heads down and so forth. But I think we need 
to get into a test environment and really start to work those 
issues, to find out which ones are real and then figure out 
what to do about them.
    But if you go and ride in one of our cockpits in a highly 
congested area, in an approach to Chicago on a dark, rainy 
night, I don't think voice can sustain the future that we all 
see in the way of traffic in our busy airports. We have got to 
have a data link and other tools to communicate that are a lot 
more efficient and more accurate than voice.
    Mr. Wolf. Mr. Baker, I will not put you on the spot, and 
this really doesn't necessarily apply to you, it doesn't, but 
it applies to the industry. I know Ms. Garvey was trying to 
hire either you or other people from the industry, and I think 
that would be healthy. I am not one who believes that because 
people understand an issue they have a conflict of interest. I 
think particularly if you need a brain surgeon and you want the 
very best, you can.
    And I think the more they have the ability, and I would 
hope that you would use the flexibility that this committee 
gave to bring somebody on board, because the problem is you 
look at it as a regulator versus somebody who is on the other 
side, and I think there is a management problem at the FAA, 
lack of being risk takers.
    Somebody like Mr. Baker with gray hair, if you fired him, 
probably has enough money in his 401(k) to go out and do 
whatever he wants to do, which is very, very healthy. And I 
don't know where you are on the negotiations with Mr. Baker or 
Mrs. Baker or somebody else, but I really think it would be 
healthy to bring, particularly as we go through these systems 
that are so complicated, and yet just like we used the thing 
with regard to STARS, until we brought in, if you recall, Mr. 
Pastor, we had all the people here and the meetings we have had 
in my office that have gone on. I think some good has come out 
of that.
    And I think we are going to be faced with the same problem. 
And when you talked about data link and the congestion I viewed 
over Chicago, you really do need to bring somebody with that 
type of background whereby the users--again, we had the users 
who were the air traffic controllers, who frankly, I commend 
the fact that they were willing to question, because I am glad 
they did.
    I think the same thing holds true here, and until you get 
someone to come in with the experience of a user, because they 
have hands-on experience--I mean you as regulators at the 
agency are doing a good job, but still miss what it is. And I 
think there is a certain mind-set at the FAA that they may not 
be a risk taker, may not be willing to do that, because if they 
do they will offend somebody, and then they will be transferred 
to some other place and they are three years away from 
retirement.
    And yet I would say to your industry, you all are going to 
have to have someone come forward. One of the impressive things 
I saw--and this is not directed to you, I want to stipulate 
that, I am just talking about the industry now--with the death 
of Joe DiMaggio, it was interesting, I looked at it, and of 
course I was always a fan of Joe DiMaggio's, and the same thing 
holds true for Ted Williams, when you look at his record today, 
there is a closing sentence which notes that he could have even 
had a better record had he not taken three years off to serve 
in World War II, and Joe DiMaggio in '43, '44 and '45 could 
have argued, ``You don't understand how important I am, I am 
going to be needed here,'' but he left to go.
    And I think we may need some people in the industry to, on 
a rotating basis, to bring somebody in like Mr. Baker, or the 
Mr. Baker from Delta or the Mr. Baker from United or the Mr. 
Baker from--to kind of give you that. And I would encourage the 
industry people, who I think are credible and good, who can 
speak to the same terms of all of these other things, the same 
way that the air traffic controllers did. You saw the good that 
came out by that.
    I think you are going to have to bring in the industry so 
that you know whatever you are doing fits their needs, you 
know, and if you have to use that flexibility that we gave you, 
I think you ought to use it. And I think the time for you to be 
using it is running out, because obviously you have been there 
now for almost two years, and you only have three more to go, 
and so you want to try and bring somebody on. Four, did he say? 
Way to go. So I hope you can do that, and I hope maybe you can 
talk to the industry to see if there is some way that you can 
bring both sides together.

             terminal doppler weather radar--new york city

    Mr. Wolf. A question on terminal doppler weather radar. I 
look out and see that snow again. As you know, I have taken a 
special interest in making sure that the New York metropolitan 
area receives a terminal doppler weather radar as soon as 
possible. The delays have gone on and on in this program too 
long, depriving travelers to that city of important safety 
protection.
    Last year the FAA completed its environmental assessment, 
and I believe you issued a record decision to site the terminal 
doppler at Floyd Bennett field. Mr. Belger may want to answer 
this. Mr. Belger testified previously that once a decision was 
made, the commissioning of the radar would take less than one 
year; therefore, I am hoping you can tell us when this 
commissioning will take place, when over the next few months, 
what is your schedule, because this is very, very important.
    Everyone would just feel sick if something happened there 
and then it comes back that it was is not sited. And I know 
there has been political pressure and everything else. Can you 
give us the schedule of when it will be in?
    Ms. Garvey. Mr. Chairman, the environmental document was 
completed about a month ago and it is just about ready to be 
signed. In fact, it can be signed this week. We had several 
issues, environmental issues, that were raised last week by the 
New York delegation. Frankly, I think for some of the newer 
members, it was a new issue to them. We have prepared--and I 
actually was expecting that they were going to be briefed today 
while we were here. I am not sure that took place with the 
snowstorm, but that is going to happen, and we will be signing 
it. And I assume I will turn to Monte, but within the next 
year--the installation and commissioning then would be within 
this year. But we share the same interest about making sure 
that we get it out there.
    Mr. Wolf. So it will be in by the end of 1999?
    Ms. Garvey. 1999, that is right. I don't believe the 
installation is as complicated. Frankly, there were some last-
minute issues with the Park Service, too. There were some 
concerns that they had. We think we have answered them very 
satisfactorily, and I hope they agree with us, but we will be 
briefing the delegation this week.
    Mr. Wolf. Okay. Well, I appreciate that. If there is any 
slippage, really--when did this first come about? When was the 
first recommendation, Mr. Belger, to put that in, not the site, 
not the location, but to have one there?
    Mr. Belger. It goes back many years, sir. I am not sure of 
the exact----
    Mr. Wolf. Just for the record----
    Mr. Belger. We can certainly tell you.
    Mr. Wolf. 1994, does that sound appropriate?
    Mr. Belger. At least then.
    [The information follows:]

    The slippage in the schedule for obtaining the site began 
in July 1993.
    The life cycle cost benefit analysis for the Terminal 
Doppler Weather Radar (TDWR) Program was completed in July 
1987. This analysis determined that the JFK and LaGuardia 
airports in New York should be served by a TDWR.

                          free flight phase i

    Mr. Wolf. Yes. Ms. Garvey, is it fair to say that if we 
adequately fund the Free Flight Phase I effort, that the delay 
scenario envisioned in the American Airlines study will be 
pushed off for many years?
    Ms. Garvey. Well, we of course would have to measure the 
results and the benefits as we move forward. We think that is 
the right first step. I will tell you there will be another 
series of discussions about where do we go beyond Free Flight 
Phase I. The task force and the industry people who have been 
involved in this issue are coming together next week to ask 
ourselves how are we doing on the 40 issues that we have, how 
are we doing on Free Flight and making good progress, and where 
do we go from here. So we believe Free Flight will really go a 
long way. Again, I don't want to suggest it is the whole 
answer, but it definitely deals with many of the issues Bob 
raised. Bob, you may want to answer.
    Mr. Baker. Our analysis, which Mitre has also done some 
work on, suggests that if we get all of these technologies in, 
that it will push that curve to the right about six years 
before it starts to accelerate again. So we get at least six 
years out of that technology in holding the delay rate 
constant.
    Mr. Wolf. Mr. Fearnsides.
    Mr. Fearnsides. And getting the technologies in is only 
step one. We need to make sure that they are being used to get 
the benefits. This gets back to training and procedures and 
other non-technical issues. We think the progress is going fine 
on getting the technologies implemented. What the community is 
looking for, are the benefits, not just merely the technology.

            standard terminal automation replacement system

    Mr. Wolf. With regard to STARS and human factors right here 
at National Airport, in April 1995 FAA Administrator Hinson 
wrote a letter to me in which he said the following, ``Dr. 
Donahue has put in place an organization and processes to help 
ensure that the problems encountered in the AAS program will be 
avoided in the future.''
    ``In hindsight, it seems clear that the FAA substantially 
underestimated the complexity and magnitude of the effort. 
There were many sporadic warning indicators. These warnings 
were either ignored or not understood by FAA acquisition 
officials. In addition, they allow the operational organization 
to change the design requirements freely and frequently, 
leading to significant opportunities for cost growth and 
schedule slippage.''
    Obviously, that sounds a little bit like what happened in 
STARS, which was started before your time. What are your plans 
now for the EDC version of STARS at Reagan National Airport, 
and when will that be commissioned?
    Ms. Garvey. The EDC is under review. The good news, is that 
in the last week the controllers, with program people, really 
rolled up their sleeves and said let's look at all the options. 
Let's look at what our issues are and let's look at what the 
options are. We now have under review what we will do at 
National. Mike McNally is meeting with Monte, I know, tomorrow.
    Mr. Wolf. Do you want to tell the committee now or do you 
want----
    Ms. Garvey. You know, if I could wait until I have another 
chance to talk with Mike. We have come up with a very good--
strategy. But I think we would like to talk it through just one 
more time to make sure we have crossed all the Ts and dotted 
all the Is.
    I will say there are two goals, and this is really 
important. One is how do we deal with some of the immediate 
issues around aging displays, particularly in those areas where 
there are high levels of traffic. And there is an immediate 
issue with that right now. How do we deal with that? The second 
is, we are all fully committed to STARS and how do we move 
ahead on that? I was interested in Mr. Mead's comment a little 
bit earlier about maybe we shouldn't add all the human factor 
issues until we really understand the Eglin experience more. 
You know, is there a way to have a kind of spiral development? 
Is there a way to do it more incrementally, but still move out 
on STARS sooner? We have a good strategy that we will be 
talking about a little bit more fully with Mike. He wanted to 
go back and talk to some of his folks, and we have as well.
    Mr. Wolf. So it is on target, you want to go back one more 
time to find out when?
    Ms. Garvey. Right. And we will be back to talk about the 
actual schedule with you all.

                             oasis program

    Mr. Wolf. Okay. We hear the OASIS program is experiencing 
some of the same human factors problems that affect STARS. Is 
that accurate?
    Ms. Garvey. Yes, it is. I am very concerned about it. We 
have some human factors issues, and I don't know yet the impact 
on the schedule. But we will provide that information as soon 
as I have had a chance to really take a look at it.
    [Additional information follows:]

    It is true that OASIS is experiencing some of the same 
human factor problems that have affected STARS. As with STARS 
the FAS decided to acquire a commercial-of-the-shelf (COTS)/
non-developmental item (NDI) solution for OASIS. During the 
integration and operation testing phase of OASIS, FAA users 
documented many problem trouble reports (PTRs) which revealed 
that a COTS/NDI solution would not be operationally suitable.
    The FAA has responded to the OASIS human factors problems 
by taking several steps. First, the FA has embarked on a 
separate acquisition to replace the Automated Flight Service 
Station (AFSS) consoles. These new consoles will accommodate 
individuals with disabilities. With the new consoles, standard, 
108-key QWERTY keyboards can be provided with OASIS. Further, 
the FAA has authorized the OASIS contractor to replace their 
proposed 17-inch monitors with 21-inch monitors. These larger 
monitors will resolve many of the display concerns that have 
been raised. Finally, the FAA has negotiated with the OASIS 
contractor so that other human factor concerns will be 
addressed through their development efforts. The combination of 
these activities ensures that the OASIS will be operationally 
suitable upon deployment.

                            year 2000 impact

    Mr. Wolf. Okay. We have a number of other questions. I am 
going to ask one more about Y2K and then a couple for Mr. 
Fearnsides, and if any other members have other questions.
    I just want to run a number for the Y2K issues too. Just 
how confident are you that there will be minimal or no 
disruption to air traffic operations or other safety functions 
of the FAA when the date change occurs next year? I am 
confident and I am sure that the airlines will not allow their 
planes to fly, but how confident are you with regard to the 
disruptions? Speaking on the safety issue, I think, to get it 
out so the public can hear about it.
    Ms. Garvey. I think that is a very good point to start with 
you, Mr. Chairman. There was a lot of confusion about that, but 
I think the people now are beginning to understand safety is 
not going to be compromised. The FAA is not going to allow the 
planes to fly if safety is an issue. The airlines won't allow 
them to fly. So I think that issue has been resolved adequately 
in the public discussion.
    Making sure the disruptions are at a minimum is what we are 
focused on. We spent a good deal of time meeting with Peter de 
Jager, who is one of the gurus on Y2K and writes a good deal 
about it. He said, ``you know, you have to be honest that there 
may be some disruptions.'' I mean we don't want to be overly 
optimistic. There may be some disruptions. We have a day like 
today, we obviously have disruptions.
    Mr. Wolf. And you could at that time.
    Ms. Garvey. That is exactly right, Mr. Chairman. Our job is 
to make sure they are at a minimum, and we have all the 
contingency plans in place. So we do have, as Mr. Baker talked 
about, the contingencies they were looking at American. We are 
doing the same things with our unions: What can we do if there 
is an area where there is a problem? Making sure that we are 
taking every step we can to keep those disruptions at an 
absolute minimum is really our great challenge. Let us hope 
that the weather does cooperate that day as well.
    Mr. Wolf. Mr. Baker, do you have any comments about how you 
think the disruptions are going to be?
    Mr. Baker. I am quite confident in the domestic sector we 
are going to be fine, and we will have contingency plans, if we 
have one facility that has a problem, that that is not going to 
be that will be like a snowstorm. So I am very comfortable that 
we are going to be in good shape domestically, and our 
attention is now turned entirely to the external U.S. 
challenge.
    Mr. Wolf. How do you think that is going to go?
    Mr. Baker. I think we are going to have to go slowly and 
carefully and get a lot more confidence than I have today in 
some areas of the world.
    Mr. Wolf. Who is really responsible though?
    Mr. Baker. Each country really has got its own 
responsibility. We are in kind of a data collection mode right 
now, trying to understand whether they have done anything, if 
they have.
    Mr. Wolf. Has Russia done anything?
    Mr. Baker. Russia?
    Mr. Wolf. Yes.
    Mr. Baker. Very limited, from what we can see.
    Mr. Wolf. Knowing the degree of difficulty, Steve Horn I 
think gave you an F, not you personally.
    Ms. Garvey. I took it personally. It didn't feel good.
    Mr. Wolf. But here there has been great emphasis, plenty of 
financial resources, you set up a war room, as you describe it.
    Ms. Garvey. Yes.
    Mr. Wolf. My visions of a war room are, you know, combat. 
Maybe this is just an office with clipboards. But you have 
pushed and the DOT dropped to an F. I see that and I say, wow, 
that is amazing. And yet Russia I am fairly confident they 
haven't done that much. So what does that mean? What does that 
mean?
    Mr. Baker. Well, what it means to most U.S. carriers, we 
too use, depending on the winds, some routes over Russia to get 
from North America to the Orient. We will simply, until we are 
absolutely comfortable, we will flight plan ourselves on tracks 
that are further to the east, which will be suboptimal from a 
fuel point of view and maybe cause some longer flight times. 
But we can avoid Russian air space in early January of next 
year if we are not absolutely comfortable. So we are going to 
kind of take the view that unless we are comfortable, we are 
going to find a way in and around the problem and check them 
off country by country----
    Mr. Wolf [continuing]. What about----
    Mr. Baker. And airport by airport.
    Mr. Wolf. What about Delta? Delta flies to Moscow, so they 
can't ignore the airspace.
    Mr. Baker. They have a different problem.
    Mr. Mead. The United States truly needs to move to 
resolution in the next several months, very soon, on what it is 
going to do when it lacks confidence in the representations of 
a foreign state about its Y2K compliance or simply the lack of 
information about its Y2K compliance.
    I don't think the public would be pleased with ``fly at 
your own risk,'' or it will depend on who the carrier is. A 
policy truly needs to be developed there, and these foreign 
countries need to be put on notice as to what that policy will 
be. At the present time that the issue is under discussion, but 
it hasn't been resolved, to the best of my knowledge.
    Ms. Garvey. Mr. Chairman, one interesting note, we do know 
is that, we did some analysis and found out the six top 
countries, over 60 percent of our Americans travel to. We do 
have a very aggressive working relationship with them. We are 
establishing work plans together. So at least in the countries 
where we know most of our citizens travel, we are working very 
aggressively and closely with them.
    But I think Mr. Mead is right, the summer months are going 
to be critical for us, working with the airlines to lay out 
some plans. Are there places that we really want to say we do 
not want to send American citizens?
    Mr. Wolf. Do you plan on sending teams out to visit these 
countries?
    Ms. Garvey. We have done a little of that with IATA. We are 
mostly supporting IATA and ICAO, those are the international 
organizations, that appropriately are the ones other countries 
look to. So we are working very closely with them.
    I am going to be in Montreal on Friday, just for the day, 
mostly on GPS, but I know the issue of Y2K will come up. The 
Secretary is traveling to Europe, I believe in a couple of 
weeks, and that is on his agenda. It has been on Mort Downey's 
agenda on every international trip, and he understands the 
issue probably as well as any of us. He has really focused on 
it with our international colleagues.
    Mr. Baker. Mr. Chairman, let me give you a little comfort 
in a slightly different direction. We look at Y2K in the 
context of the system that we are all used to in this country, 
by the world's standards pretty sophisticated. Many of the 
countries, particularly in the Caribbean and South America and 
Asia, don't have the radar coverage and sophisticated systems 
that are inherently Y2K exposures.
    So a lot of the flying we do in the Caribbean is all visual 
anyway, and so we don't have the exposure of Y2K per se. But I 
think the approach we need to take as a bunch of U.S. airlines, 
is to take each country and evaluate the total safety of going 
in there and whether Y2K is a factor or not, and then go look 
at it.
    Mr. Olver. Can I look for a clarification here?
    Mr. Wolf. Mr. Olver, yes.
    Mr. Olver. Ms. Garvey, what percentage of our travel, 
international travel, is between those six countries?
    Ms. Garvey. I believe it is about 60.
    Mr. Olver. Sixty percent with those six?
    Ms. Garvey. With the top six; is that right?
    Mr. Olver. Thank you.
    Mr. Wolf. We are going to end in a few minutes because I 
don't want to keep you.
    Mr. Fearnsides, we have a lot of questions for you, but let 
me just ask you a couple of them. You have been involved in the 
subject for a long time and we respect your experience.

                         acquisition management

    The more you sit, do you see across-the-board improvement 
in the way FAA is managing its development and acquisition 
programs?
    Mr. Fearnsides. Yes, Mr. Chairman. As I mentioned in my 
statement which I have given for the record, I think that there 
are two major shifts that are important. One is an ability to 
articulate the actual risks, rather than trying to cover them 
up traditionally, in the hope that the money will keep coming 
in, agencies cover up the risks.
    And I think that the administrator's task force, which took 
the approach of really saying these are the risks we have to 
deal with, and we are going to be candid and open about them. 
And, we are going to manage our programs in a way to deal with 
those risks before we make big investments. This is a terrific 
sign.
    I think as I have listened to the administrator's last two 
speeches, the acceptance of the notion of evolutionary 
development is also a very, very positive sign. For example, 
STARS probably should have been an evolutionary system rather 
than a COTS system.
    I think that given the acquisition reform that this 
committee has with its sister committee in the Senate, given 
the FAA, has opened the door to managing in a more evolutionary 
fashion. Now the job is to do the training to allow those 
people who have been managing acquisitions in the old way all 
these years to move forward and to learn how to manage these in 
so-called spiral development.
    Mr. Olver. What is COTS?
    Mr. Fearnsides. Commercial off the shelf, Mr. Olver.

                       aviation weather research

    Mr. Wolf. Maybe, Mr. Baker, you can answer this, both you 
and Mr. Fearnsides, is the agency giving enough of a priority 
to aviation weather research and development?
    Mr. Fearnsides. That is a bit of a challenging question in 
the sense of all the other weather research that does go on. I 
would say that the--especially as we are moving into Flight 
2000, now called safe Flight 21--the notion of bringing more 
weather to the cockpit is the relevant aviation issue. I think 
if the committee funds that R&D, it could be a very useful and 
productive program. Once again, we should take the risks out of 
the program before making the big investments.
    Mr. Wolf. Mr. Baker.
    Mr. Baker. I think that weather is an important potential 
for more investment, frankly, not only from a safety point of 
view but from an efficiency of the system point of view. If we 
can better forecast exactly what is going to happen and when, 
we can clearly do a better job of using our assets and doing a 
better job for our customers. It is the unpredictable weather 
that gets us in the most trouble with our customers.
    I think there is good news, though, and that is, weather 
has become quite a commercial venture and there are lots of 
products coming out of commercial adaptation of government 
data. We are confronted all the time with people bringing new 
products forward for us to try in our own operations center and 
we ourselves are investing in some weather products with the 
University of Oklahoma.
    So there is a lot of work going on, a lot of potential, 
both from an efficiency and from a safety point of view. So I 
would certainly want to see as much weather investment as we 
possibly can afford. It is got great potential.
    Mr. Fearnsides. I would like to support that, with the 
caveat that there is a great deal of integration, as Mr. Baker 
says, of weather that really needs to happen. From an 
operational standpoint, what I think we need in addition to 
maybe better near-term forecasts is the issue of having the FAA 
and the users of the system have the same weather data to work 
from. This is also where I think collaborative decisionmaking 
will help a great deal, because we can find ways to get 
together and decide what to do operationally about a particular 
weather situation.

                         human factors research

    Mr. Wolf. What about human factors, too? Should there be 
more money be spent there?
    Mr. Baker. Yes, but I am not in a position to define how it 
ought to be spent. We clearly have identified lots of human 
factor questions and issues, both in the cockpit and in the 
systems that the air traffic folks use. I can't define for you 
as I sit here today here exactly where I would spend the next 
several hundred million dollars, but it is clearly an area of 
importance where we have got to understand and lay a plan down 
and go after it.
    Mr. Fearnsides. I think the important thing about human 
factors research is that it ought to be embedded in the ongoing 
programs. I think one of the problems that we have had in some 
years is that a sequestered human factors research program has 
a tendency to move into academic areas and work on things that 
maybe aren't as relevant to solving the real world problems as 
we need.
    Human factors, as we have heard all through this hearing, 
is a crucial issue. But, I think the human factors specialist 
would tell you that the best way to get those things solved is 
to have the human factors engineers and scientists, involved 
from the beginning in evolutinary or spiral development. They 
should be involved in the early research specific applications, 
so that we can come to terms with the human factors issues up 
front.

                              hub airports

    Mr. Wolf. A recent analysis of the airline industry by the 
investment firm Salomon Smith Barney concluded that the U.S. 
market is overhubbed and would be more efficient with fewer but 
larger hubs. They believe this may be the next step in airline 
industry consolidation. Wouldn't such consolidation, fewer 
hubs, most likely result in less airway congestion for the FAA 
to address, or at least focus the congestion problems into 
fewer problem areas?
    Mr. Fearnsides. That is a complicated question, but let me 
say that because of the dynamics of the system--I would like to 
reinforce a lot of the things that Mr. Baker said about the 
impending congestion. It seems that if you consolidated hubs 
further, that in those particular areas you just exacerbate the 
problem. I would like to check out that from an analytic 
standpoint.
    But there are some other really amazing things happening 
that we have to keep an eye on, including the introduction of 
regional jets which are taking off much faster than we thought, 
and the implications of regional jets on the network are a very 
interesting question. I think we have undertaken some research 
in that area, and it is already proving very, very interesting, 
and I think we need to keep an eye on it.
    Mr. Wolf. Interesting meaning what in this case?
    Mr. Fearnsides. Interesting in the sense, for example, that 
in the en route areas that Mr. Baker talked about, it turns out 
that some of the biggest increases in traffic, because of the 
regional jets, are likely to occur in those very areas that we 
selected some of the Free Flight Phase I projects to fix. We 
thought we were working a problem well ahead of its time. We 
may need to move a little faster to deal with this problem, if 
the regional jets take off the way we think they might.
    Mr. Wolf. Do you want to comment?
    Mr. Baker. Back to the hub question, I think the only way 
that you achieve less congestion is if you are also ready to 
accept less service, and I don't think we are. In reality, hubs 
compete with each other for flows of traffic out of small- and 
medium-sized cities across the hubs and on to bigger markets. 
So by reducing the number of hubs, unless you are willing to 
say you don't want as much service, I don't think you are going 
to get that result. We will just find a different way to do it.
    Mr. Wolf. Good.
    Mr. Mead. I would just like to say in addition to that, the 
hub part, and to the FAA part of your question there is also 
for consideration the impact on competition. I mean there are a 
number of problems right now in our system with competition. 
Fewer hubs may very well mean less competition.
    Mr. Wolf. Mr. Olver, do you have any questions before we 
adjourn?
    Mr. Olver. Clearly more Chicagos, that is a rather 
frightening prospect. I would think of having Chicagos and 
Atlantas all over the place. No, I have no other questions.
    Mr. Wolf. Thank you very much. We appreciate very much your 
taking the time.
    Ms. Garvey. Thank you.
                                         Wednesday, March 10, 1999.

                      AVIATION SAFETY AND SECURITY

                               WITNESSES

JANE F. GARVEY, ADMINISTRATOR, FEDERAL AVIATION ADMINISTRATION, U.S. 
    DEPARTMENT OF TRANSPORTATION
CATHAL L. FLYNN, ASSOCIATE ADMINISTRATOR FOR CIVIL AVIATION SECURITY, 
    FEDERAL AVIATION ADMINISTRATION, U.S. DEPARTMENT OF TRANSPORTATION
ALEXIS M. STEFANI, DEPUTY ASSISTANT INSPECTOR GENERAL FOR AVIATION, 
    U.S. DEPARTMENT OF TRANSPORTATION
JIM HALL, CHAIRMAN, NATIONAL TRANSPORTATION SAFETY BOARD

                            Opening Remarks

    Mr. Wolf. Good morning. Others are voting, but we will 
begin.
    I want to welcome you to the subcommittee. Today we will 
receive testimony on airport security and aviation safety 
activities of the FAA.
    Pursuant to a roll call vote held during yesterday's 
hearing, the subcommittee will begin the hearing in closed 
session to receive national security information from the FAA 
and the IG on the status of airport security at some of our 
largest international airports. When this portion of the 
hearing is complete, we will open the hearing up to the general 
public and continue with additional security questions as well 
as aviation safety.
    I would ask each witness to hold the delivery of 
unclassified statements until the hearing is open to the public 
so that the public can have the full benefit of your statement. 
Having said that, I would also urge you to be careful what you 
do say, and I know that you will, obviously, but if you say 
something in the open session that might not be completely what 
you mean and you create panic or something or plant the idea or 
something like that--so I think if you are asked any questions 
during the open session that you feel uncomfortable with, you 
should offer to the member to speak to him or her privately.
    Mr. Sabo, do you have any comment?
    Mr. Sabo. No.
    Mr. Wolf. Ms. Garvey, why don't you begin?

                          faa opening remarks

    Ms. Garvey. My responsibility this morning is to introduce 
Mr. Irish Flynn and Ms. Alexis Stefani from the IG's office, 
and they will give more detail on some of the issues that we 
have been dealing with over the last year or so.

                     aviation security presentation

    Mr. Flynn. Thank you, Mr. Chairman.
    The FAA security work force conducts thousands of 
inspections during the year of individual airports, courier 
stations, cargo consolidators and all others who are involved 
in the security program. The FAA also does nationwide in-depth 
assessments of specific parts of the security program. We do 
these in order to learn how important parts of the program are 
working, to identify vulnerabilities in the program, and then 
to work with the regulated parties concerned to fix those 
vulnerabilities to improve the program. The Office of the 
Inspector General participates in these assessments with us. 
The Office of Inspector General supplements our testing by 
doing testing on their own and providing the information to us 
and the airports and air carriers concerned.
    Today I would like to brief you and the committee on some 
of those assessments that we have conducted recently on the 
international bag match program, on checked bag security in the 
United States, on control of access to the secure areas of 
airports in the United States, and on the security of small 
packages that are shipped as cargo on passenger aircraft.
    This information that I will be covering outlines important 
parts of the program which, if known by people who wanted to 
attack would be helpful to them, and also identifies 
vulnerabilities which are similarly helpful. Therefore, we very 
much appreciate, Mr. Chairman and the committee, that you have 
this hearing closed.
    We, FAA and OIG have provided information and papers for 
the committee. We would remind you that those papers need to be 
controlled. We will gladly take them from you at the end of the 
hearing if that is what you would prefer and make them 
available to you.
    Mr. Wolf. Maybe that will be the best thing. At the end we 
will just give them back, and if somebody wants them, you can 
bring them by their office.
    Mr. Flynn. We will do that.

                   international passenger bag match

    The international passenger bag match, bag match is a 
straightforward measure. What it means is that a bag aboard an 
aircraft must be accompanied by a passenger. If a passenger 
checks a bag and does not board, the bag must be removed. The 
aircraft must not leave the gate with an unaccompanied bag 
aboard.
    The way that we test that is to have our agents and IG 
agents pose as passengers. They buy tickets, check bags and 
then they don't show. The requirement on international flights 
is 100 percent. Bag must be removed if passenger do not show.
    We did two rounds of this in July to September and November 
to December. The first round with 258 tests. The performance 
is, as shown, for the U.S. flight carriers and the foreign 
flight carriers, a total of 258 tests.
    This is a sample of the performance of carriers. There are 
many other carriers involved. Many of them had a small number 
of tests, and many of them were in the 100 percent 
performance------.
    So we had a second round of testing. Of concern in those 
areas were ------. There was a ------.
    The next slide. So in the second round, we conducted a 
total of 95 tests on the performance for the carriers that had 
been ------ on the first round, and the performance improved. 
You can see that in better detail on the next slide.
    You see ------ but all the carriers that were required to 
do the second round, were also required to do remediation 
action plans. ------ did not finish their plan and retrain all 
their people until midway through the second round. After that 
point, there were seven tests, and ------.
    So that ------ includes the part where they didn't have 
their act together.
    Now, any failure in this area requires enforcement action. 
The ------ as do the flights ------.
    Next slide. This is the change from the first to the second 
round for the U.S. carriers, ------.
    The ------ did not improve. In comparison with the foreign 
carriers, they all improved significantly, ------.
    Next slide. We also tested bag match on flights from Canada 
and Mexico to the United States. The Canadian testing was in 
cooperation with the Canadians. We tested their carriers.
    In Mexico we did not test the Mexican carriers but only the 
U.S. carriers flying there ------.
    Next. The emphasis is on the ------. We are taking a strong 
enforcement posture because this is not a new requirement. It 
has been in existence for over a decade, and it is not a high 
technology item. It does not require a lot of advanced 
technology, although the carriers that are most automated in 
their baggage and passenger following procedures do the best. 
That is part of the story with------. They are bringing on new 
automation systems, and one would expect to see an improvement. 
This is of concern in bag match area. We will continue to test.

                    domestic check baggage security

    The next topic area is domestic check baggage security. We 
did the nationwide assessment in October/November.
    The elements of the program are, first, that we screened 
passengers. In the United States we have a homogeneous group of 
passengers. They are overwhelmingly United States citizens. It 
is relatively easy, on a computerized basis to be able to 
determine, ------ and to identify passengers that might be of 
concern. Overwhelmingly, they are innocent, but we just do not 
know sufficient things about them to be able to determine that 
they are not of concern.
    Those passengers' bags must either be bag matched in the 
flights within the United States or their bags must be screened 
by explosive detection systems. We conducted these tests at --
----.

                 computer-assisted passenger screening

    The computer-assisted passenger screening system works 
well. However, of concern to us was that there were ------.

                           domestic bag match

    The next slide is domestic bag match. Twenty of the 
passengers' bags were to be bag matched, and there were ------ 
in that. In ------
    That is a concern. ------ and recall that for international 
bag match, where it is a 100 percent measure, we feel ------ is 
where it should be. If it is below ------ it becomes a matter 
of fairly acute concern to us.
    However, bag match in the domestic system phases out as 
explosive detection devices come in to screen the bags at their 
origin.

                  explosive detection system screening

    Next slide. The remaining passengers' bags went to 
screening by explosive detection systems. Now, explosive 
detection systems automatically identify the possible presence 
of explosives. They also have a ------. So an operator has to 
examine data presented by the explosive detection system on the 
screens. It is a ------. They need to take additional slices in 
order to determine whether the bag actually doesn't have a bomb 
in it. Every one of these bags had in it a simulated bomb using 
material that have high fidelity when examined under a CT to 
real explosives.
    So we know that the procedures for doing it can work 
because at ------ the results were 100 percent. There were five 
bags presented, and with all five bags the operator followed 
the correct procedures. The operator ultimately called for the 
bag to be opened and found the bomb. It could have been 
disguised, for example, ------ the operator then reexamined it 
and was at the point of calling the police and explosive 
ordnance disposal when the agent showed his or her ID and 
explained that it was a test.
    That is the way that it should be done. ------
    What is happening here is that we clearly need to follow 
the initial 2 weeks training that the operator's get with a 
much greater emphasis on coaching of the screeners.
    We have an action plan to improve the operator's 
performance. We are going to repeat the testing ------ We are 
looking at ------ to see what the factors are there that make 
it a success and ------
    An important one there is that the operators are very 
deliberate. They take a lot of CT slices. They are not 
stressed. There is a lot of self-stress that develops in this 
screening; and, consequently, there needs to be a lot of 
coaching of the operators.
    We also want to make it clear to the air carriers by 
clarifying our program documents that they are to use EDS where 
it is available and not send bags for bag match. Alexis will 
have more to say about that in her presentation.
    The alarm resolution procedures are written in a way that I 
can understand them and the people at ------ understood them, 
but we need to make them clearer and make the English more 
readily understood. It is a complex process, and we need to 
make it more readily understood by these screeners.
    We need to use ------ more. We are ------
    So there is a lot to be done here.

                   control of access to secure areas

    Next. The Inspector General has recently done testing, and 
it continues, of control of access to secure areas of airports, 
getting to the ramp and getting to the aircraft. The results at 
the four airports for which I have data ------
    Next, what is happening is that we have controlled access 
doors that require access media in order to open those doors. 
Those are individually issued to cleared personnel ------ and 
------. Now, day to day you very rarely find anybody on a ramp 
who doesn't belong there, but what actually happens ------ They 
get into habits and when the IG agents unID'd follow them 
through, it indicates the vulnerability of that system.
    They also were able to get onto the ramp through cargo 
areas and through the bag claim areas. The doors that are there 
are too often left unlocked. Out on the ramp, walking without 
ID, the IG agents too frequently were not challenged as they 
ought to be.
    However, that is not a 100 percent expectation, because the 
ramp is a dangerous place, and the people who are out there 
need to be aware of safety and of the very important jobs that 
they are doing, refueling and the like, but there are clearly 
others who were not engaged in work who ought to have 
challenged the IG agents.
    Most worrisome of all, ------
    The good news is that, compared to previous testing, they 
found the vehicle access gates well guarded.
    Next slide, the small package--by the way, we are taking 
extensive action on that. I have written to all of the air 
carriers and to all of the airports, not just the airports that 
were involved in the test because of concern that these 
problems might be systemic.

                   small package security procedures

    Small package are offered by individuals to carriers at 
airports to be carried on passenger aircraft. There are 
procedures that the air carriers are required to follow with 
regard to identifying the person who is offering that package 
and to screening, searching or x-raying the package before it 
is accepted. So we tested in 1997 and again in 1998 the small 
package security procedures.
    Here is the comparison of the results. This is round one 
where ------ We went into an action plan with the air carriers 
and there was hardly a significant change with ------ There is 
a uniform improvement with the exception of those ------ And in 
round two compliance came up to ------ ------ We want to 
continue this form of emphasis and testing in order to bring 
everybody's scores up to a high level.

                            Closing Remarks

    That concludes the presentation, Mr. Chairman. We are using 
these as illustrations of the fact that this is a complex 
business. Security requires a lot of attention from actually 
tens of thousands of people who are involved. When we collect 
these data and present them to the air carriers and the 
airports, they generally respond very well. The real challenge 
to us all is not just to fix things temporarily but to sustain 
high levels of security performance over the long run, because 
there is a threat of terrorism, thankfully low, but it is 
present here in the United States.
    Thank you, sir.
    [The information follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Mr. Wolf. Do you have a statement, Ms. Stefani?
    Ms. Stefani. Yes. Mr. Chairman and members of the 
subcommittee, thank you for this opportunity to talk about some 
of the specifics of what we have been doing in aviation 
security.
    I would like to quickly go through three areas, and I will 
try not to duplicate what Admiral Flynn talked about.
    [Additional information follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                            EDS UTILIZATION

    The first area I would like to talk about is the explosive 
detection systems, the equipment.
    Last year, we had reported that the usage of the equipment 
was low, that 10 out of 11 units operating at that time were 
screening less than 200 bags per day when you had a machine 
that was actually certified to do 225 has per hour. When we 
looked at the data for 1998, the top row is the good news. 
Since the first quarter, we have gone from 8 airports with 12 
machines in operation to the end of the fourth quarter where 
there were 14 airports with 35 machines. As of the end of this 
February, we are up to 51 machines operating at 20 different 
airports.
    You can see that the average weekly bags per machine has 
increased from the first quarter to the last quarter--from 1230 
to 1559. We have been using 225 bags per hour as our benchmark. 
As you can see, with the 10 machines in the first quarter, 
approximately 83 percent of the machines were doing less than 
225 bags per day. By the fourth quarter that has been reduced 
to 69 percent, or 24 machines out of 35.
    The two bottom rows deal with the range, the high and the 
low average rate per day. I have a handout that you have that 
shows more detail. It gives a better perspective on the 
numbers. As you can see, the white bars--there are 11 of them--
represent the machines that are doing less than a hundred bags 
a day. If you look at the blue ones, ------ they represent a 
large quantity of bags--and our hope is that over time with 
lessons learned we will have a shift more in that direction. 
These machines do offer good detection, and they can be more 
aggressively used than they are right now.
    The next area I would like to discuss deals with checked 
bags. Before I talk about checked bags or access control, let 
me just say that when we were at the airports where we found 
problems, we talked with the airlines or the airport officials 
or FAA. Everybody was very responsible in how they took the 
information and what they did, but I must say some of the 
results ------
    [Additional information follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                   checked baggage compliance testing

    This chart represents our work on checked bags. If you look 
at the first two columns--the dark blue ones--the taller the 
bar, the better the compliance. So, 28 out of 28 times the 
automated profiling equipment system worked and said our 
employee was a selectee. However, once that occurred, we went 
then to see what the air carrier employee would do. In only --
---- of the cases did the employee appropriately take the 
person and the bag to the CTX machine for screening. What we 
saw was that, in seven of the cases, the employees did not 
follow the required security procedures.
    As Admiral Flynn said, in one case ------
    The ------ above that bar shows where FAA told us they 
expect the ------ to be.
    The next two bars, the red ones, deal with once the bag was 
placed on the machine, what happened to it. The first column 
shows ------ In that case, we had ------
    FAA standard. As Admiral Flynn said, the bags contained a 
simulant, so it should have alarmed, and the operator should 
have taken the necessary steps to identify the threat.
    However, only ---- of the time was it done correctly. What 
we saw basically, is a ------ the operators not understanding 
what to do. Even when we went back and talked to them, we asked 
them about how they should have done their threat resolution, 
and they did ------
    FAA is very much aware of the need to do additional work in 
this area. As Admiral Flynn mentioned, one of the things that 
we see as important is ``threat image projection.'' It is a 
training tool where the operator would use the machine, and it 
would superimpose on the bag a threat. With this testing, the 
operators should be able to use the machine and keep 
proficiency up.
    The last bar is our ------. This, in fact, uses FAA's 
results, the 353 tests that they conducted on outbound 
international flights. That is just a summary of the 
information that Admiral Flynn provided you.
    [Additional information follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                             access control

    Access control is our final area; and, again, the problem 
is the human element. It is having the airlines and the tenants 
in the airport implement access-control procedures. We have 
gone to five airports, and the results are ------. We have 
successfully gotten into the secure areas at these airports --
---- of the time.
    Our employees were casually dressed, they weren't wearing 
uniforms and people would walk on by them. We were not wearing 
IDs, and what we did was basically a number of tests. As you 
see in the first columns ------
    In other words, they--and, in some cases, ------ We just 
got information from our tests in ------, and some of the same 
kinds of things are happening.
    In the terminal area, ------, and ------
    Another thing that we did which was separate from these 
attempts is, once we were in the secured area, we wanted to see 
how many times we were challenged. And I am not just saying 
that we saw a group 50 feet away and we counted those people. 
We were close enough that they should have been able to see 
that we had no ID. And, in that case, ------
    [Additional information follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                           aircraft boarding

    Finally, once we got into the secured area, we tried to get 
on airplanes.------
    Those people only challenged us.------
    The last column deals ------. Primarily our concern there 
was from the idea of hijacking ------
    Every case that seems to be of concern involves the human 
element. We know that determining why it is not working and 
what exactly can be done requires more work, and we will be 
continuing this process for weeks. We will be working with FAA 
and, as I said before, we have met with FAA and the industry--
both the air transport and the airport operators--to discuss 
our findings to see what we can do to help resolve this and 
make security stronger.
    That concludes my statement.
    Mr. Wolf. Well, thank you very much.

                       access control violations

    Mr. Wolf. It sounds like there is a long way to go. Is 
there any merit to aggressive fines, if that is the case?
    I went out on Friday and spent a couple of hours at Dulles 
Airport walking around with the people out there, and we looked 
at a machine, and they stressed what they were doing and all, 
but I can see how what you are saying happened.
    Do you fine them or is there some sort of levy of some 
penalty?
    Mr. Flynn. Our enforcement program, where there is a well-
established program that doesn't involve new technology, we 
have a 100 percent enforcement, for example, on international 
bag match. That is a long-standing requirement.
    Mr. Wolf. Have there been fines against any of the 
airlines?
    Mr. Flynn. There have been for access control.
    Mr. Wolf. How many?
    Mr. Flynn. I can get you those figures.
    [The information follows:]

    In fiscal 1997 and fiscal year 1998, there were ------ 
against airlines for access control violations. The FAA 
collected in civil penalties for these cases.
    Mr. Wolf. I drive 55 miles per hour if I am confident that 
I am going to get a ticket. If there is nobody watching on the 
road at all, maybe somebody will go 70 miles an hour.
    I am not interested in fining airlines, but this is a 
relatively serious issue. And we have had Pan Am, and we don't 
know what--TWA, we assume that there was a malfunction, but 
there have been hijackers. I just wondered if you looked at 
aggressively fining people?
    Mr. Flynn. We have, and I think that possibly a better way 
of doing it is that when people are able to board aircraft, we 
require the air carriers and the airports to adopt an action 
plan. Then we will try to replicate those tests at all 
airports. Where we get aboard the aircraft, we clearly have 
vulnerable aircraft. Therefore, they need to be guarded. We 
should fine people, but we should also require them to pay for 
the additional measures to ensure that the vulnerability is 
removed. I think there are two tracks to it.

                          pre-board screening

    Mr. Wolf. I agree. But the poor employee at Dulles with a 
747 loading up, 6:30 at night, kids crying, the airlines have 
cut back on some of these employees, and they are working--you 
sense that the employee is working as hard as he or she 
possibly can. They cannot say that they are going to guard this 
thing. They work there. That is what they do.
    I think you have to meet with the top of the airline, which 
you have probably done. I think that is probably the only way 
to really get their attention.
    Also, the numbers that the IG showed even on the bag, on 
the CT scanner, had dropped. It had increased from the first 
quarter to the last quarter but had dropped from the third 
quarter to the fourth quarter.
    And I don't want to take more time. I will just ask one 
other question. Does Europe do a better job or worse job?
    Mr. Flynn. We only have a limited amount of comparative 
testing, but we did do comparative testing with one country on 
preboard screening, screening of passengers and their carry-on. 
We compared that airport overseas with several airports in the 
United States.
    Mr. Wolf. And were they better or worse?
    Mr. Flynn. ------
    Mr. Wolf. In Europe they put the bag out and you have to 
grab the bag and point it out. There seems to be more 
sensitivity at some of the airports.
    Mr. Flynn. On transatlantic flights, U.S. carriers and the 
foreign flag carriers are practically 100 percent bag match. I 
am talking about preboard screening.
    Mr. Wolf. Lastly, how do you do that? If somebody goes out 
to Dulles terminal and checks his bag and who knows what is in 
it, goes through security and the bag is being checked, they 
are going down the ramp, 5 minutes before boarding they just 
don't board. They just come back out. That is the way that you 
are checking, that piece of equipment that they are putting it 
through will automatically read that X got on this plane?
    Mr. Flynn. They have to ------ I have seen them. They go in 
and pull out the bag.
    Mr. Wolf. So as they get the boarding pass----
    Mr. Flynn. That boarding pass says the passenger has gone 
down the jetway onto the aircraft.
    Mr. Wolf. What if that person leaves?
    Mr. Flynn. They have to ------ and are required to deal 
with the passenger coming off.
    Mr. Wolf. Mr. Sabo.

                            carry-on baggage

    Mr. Sabo. Let me just run through this so I can understand 
the different components. ------
    Mr. Flynn. ------
    Mr. Sabo. ------
    Mr. Flynn. ------
    Mr. Sabo. ------
    Mr. Flynn. ------
    Mr. Sabo. ------
    Mr. Flynn. ------
    Mr. Sabo. ------
    Mr. Flynn. ------
    Mr. Sabo. ------
    Mr. Flynn. ------
    Mr. Sabo. ------
    Mr. Flynn. ------
    Mr. Sabo. ------
    Mr. Flynn. ------
    Mr. Wolf. ------
    Mr. Flynn. ------
    Mr. Sabo. ------
    Mr. Flynn. ------
    Mr. Sabo. ------
    Mr. Flynn. ------
    Mr. Sabo. ------
    Mr. Flynn. ------
    Mr. Sabo. ------
    Mr. Flynn. ------
    Mr. Sabo. ------
    Mr. Flynn. ------
    Mr. Sabo. ------
    Mr. Flynn. ------
    Mr. Sabo. ------
    Mr. Flynn. ------
    Mr. Sabo. ------
    Mr. Flynn. ------
    Mr. Sabo. ------
    Mr. Flynn. ------
    Mr. Sabo. ------
    Okay, thank you.
    Mr. Wolf. Aderholt.
    Mr. Aderholt. I don't have any questions. I may have some 
questions that I would like to submit.
    Mr. Wolf. Mr. Olver.
    Mr. Olver. Ms. Kilpatrick was here before I was.

                              piggybacking

    Ms. Kilpatrick. Thank you, Mr. Chairman, and Mr. Olver.
    Admiral Flynn, welcome, it is a pleasure to meet you.
    The ------ the number is kind of high, ------. Whose 
responsility is it and what needs to happen, either the 
airplanes or the airport, whose responsibility is it to see 
that the security measures are followed?
    Mr. Flynn. In most parts of most airports, that is an 
airport responsibility. If there is what is called an exclusive 
area that belongs and is operated exclusively by an air 
carrier, then the regulatory responsibility is the air 
carriers. Generally speaking, predominantly it is an airport 
responsibility. When that happens, the violation, penalty is 
assessed against the airport.
    Ms. Kilpatrick. And I have an international airport in my 
district. What is the penalty and how often are they assessed 
and what is the procedure for that? The ------ may come out of 
my international airport. How is it handled?
    Mr. Flynn. We do an investigation of the circumstances, and 
if we find that there is culpability, then we give a 
notification of proposed civil penalty to the airport. The 
airport either pays or insists that you process the proceeding 
before an administrative judge, and either the government 
collects or the judge finds that there is not sufficient 
reason.
    Ms. Kilpatrick. I would like a report from the airport in 
my district to see if it is in violation. Is that available to 
me?
    Mr. Flynn. Yes, we can get that information to you--about 
Detroit?
    Ms. Kilpatrick. Yes.
    Mr. Flynn. We can do that ------
    [The information follows:]

    Detroit Metropolitan Airport is not among the eight 
locations being audited by The Office of Inspector General. 
However, data from FAA records indicates that, for the period 
1993-November 1998, a total of ------ were initiated at Detroit 
for violations involving access control of facilities or the 
failure to challenge unauthorized persons. The airport was 
cited in ------ cases. Airlines were cited ------.

    Ms. Kilpatrick. I can understand ------. Was there a reason 
------ is probably the most traveled. Is there a reason why 
those were picked over some others?
    Ms. Stefani. No, we were just trying to get different 
locations and different regions in FAA.

                               bag match

    Ms. Kilpatrick. We had a trip discussion a couple of weeks 
ago on crossing the border, and I am assured that the ------
    Ms. Kilpatrick. You mentioned that one was ------ ------ in 
the prescreening. Who was that?
    Mr. Flynn. It was the foreign airport.
    Ms. Kilpatrick. ------ than ours?
    Mr. Flynn. That is correct.
    Ms. Kilpatrick. Why is that?
    Mr. Flynn. Well, we need to improve preboard screening. 
There is room for improvement.
    Ms. Kilpatrick. The ------ that you mentioned, someone's 
bag has gone through and they have located something but they 
opened it up and couldn't find what they thought was there and 
it is there. How does that happen and what do you do in that 
situation?
    Mr. Flynn. Well, when we do a test, it is a failure if they 
haven't resolved it. In observation of things like that, what 
can happen is that there is a disconnect between the X-ray 
operator and the person who is searching. That is something 
that we really need to work on so that when the bag searcher is 
searching, the searcher goes to the particular thing that was 
of concern on the X-ray image. It is a training procedure.
    Ms. Kilpatrick. Have you found any real bombs?
    Mr. Flynn. Thankfully, there has not been a bombing. We 
haven't had anybody hurt from an act of terrorism on any of the 
aircraft that we regulate since Pan Am 103.
    Ms. Kilpatrick. Thank you, Mr. Chairman.
    Mr. Wolf. Mr. Olver.

                       explosive detection system

    Mr. Olver. I am sorry I was not in earlier and missed a 
portion of the testimony.
    What EDS ------ that stands for Explosive Detection System?
    Mr. Wolf. Would the gentleman yield?
    Mr. Flynn. Sure.
    Mr. Wolf. I know it is time-consuming, but there are other 
members here who are all on subcommittees. Mr. Regula has a 
subcommittee, Mr. Rogers has a subcommittee, and Mr. Callahan 
has a subcommittee. If I could ask you if you can contact--we 
can give you a list of members who were not here and if you 
could pick a block of time next week and spend 10 or 15 minutes 
with them. If you can do that, I would appreciate that, and 
also the members who are not here.
    Mr. Olver. The vote was on, but I am the ranking member of 
another subcommittee.
    While I am settling some other things, maybe the folk for 
the IG's office can find the chart with the four quarters and 
the number of airports and number of machines that were there, 
that one caught my--my mind focused on that.
    EDS is Explosive Detection System?
    Mr. Flynn. Yes, for screening checked baggage.
    Mr. Olver. Is the EDS system, is that also the InVision 
Technologies machine? Is it the same machines, general speed 
scanning and so on?
    Mr. Flynn. InVision CTX 5000 is an Explosive Detection 
System.
    Mr. Olver. Is that being used in the automatic alarms 
resolution tests?
    Mr. Flynn. That is correct.
    Mr. Olver. That is with the InVision machinery?
    Mr. Flynn. That is correct.
    Mr. Olver. Are we deploying any machinery other than the 
CTX?
    Mr. Flynn. Not yet. The L-3 has been certified, and we are 
intending to deploy it.
    Mr. Olver. Okay. Who produces the InVision machine?
    Mr. Flynn. InVision Technologies of California.
    Mr. Olver. And the other machine is from where?
    Mr. Flynn. L-3 Technologies, I believe. L-3 systems of New 
York and Florida.
    Mr. Olver. That is in New York and Florida.
    Mr. Flynn. And part of it is in Boston, also.

                               bag match

    Mr. Olver. Largely irrelevant to the issue.
    Now please tell me what a bag match is?
    Mr. Flynn. Bag match, simply stated----
    Mr. Olver. Since we are talking about nothing that we are 
carrying on in this from what my ranking member from Minnesota 
clarified.
    Mr. Flynn. If a passenger checks a bag under bag match and 
the passenger does not board the aircraft, then that bag may 
not be loaded. If it hasn't been loaded. If it has been loaded 
it must be taken off the aircraft.
    Mr. Olver. So you have loaded stuff, and then you have a 
person who didn't and so----
    Mr. Flynn. You have to find that bag and get it off.

                      explosive detection systems

    Mr. Olver. All right. Now, with that, let me take this 
chart, which is page 15 of your testimony, Admiral. I think it 
was your testimony, the group of charts, it is a resolution of 
the EDS automatic alarms.
    Mr. Flynn. Right.
    Mr. Olver. ------
    Mr. Flynn. That is correct.
    Mr. Olver. ------
    Mr. Flynn. ------
    Mr. Olver. ------
    Mr. Flynn. ------
    Mr. Olver. Okay, so the number that is in the bar, the 
yellow bar, is the total number of bags that was sent through?
    Mr. Flynn. Correct.
    Mr. Olver. ------
    Mr. Flynn. ------
    Mr. Olver. ------
    Mr. Flynn. The machine detected it. This is resolution of 
the automatic alarms.
    Mr. Olver. What does that mean, resolution of the automatic 
alarms?
    Mr. Flynn. The machine checks all bags that are put through 
it for the presence of explosives, but it has a nuisance rate, 
------ So the operator has to determine from ------ of the 
bags, use information that is available, take additional slices 
with the CAT scan to determine if this one is free of 
explosives or does it have a bomb in it.
    Mr. Olver. So the machines detected them all, but then the 
human had to interpret what the machine had done?
    Mr. Flynn. That is correct.
    Mr. Olver. And presumably that can be a training issue?
    Mr. Flynn. That is correct.
    Mr. Olver. And a number of these cases, by better training 
in the interpretation of what the machine's data is looking 
like, maybe we ought to get better machines also that are more 
interpretable. We have to ask whether the machine has to be 
improved even though it is detecting because humans are rushed, 
you know.
    Mr. Flynn. That is correct.
    Mr. Olver. The machinery probably isn't so rushed.
    Mr. Flynn. There is a lot of human factors work that we 
have to do there. But------does show that the job can be done.
    Mr. Olver. If I may continue with one other line here, the 
other line is the chart that you have over there.
    If I understand that correctly, in the first quarter you 
have eight airports and 12 machines in operation. The second 
quarter you have 16 and then 24, and going into the first 
quarter of this year you have 51 machines out there?
    Ms. Stefani. Correct. Fifty-one in ------
    Mr. Olver. Okay, now the real puzzle to me is with these 
machines, that in the first quarter we have 176 bags scanned 
per machine per day, then up to 307. These machines--and then 
299. Well, that is within a probable margin of error. But then 
in the fourth quarter we have some more machines on, and they 
are only doing 223 today. Is that the machine issue? Is that a 
problem with the machine or is that just the traffic went down?
    Ms. Stefani. We are also concerned looking at the third and 
fourth quarters. A couple of things were happening. Yes, we are 
getting more machines out there, and it will take each airline 
a little bit of time--once they become operational--to get 
rolling on it. But we saw in the third and fourth quarters, the 
computer-assisted profiling was coming on board. And by the end 
of year all of the major carriers had those on board. So, 
therefore, we should have seen an increase. Because the whole 
idea was, FAA required that if you had the computer-assisted 
profiling and it said that you were a selectee, you were to 
take the bag to that machine and screen it.
    In the third and fourth quarters, we also see heavy travel 
periods; and, on the basis of that, you would assume that with 
more people----
    Mr. Olver. More bags.
    Ms. Stefani. More people would be selectees.
    Mr. Olver. This is only going from ------ in the third 
quarter to ------ airports in the fourth quarter. I mean, you 
can't, by swamping out, by suddenly moving to much less 
traveled airports with those last two, but you are adding 
machines into the airports that are already functioning.
    Ms. Stefani. I am not positive on that, because each 
machine goes with a particular carrier at a particular airport, 
and that is also another key.
    One of the reasons that we had this chart was to try to 
give the spread----
    Mr. Olver. That is what I was going to go through next. I 
think probably what is happening here is that we don't have all 
of the variables in the charts. There must be something about 
the total traffic that is going on that has to be involved, 
because we have got machines that are going as high as 790, is 
the maximum that went through one particular machine.
    Ms. Stefani. At ------
    Mr. Olver. We don't know how well the human error on 
interpretation of what the machine was saying, and those 
actions are all right. I suppose when you talk about having to 
take the bag that is tested and the operator has to take it 
someplace, if they don't have to take it very far they can deal 
with a lot more bags in an hour than if they have to take it 
some distance. That strikes me as one simple thing.
    But the data on the 35 machines with 22 of them being well 
below what is the certified capacity, I mean, it is hard for me 
to see how it is that one can get an average of 176 in the 
first quarter with 12 machines running out of--and then end up 
with this chart in the fourth quarter.
    Ms. Stefani. One is an average, too. That takes ------ and 
the airline at the other end in ------ and averages it out.
    Mr. Olver. I realize that some are at Miami and some at San 
Francisco and some at Chicago. You said you have 20 where there 
are 51 now, didn't you?
    Mr. Flynn. Part of the explanation of what happened in the 
fourth quarter is that the air carriers were transitioning from 
bag match for selectees to screening bags and they didn't wish 
to have the task of retraining their bag handling and check-in 
personnel at this time of very high demand.
    The usage per machine has gone up, went up in January. I 
don't have data for February yet.
    Mr. Olver. So if there is a terrorist out there, you should 
use the fourth quarter because the personnel are so stressed?
    Mr. Flynn. No. The bag match instead of the baggage 
screening. Those stations elected to bag match. We want them to 
move to baggage screening. But it isn't that they weren't 
securing the passengers' bags.
    Mr. Olver. This data are all bag match?
    Mr. Flynn. No, it is screening. But the choice that 
carriers had initially, when they didn't have machines, they 
were bag matching. They got new machines but got them right 
before Thanksgiving and right before Christmas, and instead of 
saying we will defer until after New Years, the retraining of 
everybody who has to know how it is that you control and move 
these bags.
    Mr. Olver. Maybe if I saw this chart for each of the other 
quarters--I am trying to infer data, I suppose, from too 
little.
    Mr. Flynn. I think if Alexis and I were to see you in the 
office, we can fill in some of the factors that have to be 
inferred. We can make them explicit.
    Mr. Olver. Looking at this, I keep thinking, oh, my 
goodness. These data need to be standardized. You need to 
standardize for a hundred bags being sent through a machine to 
really know what is the reliability of the machinery in the 
various placed versus what is human factors. There are a bunch 
of different things for a proper statistical examination here I 
think that are a little bit different to discern from what you 
are giving out, what you are showing.

                               profiling

    Mr. Wolf. We have a vote and another vote, so what we will 
do is recess and come back after that. Much of what I missed 
Mr. Olver said and I do agree with. I think it is important to 
go by and spend some time.
    Secondly, this is an important issue. The future is--I was 
in Algeria last year, and life is unbelievable. Bombs go off 
everywhere, and it is making people crazy. The don't know to 
deal with it, and we could potentially go there.
    Secondly, your San Francisco thing with ------ and ------ 
When you go to Dulles, ------ If you fly ------ and everyone 
ought to have it. Plus the profile works, but it ------ I was 
stopped coming out of a country, and I don't meet the profile, 
and yet Timothy McVeigh wouldn't meet your profile here.------
    Mr. Flynn. I don't know. It depends.
    Mr. Wolf. So what you are looking for is ------
    Mr. Flynn. It is much more complicated. We need to brief 
you.

                      explosive detection systems

    Mr. Wolf. They went through it at Dulles and--the countries 
that they particularly look for and the ones that they kind of 
look for.
    But I think it would be important to meet with the airlines 
and say there is no excuse for the baggage to be one at one 
airport and not at the other.
    Also, the taxpayer paid for these machines. They were paid 
for, and they ought to be used full time, day in and day out, 
as many bags--because the more bags going through the more the 
operator is trained and screened and understands. While we 
don't have a problem in the country, we don't want to get to 
the point we do.
    I am reluctant for the next hearing. I have some questions, 
and you don't want to scare people, but yet you don't want to 
create a problem or plant a seed.
    I think you should be meeting individually with the 
airlines. ------ doing a good job. ------ you are a mess. Get 
it up or we are going to fine you.
    If I am traveling, and my wife and five kids are on that 
plane--my daughter going to El Salvador flew ------ I want to 
know that they have it. And if I have to pay $4 extra and wait 
a little bit in line so I don't want to get the telephone call 
that the people on Pan Am 103 got--so I think you have to meet 
with the airlines, less with ATA and more with the airlines.
    But we will recess at this time and return in open session.

                          FAA Opening Remarks

    Mr. Wolf. Good morning. We had the closed session earlier. 
We can now begin with the unclassified session. We can begin 
that portion of the hearing, however you see fit to begin it. 
Mr. Hall, do you want to come up to the table, too?
    Ms. Garvey. Mr. Chairman and members of the subcommittee, 
thank you again for the opportunity to appear before the 
subcommittee to discuss the issue of safety and security. I 
will begin with some very brief comments about aviation safety.

                      aviation security investment

    Certainly the White House Commission on Aviation Safety and 
Security rightly identified civil aviation security as a 
national security issue. The administration's budget request 
includes more than $300 million for aviation security, and we 
believe that that budget request allows us to move forward on a 
number of very important issues. A number of the actions that 
we will be undertaking this year will be new, focused 
rulemaking, improved access control, deploying advanced 
explosive detection technologies, conducting joint FAA/FBI 
vulnerability assessments, performing realistic operational 
testing, and deploying explosives detection canine teams.
    Congress has a strong record in the area of aviation 
security in funding these very important programs. Congress 
provided $157 million for advance security equipment for the 
years 1997 and 1998 and an additional $100 million in 1999 to 
continue that important deployment. We have requested a third 
installment of $100 million in the year 2000.
    I want to briefly mention what the federal investment has 
produced. Security equipment for checked baggage has been 
installed, as we heard this morning, at over 30 airports, while 
the trace explosive detectors for carry-on bags are being used 
at more than 50 airports. The agency is working very closely 
with airports and with airlines to continue the installations 
and plans to buy and deploy even more equipment over the next 
few years. We will also be working with airlines and airports 
in a variety of ways to put in place an effective screener 
workforce.
    In 1999, 21 FAA/FBI threat and vulnerability assessments of 
airports are scheduled. The explosive detection canine team 
program grew from 87 teams at 26 airports in 1996 to 157 teams 
at 39 airports in 1998. In addition, the FAA continues to 
encourage security consortia that are formed in partnership 
with members of the local airport communities. I am delighted 
to say over 110 airports have voluntarily formed consortia.
    We continue to expand the use of realistic operational 
testing of the aviation security system. We project 10,000 
screening evaluations will be completed in the fiscal years 
1999 and 2000. In addition, approximately 4,200 dangerous goods 
assessments will be completed in 1999 and 5,000 in 2000. In 
conclusion on the security issue, the FAA is making very 
serious attempts to address security challenges, working 
closely with the IG, as you heard this morning. We believe our 
budget requests will further our progress on these fronts.

                            aviation safety

    Very briefly turning to the issue of safety for a moment, 
as you mentioned yesterday, Mr. Chairman, the United States air 
carriers and commuter airlines just completed their safest year 
ever. As one editorial writer characterized it, ``this 
achievement was a triumph of brainpower over gravity.'' But we 
know that we must keep focused on this very, very important 
issue.
    Last year, as you know, Mr. Chairman, in concert with the 
aviation community, we developed Safer Skies, a focused safety 
agenda. This is a data-driven approach to identifying the 
leading causes of accidents and the interventions that can make 
the biggest difference in preventing them. We want to put our 
efforts where they will make the most difference. We are 
working collaboratively with industry to develop and implement 
interventions for the operation and the maintenance of 
commercial and general aviation.
    Just a couple of examples. Historical data tells us, for 
example, that uncontained engine failure and control flight 
into terrain are serious causal issues in commercial accidents. 
We have issued since April, 9 airworthiness directives on 
contained engine failures. We are turning those into final 
rules this month, March. We have also issued a notice of 
proposed rulemaking on terrain awareness and warning systems. 
Many major airlines have already begun installing these 
systems, and Boeing is putting the enhanced ground proximity 
warning system into its production lines. We are also very 
pleased to announce that the general aviation team is coming 
together. They are working through the challenges with us. 
General aviation is really a new partner on the whole issue of 
a very concerted and focused safety agenda, but it is very 
important to have them at the table.

                           runway incursions

    I want to mention one issue because it is very important, I 
know, to this committee, to Chairman Hall, and to the IG as 
well, and that is the Runway Safety Program. That is an 
extremely important part of our focused agenda. It runs through 
both the commercial and general aviation.
    After looking at the very fine work that was produced by 
the R&D committee, by Mitre, by the IG and also the 
recommendations from the NTSB, we are taking a three-pronged 
approach on runway incursions. We are focused on some short-
term efforts. We have been told by many that the situational 
awareness for pilots and controllers is not as it should be. We 
are focused on increasing our training. We have a website in 
place. There is a great deal of emphasis placed on raising the 
awareness of what runway incursions are and how they can be 
prevented.
    More importantly, I think we have been able to identify, 
again with a lot of help from our colleagues in other 
government agencies, the 20 airports where runway incursions 
are really a problem. We have put together a team. Mr. Hall and 
I had a very good discussion about a year ago about involving 
the airports in the runway incursion programs internally to the 
FAA. Our airport's office is very much a part of this program. 
We have teams for 20 of those airports. Their job is to do the 
on-site review and come up with very specific recommendations. 
Each airport is different, and we want the plans to make sense 
for those airports. We have a wonderful success story with 
Cleveland. In 1997, they had a real runway incursion problem. 
We sent in a team, and in 6 months the runway incursions 
dramatically reduced at Cleveland. So we think that we have a 
good model there.
    We are also taking a very intensive look at the safety 
analysis, again data driven. We need to figure out what is 
causing it. This summer we will have from our safety analysts 
some very specific recommendations on what is the root cause of 
some of the runway incursions.
    Finally, technology continues to be an important issue. 
AMASS, which this committee is very familiar with, and Chairman 
Hall has seen in operation, is at three sites in San Francisco, 
Detroit and St. Louis. We do have some human factor issues, and 
we are working those through with the controllers. There is a 
meeting next week at the Technical center with the controllers 
and some of our engineers to really work through these issues. 
So a three-pronged approach, first runway incursions, is very 
important, and working closely with government organizations 
because I think this is definitely an area where partnership is 
going to make a difference. Next, commercial then, data-driven 
focused safety agenda; general aviation, a focused safety 
agenda; and then, finally, the third area, cabin safety. That 
area has had some very important improvements in the last year 
since we announced the agenda. The group has focused on carry-
on bags, on the Turbulence Happens public education campaign, 
and child restraint systems as well. Again, an area where I 
think we have made some very significant improvements.
    With that, I will conclude my statement and am prepared to 
answer any questions, Mr. Chairman.
    [The prepared statement of Jane Garvey and biography of 
Cathal Flynn follow:]

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                   Inspector General Opening Remarks

    Mr. Wolf. Ms. Stefani.
    Ms. Stefani. I appreciate the opportunity to speak today on 
aviation security and aviation safety. I will begin with the 
security. FAA is requesting $317 million for its security 
programs this year. During the past year working with industry, 
FAA has completed implementation of the automated passenger 
profiling system to replace the manual profiling system; and 
they continue to make progress in deploying explosives-
detection equipment to airports nationwide. As of February 25, 
FAA has installed new security technologies, including 72 
certified explosive detection equipment and 345 trace-detection 
devices at U.S. airports.
    An important message of my testimony today is that aviation 
is a layered and integrated system of systems, and security 
really depends on a careful blend of the technologies, the 
procedures, a trained security force and FAA's oversight--to be 
successful. Industry and FAA will need to continue to work 
cooperatively to maximize the use of the explosives-detection 
equipment, improve operator performance, and increase training 
on security awareness.
    First, I would like to discuss FAA's progress in deploying 
advanced security technologies, specifically the explosive 
detection equipment. FAA and industry are in the third year of 
a significant and unprecedented deployment of this 
sophisticated equipment. Its cost is significant. So far, 
Congress has authorized $258 million for this equipment. The 
equipment, in our opinion, is still underutilized, but usage is 
increasing.
    Data also show that the equipment has potential for more 
aggressive use than is now being done. The experience FAA has 
gained and the lessons learned to date will affect how FAA 
deploys and uses the equipment in the future.

                     baggage security requirements

    My second area deals with the status of implementation of 
new security requirements for checked baggage. This is, in 
fact, use of the new explosives-detection equipment and the new 
automated passenger profiling system.
    In all of our tests, the automated passenger profiling 
system worked as intended and identified our testers as 
selectees. However, the test results for the other equipment 
showed the proper use of the equipment was not as high. And in 
our opinion it is predominantly the result of the human 
element, FAA will have to be involved in more training and 
working a little more with the operators of this equipment.

                             airport access

    The third area that I would like to talk about in security, 
deals with access control; and this is the controls in place, 
and how well they are being implemented to prevent unauthorized 
access to the secured areas at airports. We are still finding 
inadequate implementation.
    FAA's oversight, the airport operator's and air carriers' 
programs will have to be improved, have to reward compliance. 
Basically, individuals responsible for ensuring unauthorized 
people don't have access--we found that the human element is 
the primary weakness.
    We are doing testing. At this point in time we have been at 
five major airports, and we had previously reported this issue 
in 1993, and we are finding similar situations.
    In our opinion, FAA's testing of this area would help 
improve the situation. They need to do more tests, broader 
tests, more often and be more aggressive in their activities. 
We have been working and briefing the airports and airlines in 
each case and we have had positive response in every case. They 
have begun to take corrective action in the airport security 
area.

                            aviation safety

    I would like to move to aviation safety next. FAA is 
requesting about $670 million in operations funding for 
aviation safety. We would like to commend both FAA and the U.S. 
air carriers, including the commuter airlines, for their zero 
fatal accident records this past year. Additionally, FAA's 
strategic plan and Safer Skies agenda are both proactive in 
addressing safety risks.
    Today, I would like to discuss three areas where FAA and 
industry can make a safe system safer.

                           runway incursions

    First, FAA's initiatives to respond to rising levels of 
runway incursions and operational errors. Second, FAA's 
programs to obtain and use safety data to target inspections. 
Third, opportunities to enhance surveillance and be more 
proactive in reducing risks.
    FAA has two goals in the first area: to reduce runway 
incursions, and to reduce operational errors. However, in our 
opinion, the agency is at risk of not meeting either of these 
objectives.
    [The information follows:]

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                           runway incursions

    Ms. Stefani. As shown in the chart, in the past 6 years the 
number of runway incursions has steadily increased, from 186 in 
1993 to 325 in 1998. FAA's goal is to reduce the number of 
incursions by 15 percent from the 1997 base level by the year 
2000. Last year, however, runway incursions increased 11 
percent over the 1997 level, from 292 to 325.
    FAA has developed an action plan that identifies 
approximately 50 specific areas to reduce runway incursions. In 
our opinion, this action plan is a very sound foundation to 
effectively reduce the number of incursions.
    The challenge now, in our opinion, is to set aside the 
funds and to follow through on the plan. What we found when we 
were discussing the various activities and projects in the plan 
was that there was no specific set-aside funding to carry out 
the activities. As a result, FAA has made limited progress and 
milestones have been missed.

              flight operations quality assurance program

    I would like to now move to the second area and discuss two 
programs where FAA is attempting to obtain data and then target 
their inspection results.
    The first area is called FOQA, which is the Flight 
Operations Quality Assurance program. Here FAA is intending to 
issue rulemaking that would allow it to collect data from 
airlines from the black boxes on the planes, which actually 
record the information on what has happened during the flight. 
FAA wants to get that voluntarily submitted from the airline 
and use it to proactively identify safety trends. For example, 
early identification of technical flaws or unsafe practices 
could significantly help FAA to reduce the accident rate.
    The FOQA rule was supposed to be implemented back in June 
of 1997, but there were concerns raised by the airlines and 
their crews who were concerned about data disclosure or use of 
the data by FAA for enforcement.
    In December 1998, FAA issued a policy letter, saying that 
to address these concerns, the agency agreed to waive 
enforcement actions except on the most egregious cases. 
However, there is still an issue being debated and that is, if 
we allow that kind of enforcement practice with the FOQA rule, 
how would it impact other agencies and their industries? In our 
opinion, FAA must continue to move forward with this rule 
because of the potential added safety benefits.

                         air carrier oversight

    FAA is also reengineering its air-carrier oversight. It is 
called ATOS or the Air Transport Oversight System. It has been 
initiated at 10 carriers. It is supposed to be data oriented. 
FAA uses the data from the carrier to target what it is going 
to look at. The effectiveness of the system may be reduced if 
planned budget cuts prevent the hiring of the individuals who 
will actually do the data analysis for ATOS.
    The last two areas concern the air tour industry. FAA has 
the opportunity, a rulemaking in process, that will expand 
safety rules nationwide to all air tour operators. When the FAA 
initiated rules in Hawaii and the Grand Canyon, accident rates 
dropped from 25 before the rules to three after.
    The area of spare parts, especially unapproved spare parts, 
continues to absorb about 14 percent of OTG's resources. We 
have seen major improvements in FAA's oversight. I think the 
most notable improvement is that approximately 1,850 of their 
inspectors have received training in detection of suspected 
unapproved parts.
    That concludes my statement.
    [The prepared statement of Alexis Stefani follows:]

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          National Transportation Safety Board Opening Remarks

    Mr. Wolf. Mr. Hall.
    Mr. Hall. Good afternoon, Mr. Chairman and members of the 
subcommittee. It is a pleasure to represent the National 
Transportation Safety Board before you today on the subject of 
aviation safety.

                          aviation statistics

    As has been mentioned, 1998 was the first year that no 
passenger died on a scheduled part 121 or part 135 carrier in 
the United States. That is a remarkable achievement.
    Look at the statistics. In 1998, the airlines carried about 
611 million passengers on almost 11 million flights. The more 
than 500,000 people employed by scheduled air carriers in the 
United States, and the 40,000 plus employees of the FAA led by 
Administrator Jane Garvey, should be commended for this 
outstanding record.
    My prepared testimony, which I have submitted for the 
record, discusses five safety issues. In the interest of time I 
would like to briefly mention only two, flight recorders and 
collision avoidance systems. Of course, we will be glad to 
answer any questions on these and the other three issues--
aircraft icing, runway incursions and child safety.

                            flight recorders

    The upgrading of accident recorders is a top priority of 
the Safety Board and has been an issue on the Board's most 
wanted list of safety improvements since 1990. The purpose of 
flight recorders, whether it be a cockpit voice recorder or a 
flight data recorder, is to collect data that can help us learn 
from incidents to prevent accidents. What these most important 
devices tell us is how to prevent accidents.
    The Safety Board and this subcommittee have for many years 
prodded the FAA to require upgraded recorders on transport 
category aircraft, but sadly most of our fleet is still 
outfitted with outmoded models. Just 2 weeks ago, a control 
incident involving a Metrojet Boeing 737 occurred. The aircraft 
had an 11 parameter recorder on board. Once again, because of 
FAA and industry inaction, the Safety Board does not have 
important information needed to find out what happened on that 
737.
    As you are aware, Mr. Chairman, the Safety Board has 
urgently recommended that the FAA require all transport 
category aircraft to have upgraded flight recorder capability 
and asked that the FAA expedite this action with regard to the 
Boeing 737. This, of course, was done several years ago. 
Although the FAA has published a final rule mandating the 
inclusion of almost all of the data parameters but not all of 
the parameters we originally recommended, we are concerned that 
the completion of this upgrade is now still 3 years away.
    In addition, the FAA chose not to single out the 737, as 
urgently requested by the Board. The Board's safety 
recommendation on the 737 asked for an effective date of 
December 30, 1995. The FAA's rule has an effective date of 
2002. In addition, the Metrojet's in-flight event was not 
preserved on the cockpit voice recorder because the 30-minute 
continuous loop had recorded over the event.
    Important safety information is often lost on cockpit voice 
recorders that only record for 30 minutes. Two years ago, the 
Safety Board recommended that the FAA move expeditiously to 
equip aircraft with 2-hour cockpit voice recorders so that 
valuable investigative data could be retrieved during accident 
and incident investigations. To date, the FAA has yet to 
require the 2-hour recorder.
    Another problem is the loss of recorder data due to the 
interruption of aircraft electrical power. The Canadians' 
investigation of Swissair flight 111, on which we have been 
working with the Canadian's, has been hampered because the 
cockpit voice recorder and the digital flight data recorder 
both stopped nearly 6 minutes before the airplane hit the 
ocean. The NTSB and the Canadian Safety Board yesterday 
recommended that cockpit voice recorders be retrofitted on all 
airplanes required to carry both a cockpit voice recorder and 
the flight data recorder with a cockpit voice recorder capable 
of recording the last 2 hours of audio. We also recommended 
that it be fitted with an independent power source that will 
provide 10 minutes of operation whenever aircraft power to the 
recorder ceases.

                      collision avoidance systems

    The second issue I would like to discuss briefly is Traffic 
Alert and Collision Avoidance Systems. We believe the 
regulation regarding the phased installation program of TCAS II 
should include cargo aircraft. A week ago yesterday, two large 
cargo planes nearly collided at 33,000 feet over Kansas City. 
Both planes apparently lost radio contact with the air traffic 
control center.
    Domestic air cargo nearly tripled between 1980 and 1996. 
The growth in cargo operations, and I think, most importantly, 
we should remember it includes the carriage of 8 million pounds 
of hazardous material freight which is shipped by air daily, 
has brought an increase in daytime flying for cargo operators. 
This means they are increasingly using the same air space at 
the same time as passenger carriers. The traffic mix and 
density increases the challenge of maintaining safe separation 
among aircraft. While it is encouraging that since the incident 
last week the FAA has issued press statements that it now 
favors TCAS on cargo carriers, we are looking forward to 
official documentation of that fact.

                    foreign accident investigations

    Mr. Chairman, before closing I would like to briefly 
mention the Board's increased activity in foreign aviation 
accident investigations. In 1998, 110 United States citizens 
were killed in foreign aviation accidents, and a United States 
citizen can be found on most air flights anywhere in the world.
    Several years ago, the FAA acted on Safety Board 
recommendations regarding one level of safety between small 
commuter airlines and large air carriers. As code-sharing 
agreements continue to increase, we plan to monitor this 
situation very closely to determine whether safety 
recommendations are appropriate.
    It is apparent to me, Mr. Chairman, that issues of aviation 
safety are no longer parochial but are international in nature. 
The NTSB will be more and more involved in foreign accident and 
incident investigations as our airlines become more entwined 
with foreign counterparts, and U.S. aircraft and engine 
manufacturers find themselves competing more and more with 
foreign countries.
    That completes my testimony, Mr. Chairman. I will be happy 
to respond to any questions. Thank you.
    Mr. Wolf. Thank you, Mr. Hall.
    [The prepared statement of Jim Hall follows:]

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                   faa response to oig/ntsb testimony

    Mr. Wolf. We have a long list of questions, but let me just 
cover some of the ones that came up in the testimony.
    One, I want to reiterate and I think the record already 
shows the commendation with regard to your job at the FAA, Ms. 
Garvey, with regard to the safety record last year and also 
with regard to your employees, because you are no better than 
your employees and I think you should be commended, as Mr. Hall 
said.
    Having said that, in these hearings we stress the problems 
and not the progress, but just because we talk about some 
problems does not mean that we think that it is all bad. I 
think the record ought to show that.
    What I would ask you to do in the next 2 weeks, if you 
could take the IG's testimony and rip it apart and say where 
they are wrong and right, and where they talk about dates, 
actually have a test.
    If you recall, when President Reagan was President of the 
United States, he had team A at the CIA that said here is what 
the Soviet threat is, and he had a team B saying that is not it 
or this is what we should be doing. If you would do the same 
thing with regard to Mr. Hall's testimony, and we are going to 
share this with all of the members, and as you know the members 
are at other committee meetings. If you can do the same with 
Mr. Hall's committee testimony, rip it apart and say why he was 
wrong or why you think that it should be just the opposite--and 
I know this is an exercise--if the IG could submit for the 
record here and we will get this to all members, comments on 
your and Mr. Hall's comments.
    [The information follows:]

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                          ntsb recommendations

    Mr. Wolf. I think safety is so important. As a father of 
five kids and a husband, and as we care very deeply for the 
pain and suffering and agony of Pan Am 103, which was an act of 
terrorism and, hopefully, those people will be brought to 
trial. Also the TWA flight, which I know you and Mr. Hall did 
such a tremendous amount of work on, which is apparently a 
mechanical failure, we are not completely sure, the report has 
not come in yet, but I think we have to err on the side of 
doing too much. So if you will comment on their testimony and 
then either knock it down or agree, whatever, and then if Mr. 
Hall and the IG, Mr. Mead, that you will also do that.
    And what I would like to do is share it with all members of 
the committee and also with other Members of Congress who have 
a direct interest in aviation. I think the testing of this 
issue is so important to make certain that everything possible 
is done; and I know, Ms. Garvey, you share that interest.

                       most wanted safety issues

    How many on the most wanted recommendations have you made 
with regard to the FAA and how many have not been done or are 
outstanding?
    Mr. Hall. Well, most of the ones are included in my 
testimony. The flight recorders, the issue with the TCAS and 
child safety seats and icing.
    Mr. Wolf. So there are four?
    Mr. Hall. Yes.
    Mr. Wolf. How long have those four been on the list?
    Mr. Hall. Mr. Chairman, I would have to provide that for 
the record. But I think flight data recorders and the icing 
probably have been on longer than any of the others in terms of 
age.
    [The information follows:]

    There are currently four aviation-related issues on the 
Board's ``Most Wanted'' list. The issues and the date the item 
was placed on the list follow.

    Runway Incursions..................  September 1990.
    Fatigue (Multi-modal Issue)........  September 1990.
    Airframe Icing.....................  May 1997.
    Explosive Mixture in Fuel Tanks....  May 1997.


                 faa's response to ntsb recommendations

    Mr. Wolf. Would you like to comment?
    Ms. Garvey. Thank you, Mr. Chairman.
    One good point. I think the meetings that Chairman Hall and 
I have had every 6 months on the 10 most wanted list have been 
extraordinarily helpful.
    I think on the issues that the Chairman has raised, we have 
some good news. I really welcome your suggestion earlier to be 
able to respond to that. I think, overall, we do pretty well 
with the NTSB. Sometimes there are strong professional 
differences on both sides. It is not because people don't care 
about the issues, as you suggested. They are very good 
professional people on both sides. And in those cases, 
particularly where I think recently we have some differences, 
we are trying very, very hard to sit down and work those out 
and come to some accommodation.
    Mr. Wolf. On flight recorders, how can you not do what they 
are asking?
    Ms. Garvey. On that one, as the Chairman mentioned, the 
rule was put in place, but I was not there at the time that 
date was decided upon. That is in place, and we have talked 
about both of us being somewhat disappointed as to the record. 
Although I would say, for example, that Southwest has done very 
well on that. We have talked about--certainly you can go 
through another rulemaking process.
    I think it is worth, as you have suggested on other issues, 
using this position as kind of a bully pulpit to work with the 
industry and call them together and see if they can get out 
ahead of the rule. I don't know if that is a combined letter 
from myself and the Chairman or whether that is just the FAA, 
but I think it is certainly worth doing.
    Mr. Wolf. I would hope that you could do that.
    I think Mr. Hall makes a very good point. Obviously, the 
aviation industry, the airline companies want to have the 
safest possible air carriers that they possibly can. If they 
cannot do this now in unprecedented good times, they will never 
be able to afford to do it, and I would urge you to ask them to 
move it up to an earlier date. And if you have to go through 
with a re-regulation, if you don't actually think that would 
take more time, but I don't see any excuse not to do it now. 
And the airline profits--and I am all for companies making 
money--but they are at a record high, and more people are 
traveling.
    I think if you are going to do it, just like we are going 
to set aside a large portion of the budget surplus to pay down 
Social Security and apply it toward the debt, because you have 
to do that during the good times, I think there is an 
opportunity here to use the good times to deal with the issues, 
because the good times may not last and then they can tell you 
that they cannot afford it. If you can keep us informed, maybe 
a letter that you can send out by the end of this week or the 
beginning of next week, I think that would be helpful.
    Ms. Garvey. I have not seen the recommendation that the 
Chairman referred to in detail, but I certainly know about it, 
the one that the Chairman referred to that was just issued 
yesterday with the Canadian government, I believe. But that is 
something that we have talked about internally and talked to 
the NTSB staff about. I think we want to respond to that 
quickly, without prejudging it because we have not looked at it 
in detail, but certainly the intent is consistent with the 
discussions that we have had internally as well.

                  runway incursions--selected airports

    Mr. Wolf. You have a list of 20 airports with runway 
incursions. Would you submit them for the record?
    Ms. Garvey. I will, Mr. Chairman.
    [The information follows:]

    The following 20 airports were selected as sites for Runway 
Incursion Action Team (RIAT) visits based on runway incursion 
statistics. A RIAT is a team of Federal Aviation Administration 
and industry experts assembled to conduct on-site evaluations 
at airports that have special problems or have been 
experiencing an unusually high incidence of incursions.
     1. Ft. Lauderdale Executive*
     2. Chicago Midway*
     3. Milwaukee Billy Mitchell Fld.*
     4. Phoenix Sky Harbor*
     5. Deer Valley*
     6. Chicago O'Hare
     7. Newark
     8. Philadelphia
     9. Pittsburgh
    10. Indianapolis
    11. San Francisco
    12. San Jose
    13. Cleveland
    14. Long Beach
    15. Santa Anna/Orange County
    16. Anchorage
    17. St. Louis
    18. Detroit
    19. Dallas
    20. Minneapolis

________________

    *Indicates RIAT completed.

                          seat belts in-flight

    Mr. Wolf. Also what is the status of the issue of seat 
belts while flying? I know that there has been some talk of 
having people belted when seated?
    Ms. Garvey. That has been an issue, Mr. Chairman, that has 
been discussed in the joint working group that we have with 
industry. The public awareness campaign that David Hinson and 
Linda Daschle initiated a couple of years ago called Turbulence 
Happens seemed to make a big difference. So we have been 
focusing on that first.
    Mr. Wolf. I was out at George Washington University about a 
month ago. Mr. Hall was out there at the same time, and they 
did a profile of accidents taking place with regard to 
turbulence and death and injury with women and children. Would 
it not be appropriate to make the recommendation that when 
seated, to remain buckled up?
    Ms. Garvey. You are absolutely right. That is a preventable 
accident. If you are belted, you will be fine.
    Mr. Wolf. That is not the fault of the pilot or the airline 
when you go through turbulent weather.
    Ms. Garvey. We are trying so hard to focus our rulemaking 
where the data is really showing that we get the greatest 
payoff. On this one we are trying the approach of working with 
the industry and really doing aggressive public awareness 
campaigns and, of course, the flight attendants reminding 
people again and again. We are seeing indications that it is 
making a difference. I think in the final analysis if that 
doesn't work we can always go to rulemaking.

               flight turbulence accidents and incidents

    Mr. Wolf. How many turbulent injuries were there this year 
from flight turbulence?
    Ms. Garvey. I would like to go back and submit that for the 
record. I don't believe that there were too many. I know the 
year before there were eight.
    Mr. Wolf. Not fatalities, injuries.
    Ms. Garvey. Let me submit that for the record.
    [The information follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                    seat belts in-flight requirement

    Mr. Wolf. Mr. Hall, do you think that makes sense to 
require?
    Mr. Hall. Mr. Chairman, I know that the rulemaking in many 
areas serves aviation safety very well. I was on a Delta flight 
yesterday coming from Atlanta to Washington and ended up in New 
York. I wonder if I will get the additional miles, probably 
won't. They announced that while seated on Delta airlines that 
you need to have your seat belt on.
    I have been on other carriers where they don't make that 
announcement, and I see no reason that can't be done. It needs 
to be consistent, not just with U.S. airlines, but with these 
foreign carriers that are operating in our country so there is 
one level of safety. We also need to address the issue of 
injuries that we see to the cabin staff. Some of the areas that 
they are in need to be padded, and something needs to be done 
with the carts that they operate with to prevent those 
injuries.
    Turbulence is an area where flight attendants put 
themselves at risk, and until we get a turbulence detection 
device and can look out ahead of the airplane and know where 
those bumps are, the airlines need to do more to protect their 
own employees.

                       airline employee injuries

    Mr. Wolf. That is a good point. I would urge you, Ms. 
Garvey, to have somebody take a look at the cart data.
    If you can also submit for the record how many airline 
employees were injured last year.
    [The information follows:]

    There were a total of 26 injuries of airline employees last 
year. Of this, eight were classified as serious and 18 as 
minor.

                    seat belts in-flight regulation

    Mr. Wolf. That is a regulation or a suggestion that I 
believe would cost absolutely no money. The seat belts are 
there. Many travelers use them automatically as the more 
experienced travelers do, but what if it is a first-time class 
flying to Washington, and young people don't fly very much. 
Maybe you don't have to issue a regulation, maybe you can do 
what Mr. Hall suggested. I think that would be helpful.
    Let me just recognize Mr. Sabo.
    Mr. Sabo. A couple of questions, to follow up this one. If 
you make it a rule, who would you penalize, the passenger who 
didn't buckle up?
    Mr. Wolf. If the gentleman would yield. I don't think that 
I would penalize the passenger. I think it is informational. I 
started to hear it after the airliner in Hawaii, I believe. I 
think to have a requirement at the beginning of the flight to 
stay buckled when seated, because many times they will tell you 
if you are going to sleep, put your seat belt outside the 
blanket. I am not into penalties, but to have a standard----
    Mr. Sabo. I don't disagree with that. Most airlines I have 
been on, I hear that announcement.
    Mr. Hall. Well, it is recent. I think the airlines should 
be complimented for stepping out on this, and a lot of it is 
due to Jane's leadership and the leadership of the ATA in 
taking on this issue.
    But when you are unbelted, Mr. Congressman, you can 
endanger other people. If you are just endangering yourself, 
that is one thing; but you are a danger to other people. Right 
now, if you get into bad weather and don't buckle up, they will 
come and buckle you up.
    I think it is a matter of common sense. Obviously, there 
are rules and regulations for aggressive passengers that don't 
follow the simple basic rules but I think in this situation it 
is just a matter of having it standard, that there be a 
procedure. I doubt if there would be any resistance at all to 
that.

                    safety--equipment and personnel

    Mr. Sabo. I think every flight I have been on I hear that 
announcement. I am not sure how you require it if you have 
somebody who won't buckle up.
    Just listening to all of the testimony, most of it relates 
to equipment. As a broad theme as we deal with aviation safety, 
what is more important, the question of doing additional 
equipment or making sure that we have competent trained 
personnel? Whether it be for FAA or for the airlines.
    Ms. Garvey. From my perspective, the competent trained 
personnel and the issue of human factors really seems to go 
together as we look at our Safer Skies agenda. As we look at 
some of the historical data; and, hopefully, the new data 
through the FOQA program, we will see human factors issues, 
that place where the crew interacts or the human interacts with 
the equipment. That really is an overriding factor. So human 
factors and good training I think are very important.
    Technology is important; and, like all complicated issues, 
it is hard to separate one from the other. It really is the 
combination of taking advantage of the technology, whether it 
is AMASS, ASDE, ASDE-X or whatever, and training the personnel 
adequately and well. I think it is the combination. But if I 
had to choose one, I think it is the human factors issue. I 
don't know, Jim, if that is consistent with your thoughts.
    Mr. Hall. Congressman Sabo, you ask a very difficult 
question. The truth of the matter is both. It is very hard to 
separate what is more important, the equipment which is really 
flying the airplane most of the time or the training of the 
individual. I think it is really both.
    Aviation has changed and is changing. The big issue is what 
the administrator touched the interface between the trained 
individual and the piece of equipment. That is where good 
flight data recorders, cockpit voice recorders help us find out 
the problems and address them before we end up with any 
accidents.
    Ms. Stefani. I would basically agree that it is both. What 
we have seen recently, as we have gotten more computerized, is 
that the interrelationship between the human and the machine 
and how well they are trained, how well they understand what 
the machine is or is not doing becomes very significant. We 
have seen it in the security area and in the safety area and in 
air traffic control modernization, that the human element is 
extremely important.
    Mr. Sabo. How important is it in the training and 
background of the personnel to make sure the machines work 
accurately? The reason I ask, we always have to make choices, 
maybe not dramatic, but we have to modify a little bit here or 
there to accommodate something else.
    Ms. Stefani. I am not sure I understand.
    Mr. Sabo. In terms of what we do with our money.
    Ms. Stefani. In the safety area, it always comes down to a 
very hard decision, and I think we have seen that in STARS. 
When is enough enough? What do we do first, what changes do we 
make and what changes do we have to make?
    The security area also should have a system in place to 
look at what is going on and identifying the problem. Just as 
in the safety area with the FOQA, being able to get some data 
and analyze it and identify a trend, whether it is airport 
procedures that need to be changed or how somebody is 
interacting with a pilot that may cause a safety problem. It is 
not an easy decision or priority.
    Mr. Sabo. Thank you.

                           runway incursions

    Mr. Wolf. Thank you, Mr. Sabo.
    On runway incursions, according to the testimony of the 
Inspector General it has gone up 11 percent, to 325. In 
previous times you have had great plans, but the problem was 
not the plans, it was the implementation. I am going to go on a 
diet. When I go on a diet and lose weight it is going to be 
great, but I have to implement my program. So I think plans are 
one thing, implementation is another. Why not implement it now?
    Ms. Garvey. Well, Mr. Chairman we are. Someone said to me, 
and it is someone who works at the FAA and has been there a 
long time, she said, when I had been there for a little bit of 
time, we are good at announcing things, but it is that follow 
through that is the tougher part. That is why I think 
approaching it in that three-pronged way is so important. We 
have those great reports out there, and let's pull those 
together. That is the action plan. What are the short-term 
things? What can we do quickly?
    The public awareness, working with industry to get 
information out there is important. That is sort of a no-
brainer. Let's just do it. The 20 airports--instead of dealing 
with all of the airports, let's focus on these 20 in the 
upcoming months and make sure that we get some action items 
going there. We had great success in Cleveland with that. I 
think of that as the immediate here and now. Very often these 
are low-cost items that people need to do. Sometimes it is 
better signage. Sometimes it is changing the markings. You 
don't have to spend a lot of money to make a lot of difference 
and a lot of improvements.
    The data analysis, is going to take a little bit longer. I 
will tell you the runway incursion plan has not officially 
reached me yet. It is working through the process. That doesn't 
matter. I have been briefed enough on it, and I know what is in 
it. Let's focus on these actions that we can do now, and we are 
doing that.
    Should we have done that faster? Probably. But we are going 
to get it done. It is very, very important, and I think it is 
an area where we do see some dramatic differences when we focus 
even short term.

                     collision avoidance rulemaking

    Mr. Wolf. What about Mr. Hall's comments on cargo 
operations and cargo carriers?
    Ms. Garvey. One of the tensions in the agency and in the 
industry, is what is the right technology? The rule that we are 
developing is called collision avoidance. So we are asking for 
technology that provides the collision avoidance. We are doing 
the rule.
    Last year, on the authorizing side, there was some language 
in the bill and, frankly, we waited because we wanted to see 
because there was differing language. We wanted to make sure 
that we were heading in the right direction. When the 6-month 
bill was passed and that language wasn't included, we went back 
to our original idea, let's just do the rule. That is where we 
are, and we will get that out this year. Again, I know the 
frustration that Mr. Hall feels. He made that recommendation a 
while ago, but we are doing it now.
    Mr. Wolf. Do you have any comments, Mr. Hall?
    Mr. Hall. I think in this situation the cargo industry is 
always going to be waiting for the next technology. And we, 
unless we act, will be behind Japan, Europe and almost the rest 
of the world in terms of the protection on cargo aircraft. Even 
India, which, because of the accident, is requiring TCAS. I 
don't mean to be disrespectful to India. The administrator and 
I meet regularly and discuss safety issues. I have found her 
very open and aggressive on all of the safety issues.
    The rulemaking process Washington well, but some times 
rulemaking just produces delay after delay. TCAS goes back to a 
1970 recommendation that the Board made we finally got TCAS in 
passenger aircraft. However, we now have over 800 transport 
category aircraft operating over our skies in this country with 
dangerous goods and hazardous materials, and we have the 
technology to prevent midair collisions in that area, I think 
it needs to be moved on. I was pleased with the USA Today 
article and I look forward to FAA's action.
    Mr. Wolf. What does the technology cost?
    Ms. Garvey. I am not sure, Mr. Chairman.
    Mr. Hall. It is not cheap. I think it is about $200,000 to 
$250,000 per aircraft.
    Mr. Wolf. And as you install more, does the price go down 
or is it pretty much $250,000?
    Mr. Hall. I would have to check. I know that is the 
approximate cost, Mr. Chairman. It is, of course, required on 
all of the passenger category TCAS II 121 carriers in our 
country.
    Ms. Garvey. The Chairman triggered a thought. We do have 
ICAO standards where, internationally, they are moving to 
collision avoidance. I am quite sure that our rule has the same 
deadline as the ICAO, but I will check and provide that for the 
record.
    [The information follows:]

    The ICAO standard required members to be equipped with 
collision avoidance systems by 2003. In the U.S., passenger-
carrying operators are already equipped. We will propose that 
cargo carrying operators be equipped by 2004.

    Mr. Wolf. It is okay for us to be ahead of them. We were 
ahead on smoking, and now when you fly abroad a lot of foreign 
carriers they say this is a nonsmoking flight. So we set the 
pace. That is why America is a great country. We just do things 
that other people don't think can be done, and then they say, 
those Americans, they are doing all those things. I think it is 
important, and it is an issue of safety. But we will see the 
comments.
    Mr. Hall. Mr. Chairman, I would like to raise the issue of 
the identification. We had four accidents involving cargo 
aircraft in which the dangerous goods and hazardous materials 
were unidentifiable. This put the emergency response people and 
the communities at some risk.
    I want to submit for the record a letter from Federal 
Express. I met with Federal Express and asked them, because the 
four accidents all involved their aircraft, if they would take 
some leadership in this area. They are currently developing a 
fully automated, good tracking and tracing system, and they 
hope to start testing in November or December of this year.
    I think that is another important issue, and I am pleased 
to see that they are moving on this.
    Mr. Wolf. Sure, without objection.
    [The information follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                       foreign carrier accidents

    Mr. Wolf. Before we get to other questions, on the foreign 
carrier issue that Mr. Hall raised, I think it is one that is 
very, very serious. I think you take your life in your hands 
when you fly on some of the China airlines. The Chinese 
communist government--I think there is also China Airlines, so 
I want to specify different airlines, but when you are flying 
in China, I think you do take your life in your hands.
    When you are flying in some of the other countries, I 
think, as I read the report the other day--and, Mr. Hall, if 
you have any comments on this--just this past year, year and a 
half, I read about the number of deaths in China. Do you have 
that figure with regard to the number of aviation fatalities?
    Mr. Hall. I do not have that with me, Mr. Chairman.
    Mr. Wolf. Does anybody on your staff?
    Mr. Hall. We don't have it with us, but we will be glad to 
get it for the record.
    Mr. Wolf. Thank you.
    [The information follows:]

    In China in 1997, there was one airline accident on May 8, 
1997, involving China Southern airlines in which 35 of the 74 
persons on board were killed (33 passengers).
    There were no reported fatal airline accidents in China in 
1998.
    In 1999, China Southwest Airlines experienced an accident 
involving a Tupulev 154 aircraft that resulted in the deaths of 
11 crew and 50 passengers.

                              code sharing

    Mr. Wolf. Could we be doing a different job or a better job 
of letting American flyers, American citizens know that when 
they are flying on air whatever it is you want to name it that 
there is a potential problem?
    Now I know that there are travel advisories that you can 
see in the Washington Post Sunday section, the travel section, 
but everyone doesn't read all of those. Do you have something 
now that is on the internet showing the safety records of 
different airlines around the world?
    Ms. Garvey. Let me ask Irish Flynn to respond. But let me 
mention on the code-sharing issue that DOT is today releasing a 
rule that will expand the disclosure. That is, travel agents 
will have to disclose code sharing, who is part of that code 
sharing. So that constant kind of disclosure is very important 
as well. I know that has been an issue that we have talked 
about with Mr. Hall, particularly during the most recent 
accident last year.
    Mr. Wolf. That will be printed on the ticket or verbally?
    Ms. Garvey. I am not exactly sure how the travel agent will 
have to provide that information, but that will be part of it.
    In addition, just to go back to the International Aviation 
Safety Assessment program, which we talked about before. That 
is the kind of oversight that we provide through our regulation 
office. We have done a first pass at most of the countries and 
we are monitoring that and working very closely with ICAO on 
all of those safety standards in foreign countries where our 
citizens travel. So that is a very important focus.
    Mr. Hall joined me in Montreal last year for a conference 
with all of our colleagues where we were able to talk. In fact, 
we met with the Chinese leaders on some of the safety issues as 
well as getting information.
    Mr. Wolf. We have to be careful with the Chinese. If you 
read today's paper, they were stealing technology for missiles. 
The Chinese military has agents directed towards this 
government. We really cannot trust the Chinese government.
    Since President Clinton returned from China, the human 
rights violations in China have increased. So their word is not 
very good. They have a Catholic priest in jail and a Catholic 
bishop in jail. They have plundered Tibet. They are selling 
technology to certain enemies of this country. They are now 
denying that this gentleman out in the laboratory in the west 
was even involved. So I don't know that we can necessarily 
trust them. Just to tell me that we have been sitting down with 
the Chinese government does not mean they are doing the safety 
things they say.
    Ms. Garvey. I understand.
    Mr. Wolf. I would like to see some way that if a mom or a 
dad had a child, let's say leaving to go to work on a mission 
project or working somewhere, could find out the air carrier 
that they were going to be flying on that was not an American 
carrier, to see what the safety record is. How can we do that? 
I think we almost have an obligation, particularly with the 
sharing that you are now seeing. How do you let someone know? I 
think we have an obligation to the traveling public.
    On Pan Am, as I said the other day, on Pan Am 103, the 
employees at the FAA knew that they ought not fly. The 
employees at certain national security agencies knew that they 
ought not fly, but apparently the American citizens on that 
plane did not know.
    We now will not allow American citizens who fly to Algeria 
to fly to France and fly on the Algerian airlines. All of our 
government people who work in the American embassy in Algiers 
come in a private aircraft, a private aircraft. Well, what if 
you are a citizen and are flying, should you not know what the 
incidents are and what the problems are? But how do you find 
out? If you book a ticket and you want to go to Algeria to see 
the Casbah or something, how do you know? Nobody tells you. You 
say you take this airline to Paris, and in Paris you switch, 
and it is a 2-hour flight.
    Is there not some way that we can on a monthly basis put 
out something whereby the American traveling public knows? Now, 
once they know, that is their decision. But not to know, I 
think is bad. So how can we on a monthly basis do an update so 
they know?
    Mr. Flynn. Mr. Chairman, when it comes to matters of 
security and threats of terrorism, there has been a very 
rigorously enforced rule of no double standard.

                          year 2000 compliance

    Mr. Wolf. Correct. We were also talking about airline 
worthiness, safety inspections? How well does China inspect? 
How well does the country of XYZ inspect? Are they up to date 
on the Y2K? Are they up to speed in Uzbekistan on Y2K? Have 
they revamped their computers and put in new computers? Where 
are they in Central and South America? That type of activity 
can be more dangerous in some respects because it impacts on 
anybody that is going to fly and not just where it is a threat. 
Can we come up with a program whereby on the internet, at 
www.com something or other, they will have the ability to find 
out?
    Ms. Garvey. On Y2K, we definitely can. That was because the 
resolution that was adopted in Montreal, that countries would 
reveal exactly where they are, were they Y2K compliant by June 
30.
    As we mentioned yesterday, if they are saying, well, I am 
sorry, we don't want to tell you, that will be an indication in 
and of itself. Post June 30 we are going to have to come to 
grips with what we do about it. But the public disclosure is 
going to be a very important part of that. It was a key part of 
the discussion in Montreal. I think the airlines will have to 
make some decisions, but clearly individual citizens will as 
well. They will need to have that information.
    On the larger issue of what do we do on a monthly basis, 
that does involve DOT, and there are some bilateral agreement 
implications to that. I would like to go back and talk about 
that with my colleagues in the Secretary's office as well, 
because I certainly understand what you are saying: When there 
are safety implications, how can we let people know?

                         airline safety records

    Mr. Wolf. I have raised this at other hearings. Congressman 
Wyden as a congressman raised it several years ago. Does the 
committee have to put language directing that this be done?
    Why should any airline be opposed to letting people know 
what their safety record was last year? I don't think the 
American carriers would be that upset, because the safety 
record last year was excellent. But what about if you are going 
to China or Azerbaijan or whatever the case may be.
    Ms. Garvey. Mr. McSweeny has reminded me that the IASA data 
is available on our website.
    Mr. Wolf. Would a person like me who is not technical 
understand it?
    Mr. McSweeny. Yes.
    Ms. Garvey. The test will be if I understand it. I will try 
it this afternoon.
    Mr. Wolf. I think so, and I think we should publicize it. I 
think if you go back and look at the hearings, you will find 
that this issue has been raised for the last four years and, 
frankly, not very much has been done.
    I think the American traveling public should be up in arms 
if it isn't done. I think it is unacceptable if they pay the 
ticket--and it is not inexpensive to fly to Tegucigalpa. A 
round trip is about $750. So if I go there, they ought to know. 
It is not inexpensive to fly to some country in the former 
Soviet Union. We are not talking about regulating these 
carriers in Azerbaijan, and we don't have the right to regulate 
them unless they want to fly here, but we certainly do have the 
right to let the American traveling public know.
    Mr. Hall. Just a brief comment, Mr. Chairman. I think there 
are two issues.
    One is, what is the responsibility of the American carriers 
for oversight of their code share partners? The most recent 
example that came to my attention was the accident which 
occurred in Ecuador. A citizen of France bought a ticket on Air 
France from Paris to Quito. They would have flown an Air France 
747 to Bogota, and then they got on an Ecuadorian TAME 727, 
which was a charter from the military to complete their flight.
    I think in this country we want to be sure that when a 
citizen buys an airline ticket that there is a disclosure and 
diligence being done by the airlines with regard to who their 
code share partners are. I think they owe that to their 
customers.
    The second issue, of course, is what is being done in the 
international community. At a September meeting at ICAO, the 
whole issue of Annex 13 will be discussed. I think that will be 
an opportunity to raise this issue with the international 
community to see if we could not come up with some 
international understanding and international disclosure of 
information.
    Clearly, it is something that I think almost every American 
would believe they have a right to know about. It is public 
information that is paid for with public dollars. It is a 
matter of how we disseminate that information.
    Mr. Wolf. Well--excuse me, the IG?
    Ms. Stefani. Yes. We have just initiated a review that will 
look at DOT and FAA and their roles in this international 
aviation safety under code sharing.
    It is important that we understand. For example, if we look 
at a Boeing aircraft made here versus an Airbus made overseas. 
What are the requirements if, for example, there is an 
airworthiness issue and for a carrier in a particular country, 
are they required to make a change? Who makes that 
determination that that airworthiness directive must be 
implemented? We have just started looking into such questions, 
and it is a very complex area. We hope to come out with an 
initial product to try to explain, and provide information 
about who is responsible for safety and how it is all 
determined.
    Mr. Wolf. Well, if you can keep us informed. Maybe we 
should put language in this year.
    Mr. Hall is exactly right. I flew to Kosovo 2 weeks ago, 
and I bought a ticket on Delta. And I went to the check-in 
counter at Delta, and they told me to go around the corner to 
Austrian Air. It is a good airline, and I wasn't upset about 
it.
    At the same time, we were coming back from Bosnia once, and 
we thought that we had a Delta flight, and we flew Swissair 
coming out of--no, we actually had a Delta ticket, checking in 
at Swissair, and it was the very day of the Swissair crash. And 
on the screen in Zurich they were covering the story, and 
Swissair checked us in. And I stipulate that they are a good 
airline. I am not being critical. But we flew back to the 
United States on Austrian Air, OS, Austrian Air. So Delta 
ticket, checking in at Swissair counter, and you fly Austrian 
Air.
    So I think he makes a very good point. This is not 
regulation. I think it is just information. If you are going to 
pay for the tickets, and these are not $99 tickets, I think the 
American citizen has the right to know.
    Also, I think it is good business. I have some questions 
that I won't go into, on the airport security issue, we will 
just submit them for the record.

                           security screeners

    Mr. Wolf. But I was out at an airport in my district, which 
is Dulles, and United Airlines showed me their procedure and 
what they are doing. And I said, why don't you tell people what 
you are doing? It is wonderful. It could be a marketing tool.
    And I want the record to show I try to fly our American 
carriers because they do a good job. I feel very comfortable 
when I am in a foreign country and I see United Airlines or 
American airlines. And I think it can be a marketing tool, and 
maybe the inertia will break if you, the FAA, and I think the 
Y2K is an opportunity to do that, and I think it ought to be 
made permanent.
    But one question on the turnover. At many airports the 
turnover rate of personnel screening baggage exceeds 100 
percent, and at some airports it is up to 300 percent. What is 
the industry doing to keep that from happening? What are the 
average wages of the people that are working there?
    Mr. Flynn. Mr. Chairman, average wages of starting 
screeners nationwide is $5.52 an hour.
    Mr. Wolf. What is the average wage at McDonald's in Fairfax 
County? I think it is $6 or $7 an hour. They just make minimum 
wage?
    Mr. Flynn. Essentially minimum wage, and their supervisors 
on average make $7 an hour. It is an area where there has to be 
a much greater concentration on retaining people, training 
them; and in order to retain them they are going to have to be 
compensated better.
    Mr. Wolf. Does the FAA plan on----
    Ms. Garvey. We are issuing a rule this year, Mr. Chairman, 
which has to do with performance of companies; and it is going 
to be very much tied to how well their employees perform as 
well. We think that is going to be a driver. We can't really 
dictate what they pay, but, by establishing performance as a 
key and performance of employees, we hope that will help drive 
the market.
    Mr. Wolf. Is turnover 100 percent?
    Mr. Flynn. I have figures for 1997, Mr. Chairman. The 
average turnover rate is 110 percent, which means that the 
average person is only 6 months on the job.
    Mr. Wolf. And is wages the largest reason for that?
    Mr. Flynn. The average turnover rate went up to--the range 
went as high as 432 percent.
    Mr. Wolf. What would that mean?
    Mr. Flynn. It means you have essentially 100 turnover of 
all of the people every three months.
    Mr. Wolf. Wow.
    Mr. Flynn. The job is becoming more complex, and they are 
not going to master their job in 3 months.
    Mr. Wolf. I agree. I sat and looked at the CTX at Dulles, 
and I sat with the gentleman, and he was explaining what I was 
seeing. It literally is a CAT scan. He was slicing and slicing. 
How much time do they spend training for that machine?
    Mr. Flynn. They first have to have been experienced 
screeners on the X-rays at screening checkpoints, and then they 
have 2 weeks training in the use of the CT.
    Mr. Wolf. Do you think 2 weeks is enough?
    Mr. Flynn. Yes. It is one area in which we exceed the rest 
of the world. We know that it works in some instances. We 
clearly have to pay more attention to initial selection of the 
people who get the training.
    Mr. Wolf. Well, I think you ought to deal with that issue. 
Again, American aviation does an excellent job safety-wise, 
but----
    Mr. Flynn. The rule that the Administrator mentioned will 
go a long way. So will the introduction of better equipment, 
better operation at the screening check point and the threat 
image projection, which will give ongoing training to the 
screeners. By the way, we have deployed computer-based training 
to 36 airports, 6 to 12 workstations where people come in and 
get excellent, objective multimedia training. That will help 
also. But people have to be retained for that to work.

                             EDS EQUIPMENT

    Mr. Wolf. The CTX was paid for by all of us, right?
    Mr. Flynn. It was paid for by the funds that you 
appropriated, Mr. Chairman.
    Mr. Wolf. Should there not be a standard saying that they 
should be used at almost the maximum level for all of the 
machines?
    Mr. Flynn. We want to have enough machines to deal with the 
peak demands, which means at other times that they will not be 
used.
    Mr. Wolf. And do they use sharing at some airports, just 
one airline and not the others? Is there sharing?
    Mr. Flynn. We encourage the airlines to share.
    Mr. Wolf. How many do share?
    Mr. Flynn. There are a number of installations but not 
enough. The U.S. air carriers typically now are operating their 
own machines individually. For example, at New York, the 
terminal 1 operators, all of the carriers there combined to use 
a set of machines. There needs to be a lot more sharing of 
machines, particularly as we go to smaller airports.

                       security screener rewards

    Mr. Wolf. Stipulating that the people that run these 
airlines are good people, I think it would be helpful for you 
to have a heart-to-heart meeting with all of the presidents of 
the airlines. Obviously, the salary is very low. You may have 
one airline that is serving transcontinental and is using it 
from 4 to 7, but at 3 in the afternoon or 11 in the morning, 
they don't have any flights going out or they have one; and, 
therefore, to share would be--it is the American thing to do, 
and it is paid for by the American taxpayer, so it is not like 
it is their proprietary information or their proprietary 
machine. It is paid for by the taxpayer, and when it is not 
being used it ought to be open to everyone else.

                             access control

    You had talked about compliance, that you reward 
compliance. How do you reward compliance? Gold stars or----
    Ms. Stefani. That was in the area of access control.
    Mr. Wolf. How do you reward compliance?
    Ms. Stefani. In some cases, the airports will actually do 
tests; and if an employee challenges somebody without an ID, 
they get a $25 bonus. They get an award.
    In some cases, it could be as a result of the training 
program. If you get the right amount, you detect the threats 
that are there, you would get some kind of reward.
    Mr. Wolf. When someone finds something like a pistol and 
different things, are these people rewarded?
    Mr. Flynn. Many of the screening companies do have rewards. 
Further, on a regional basis, we select screeners of the year 
and a national screener of the year. We do that with the ATA; 
and the regional airlines association, and ALPA, are involved 
with this.
    Mr. Wolf. Are they flown to San Francisco or----
    Mr. Flynn. They are flown into Washington, and typically 
the Administrator----
    Ms. Garvey. It is actually quite a nice ceremony.
    Mr. Flynn. The woman who won last year had 179 tests and 
had been 100 percent on every one of them.
    Mr. Wolf. Who does she work for?
    Mr. Flynn. She works for ITS Screening Company, I think it 
was, and ITS is contracting to Continental.
    Mr. Wolf. That is excellent. I think it is good that you 
are doing that. The more recognition--I think positive 
compliance rather than negative, it is better.
    Cargo security, we have a lot of questions. Again, for some 
of these reasons I just don't want to ask them publicly, but 
you can furnish them for the record.
    The access issue is a serious one.

                         security action plans

    Ms. Garvey. Just one comment, that we didn't make this 
morning. But I think what was significant in the discussion 
with the IG was that the inspections went on together. Even 
though the IG is in the middle of doing the report, they were 
very encouraging of our taking some action immediately. And so 
the action plans that we are asking for the airports is done in 
full agreement with the IG.
    Mr. Wolf. Without waiting for the report?
    Ms. Garvey. That is right. It is a significant step 
forward, in my view, and consistent with other reports that we 
have had with the IG as well.

                  fy 1999 operations budget shortfall

    Mr. Wolf. I want to commend you, too, because I have seen 
previous FAA administrators who bridled at the thought of the 
IG and the Safety Board telling you what to do; and I think it 
is great that you take these ideas and move ahead and not feel 
that they are a threat. I think in some respects the record of 
last year is an indication. Certainly you have a good safety 
record, and you have been open to try these things.
    Ms. Garvey, because of what the FAA calls ``miscalculations 
in budgeting'', the new controller pay agreement and the 
inability to collect overflight fees, the FAA faced an 
operating budget shortfall of $251 million this year. You have 
recently announced a mitigation plan to address that problem. 
Are you able to find this money in your operating budget 
without affecting aviation safety?
    Ms. Garvey. We have been able to find the money, Mr. 
Chairman. We are not affecting safety, but it is something that 
I am very, very concerned about. We are watching carefully. 
Steve Brown, who works in Air Traffic Services, and some of the 
other senior management people, are taking a look at the safety 
redundancies.
    Alexis talked about the redundancies in our system. We want 
to make very sure that the redundancies that are in place are 
still there. We are checking to see how much longer it takes to 
get a piece of equipment up to speed. We have been able to 
adjust to it, but I have to say it is with some pain. The 
exercise that I mentioned yesterday of really going to our base 
and looking at it and asking ourselves some tough questions 
about do we need to do everything, are we putting our resources 
in the right place, is critical. But we began the discussion 
with, what must we protect?
    Even the ATOS program that the IG referred to is one that 
we are protecting. What we are not doing this year is expanding 
it as quickly. Even early on before the budget, because it is 
much more complex than we thought and it is a major shift for 
our inspectors, we had some good discussions about staying with 
the 10 carriers and really perfecting it. As Tom McSweeny said, 
let's make sure that we get this right before we expand it. I 
think we have been able to manage it, but we are watching it 
very carefully and would continue to like to do that with you.
    Mr. Wolf. Does the IG feel that they can do the plan 
without affecting aviation safety?
    Ms. Stefani. The proposed cuts for the aviation 
certification?
    Mr. Wolf. Yes.
    Ms. Stefani. We haven't looked in detail, and my 
understanding is that there is a $30 million cut for that 
segment--other than the ATOS portion, we have not looked in 
detail at that.
    Mr. Wolf. Are you going to look at that?
    Ms. Stefani. We can.
    Mr. Wolf. Thank you.
    Ms. Stefani. Will do.

                      office of safety assessment

    Mr. Wolf. Last year at this committee's urging, Congress 
provided funding for a new Office of Safety Assessment at the 
FAA. What are your plans for this office? When will it be up 
and operating? And, also, have ATA, the Flight Safety 
Foundation and others that were mentioned been assisting you in 
this effort?
    Ms. Garvey. They will be assisting us. We are going to use 
it. At first, we looked at setting up a committee separately. 
But as the lawyers quickly told me, there are rules regulating 
that. We think it makes more sense to do it as a subcommittee 
to RTCA. ATA and Safety Foundation have been very involved in 
our Safer Skies agenda. Although there has been some staff 
changes at ATA, I would suspect that we will have the new 
person in charge of safety join us.
    I would like to have the first meeting before the middle of 
April, the first meeting of the subcommittee of RTCA. We have 
talked to David Waterest who is the head of RTCA. He is willing 
to work with us to establish the committee.
    The issue of metrics is something that we are taking very 
seriously. In fact, we are doing a lot of work with MIT with 
Arnie Barnett and again working with our Safer Skies groups 
making sure that we are putting in place and developing 
metrics. It is very tough to do, and I am not sure that we have 
hit it yet. We have come up with a few tries, and I think the 
involvement of this group will only advance that.
    The Safety Foundation has been very helpful as well. We 
have done some good work with them on this issue of how do you 
measure metrics and so forth. They have been very involved with 
helping us with the FOQA program as well.

                         major safety programs

    Mr. Wolf. Of all of the different programs regarding 
safety, can you tell us what are the two or three most 
important efforts now under way which have the greatest 
potential to improve aviation safety and why? And then if Mr. 
Hall can comment on those?
    Ms. Garvey. Let me speak about FOQA, because I think the IG 
is absolutely right in saying that this is really the direction 
for the future.
    Mr. Wolf. That is Flight Operations and Quality Assurance?
    Ms. Garvey. That is correct. That is using the information 
that you get in the flight data recorder and identifying 
trends. We have such an extraordinary record that our hope for 
maintaining the extraordinary record that we have and raising 
the bar even further is identifying the trends. Historical data 
is very helpful, but it is identifying those trends in the 
future that is important.
    We have a policy in place, as Alexis said, and we opted to 
go to the policy because we were having difficulties getting 
the rule through many parts of the administration. It is a 
complex issue, and it affects other branches of government. 
Justice had some concern, not so much in aviation but concerns 
about other programs.
    We are still working that issue because I think, 
ultimately, what is best is a real rule. But in lieu of the 
rule, we said let's not wait. Let's get the policy in place, 
and we can test it out, and that may be helpful in the 
discussions with some of our colleagues in other parts of the 
government.
    So we have all of the major airlines in various stages of 
putting together a FOQA program. We had a pilot program in 
place, and we learned some very interesting things. We learned, 
for example, that the approaches to about a dozen airports in 
this country were such that they caused us concern. They raised 
a red flag. We made changes to the approaches to those 
airports. So that is the kind of thing in getting out ahead and 
identifying the trends. In my view, that is really the hope for 
the future. That is really the hope for maintaining a strong 
record.
    Mr. Hall may have some other programs.
    Mr. Hall. Mr. Chairman, we have identified in our testimony 
five issues on our most wanted list.
    Let me just highlight two quickly. One is, obviously, 
flight data recorders and the use of those recorders. The truth 
of the matter is there is no reason that American carriers 
shouldn't voluntarily share aircraft information. It is being 
done in other countries. They are concerned about liability 
issues. I think what they need to do is put safety ahead of 
their liability issues and work with the FAA in coming up with 
a FOQA program that will provide us with the type of safety net 
that is available with many of the foreign carriers now in 
terms of sharing information.
    The second issue that concerns me, obviously, is money. Any 
time you see the safety record go well, that is when people 
start looking to cut the safety program. You have effective 
safety in the transportation area because of oversight. It is a 
real challenge when you get the opportunity to work with OMB to 
try to keep safety programs adequately funded, because we can 
look at examples. All you have to do is look back at past 
accidents where we have taken our eye off the ball and made 
cuts in oversight and then ended up with an accident.
    Those are my one or two issues.

                         safety warning alerts

    Mr. Wolf. Ms. Garvey, investigations after the Valujet 
accident show that the agency missed several warning signs 
along the way. There was a disturbing article in the Wall 
Street Journal last July regarding engine failures of 
Continental's DC-9 jet fleet. According to the article, the in-
flight fire on September 6, 1997, was the sixth serious in-
flight failure with the same type of engine in 24 days. The 
FAA's acting Director of Flight Standards said in this article, 
``six engines failures in 24 days should have alerted them. 
We've had data for years, but we haven't had good 
information.'' What is the FAA doing to make sure that 
inspectors have good quality information on which they can take 
action, for instance in a case like this?
    Ms. Garvey. Mr. Chairman, we ask and we require, actually, 
Service Difficulty Reports, SDRs, information carriers are 
required to report that every 24 hours. In the case of 
Continental, they did that; and we got on top of it. I think 
some of the instances referred to occurred before the SDRs were 
in place. I will have to check on that. But I know that we have 
the SDRs now. They have to report it every 24 hours. Our folks 
should be looking at it and are looking at it. In that case, we 
were able to respond within that period on that particular 
issue.

                 dateline report on usair 427 accident

    Mr. Wolf. I think it was this morning on television, I 
think it was Jane Pauley was announcing something on Dateline. 
I just caught the end of it.
    Ms. Garvey. It is the USAir 427 accident. I think there is 
a report on the condition of them.
    Mr. Wolf. You are up to speed on that? You don't have to go 
into it here. I was going to ask you, can you tell me a little 
bit about it and let the committee know? You are going to watch 
it tonight?
    Ms. Garvey. Painfully, probably. Dateline, you are never 
really quite sure. Tom, are you up to speed?
    Mr. McSweeny. I did the interview.
    Ms. Garvey. Tom did the interview. I will be watching.
    Mr. Wolf. After tonight if you can give us a report on your 
comments about it, we would appreciate it.
    Again, it is a testing process, and I don't want to think 
that anything is left undone. Let me just say, if the public 
could see you privately, I get the sense you are definitely 
interested in this. So it is not just your public persona when 
you testify. I know that you care very deeply about it. So any 
time something comes up, whether it is valid or not, you have 
to look at it.
    Ms. Garvey. We have worked very closely with NTSB related 
to some of the investigations.

                           usair 427 accident

    Mr. Wolf. Mr. Hall, could you look at it or have somebody 
tape it and get back to the committee with your comments?
    Mr. Hall. On March 23 we will have our final Board meeting 
on the USAir 427 accident, and we were contacted by the program 
to comment. The Board policy is when we have an ongoing 
investigation that has been put on notation we don't comment. 
So I will certainly watch the program this evening.
    Mr. Wolf. If you can give us your comments after your date 
of March 24?
    Mr. Hall. Yes, sir.
    Mr. Wolf. Mr. Sabo.
    Mr. Sabo. When was the USAir 427?
    Mr. Hall. It was in September of 1994, Congressman Sabo. It 
is the longest investigation that the Board has ever 
undertaken. There have been two public hearings on the 
accident, and we will conclude our investigation with the final 
Board report on March 23.
    Mr. Sabo. Where was it?
    Mr. Hall. In Pittsburgh. It was the USAir accident which 
occurred in Pittsburgh, Pennsylvania, in September, 1994.
    Mr. Sabo. What kind of plane?
    Mr. Hall. 737-300.
    Ms. Garvey. I believe Mr. McSweeny went through what 
actions we have taken since that time to the aircraft. But 
knowing full well that the Board's presentation and the Board's 
discussion of it will be March 23, we will certainly be at 
that.
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                           operational errors

    Mr. Wolf. When the final numbers were in, operational 
errors among air traffic controllers were up significantly in 
1998. There were 898 such errors that year, an increase of 13.6 
percent over the previous year and the highest level in recent 
memory. What are your comments about that?
    Ms. Garvey. Well, this is an issue that we are very focused 
on. Part, by the way, I believe, although I don't think that it 
is a full explanation, is that we have much better reporting, 
and people are paying much better attention to it. So we have 
seen in the last year an increase, and that is something that 
we absolutely need to watch.
    Let me make a couple of points. Every one of them is 
investigated. Every one involves the controller in the 
investigation so that he or she has ample opportunity to take a 
look at the issue along with the managers. We have had some 
very good success stories in the last 6 months with a couple of 
places. Minneapolis, Seattle are two that I know; Cincinnati is 
another one, where there has been a problem in operational 
errors. Both NATCA, the union and the management team have 
gotten together at those facilities, taken a look at it and 
come up with an action plan and made some significant 
improvements. I believe Minneapolis and Seattle are now at an 
all-time low.
    What we think is important in operational errors is not 
only to look at it nationally, because it is important to look 
at the trends. We have a quality assurance team that does that, 
but even more importantly is to look facility by facility. It 
has got to be the union rep and the managers sitting down and 
taking a look at what is happening at our facility. Again, in 
those places where that has occurred, we are seeing 
improvements this year. And at other facilities we will be 
taking the same actions.

                    operational errors at cleveland

    Mr. Wolf. There was an article that in Cleveland they 
covered things up. What was that about?
    Ms. Garvey. I would have to look at that article. Cleveland 
turned out to be a very good success story in terms of runway 
incursions. I would have to look at that.
    Mr. Wolf. What was the one that was covered up not too long 
ago?
    Ms. Garvey. On operational errors, Mr. Chairman?
    Mr. Wolf. Three had not been reported up the chain.
    Mr. Belger. I don't recall the specifics of the article, 
but I am aware generally of what has happened, and partially 
that is the reason for the increase.
    What we found is that some of the procedures that are being 
used in the facility, very innocently, in terms of reviewing 
after an incident what should have been classified as an 
operational error, they were not classifying them as 
operational errors. That was not their fault. That was the 
fault of our procedures, if you will, in terms of what should 
have been classified as an operational error. And now, having 
fixed that, we are actually seeing an increase in some of the 
en route numbers.
    Mr. Wolf. So you have a higher standard?
    Mr. Belger. Yes, the criteria is clearer as to when we 
should report an operational error.

                          controller in charge

    Mr. Wolf. You are asking for $5 million to begin the 
transition of control to the new controller in charge which 
will phase out a number of supervisors.
    Ms. Garvey. Part of the NATCA agreement, because we focused 
a great deal on what would be some potential productivity 
gains, what would be some potential efficiencies, if you will, 
phased out the number of supervisors. Let me give you a bit of 
history. The FAA had looked at the issue of reduction of 
supervisors a number of years ago. In fact, the whole thrust in 
government, as you know, is NPR and other efforts to reduce the 
number of supervisors. I think NPR calls for a reduction of 12 
to one in the safety areas. We are being more conservative and 
saying 10 to one, and we believe that we can do it. We believe 
that, obviously, keeping safety very much as the focal point, 
we have talked about this issue with the IG as well, and it has 
to be done thoughtfully and deliberately, and it has to be done 
in a way that we are also able to train some of the controllers 
to take on some additional responsibility. This is occurring in 
some places already. So thoughtful, deliberate process.
    Our work groups are coming up with collateral duties as 
well as the issue of controller in charge, and it is involving 
the highest leadership from the unions as well as the highest 
management involvement as well. It is something that I have 
spent some time talking with Mr. Mead about as well.

                 midair collisions and pilot deviations

    Mr. Wolf. We will have a question for the record about 
midair collisions, the numbers and if more can be done to 
reduce them, and also on the issue of pilot deviations as well. 
We will submit those questions to you.

                           runway incursions

    Mr. Wolf. The runway incursions, of course, in Mr. Mead's 
report are up. Has there been any change since the chart that 
the Inspector General showed on runway incursions?
    Ms. Garvey. I would like to go back and look at that. I 
know in some areas in some specific facilities we have made 
some improvements, but I would like to provide for the record 
what the most recent numbers are.
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    Mr. Wolf. Mitre Corporation studied the problem in 1994 and 
1996 and concluded that many of the solutions required a low 
level of technology, were relatively inexpensive and easily 
implemented. But yet, as of 18 months ago, only one of the 10 
recommendations had been implemented. Where are you with that?
    Ms. Garvey. I think Mitre's recommendations were excellent, 
and that is as well as some of the recommendations from NTSB 
and the IG, part of the runway incursion plan. I expect that 
some of the simpler recommendations that Mitre talks about will 
come out of those 20 airport site reviews.
    Mr. Wolf. And you will be able to tell us what the nine 
others that haven't been----
    Ms. Garvey. Yes. And my sense is that is something that 
those airports will implement. We will have those site reviews 
this year and implemented, and I expect that most of them will 
be implemented during the upcoming year.

                     runway incursion technologies

    Mr. Wolf. The committee has funded several technologies to 
address runway incursions, including demonstrations of loop 
technology in Long Beach, California, and low-cost surface 
detection radar at Norfolk. Are you following up on these 
technologies? Are they effective or not effective?
    Ms. Garvey. The Norfolk one we think is very, very 
promising in particular. We are still doing some evaluations of 
them, but we are very encouraged by what we have seen, and we 
think that in the summer months into the fall are the final 
point of that. People are doing it carefully, but we are very 
encouraged by what we have seen.
    That is also true of the loop technology, although I don't 
think that is quite as far along in terms of evaluation as the 
Norfolk one.

              staffing for international safety activities

    Mr. Wolf. How many people do you have working on 
international safety activities full time?
    Ms. Garvey. Full time?
    Mr. Wolf. How many is that compared to 5 years and 10 years 
ago?
    Ms. Garvey. That is a question, unless someone has that, I 
think we would have to provide that for the record. I know that 
I have met with many of them.
    [The information follows:]

    Today there are 99 Aviation Safety Inspectors working on 
international safety full time. In 1995 there were 75; in 1990 
there were 41.

         reimbursement for international inspection activities

    Mr. Wolf. They said ``today the FAA does not have adequate 
funding to meet the many requests for inspectors to help 
foreign governments develop regulations and perform oversight 
functions. The FAA should increase its participation in 
international programs aimed at further developing aviation 
infrastructure and emergency regions in emergent regions of the 
world''. This is not exactly an analogy, but during Desert 
Storm those countries, Kuwait, Saudi Arabia, paid for a lot of 
the activity. Would it not behoove you to offer this on a 
reimbursable basis whereby the country involved would be 
reimbursing us?
    Ms. Garvey. I believe we do that in some cases, and perhaps 
we can do more.
    Mr. Wolf. How many countries reimburse us?
    Ms. Garvey. Do you know, Tom?
    Mr. McSweeny. A dozen or so.
    Mr. Wolf. And there are 140 countries in the world.
    I think it is good that we are helping with regard to that, 
but also to ask to be reimbursed.
    Ms. Garvey. One other point on that. I think it is also 
important and we have pushed very hard for ICAO to take a 
leadership role as well, and we intend to continue to do that. 
Any time that we can encourage ICAO, as we did a year ago, to 
really assume more of a leadership role, that is important. As 
they are doing with Y2K. So we are part of the solution, but we 
are not the entire solution.

                        foreign repair stations

    Mr. Wolf. There was an article in the November, 1997, Conde 
Nast Traveler and it said the following:
    ``There are now 488 foreign repair stations certified by 
the FAA to do work on U.S. aircraft. These facilities have 
become a booming business in the developing world in 
particular, offering the airlines lower wages and quicker 
turnaround time. The FAA's list includes Costa Rica, Peru, El 
Salvador, Guatemala, Indonesia, Kenya, Jamaica. There are no 
resident inspectors in any of these countries. Individual 
mechanics are not required to have agency certification, as 
their American counterparts are.''
    Should we be worried about this?
    Ms. Garvey. This issue is something that we had talked 
about in the administration and I think is in the final stages 
of a rulemaking to standardize--in many areas it works just 
fine. I think some of the areas that you have talked about we 
may have some concerns.
    What we have devised is a rule that sort of levels the 
playing field and creates the right kinds of standards so we 
don't have that kind of dual approach. So we do have a 
rulemaking. I believe it is in the final stages at OST or at 
OMB.
    Mr. Wolf. Particularly with Mr. Hall's comment about co-
sharing, it becomes even more critical.
    Mr. Hall. This is a concern that we have had, and one of 
the concerns is a budget concern that the travel for these 
folks has been--we have seen that being cut, and the 
international aspect of aviation we need to--we are going to 
have to be proactive and be out there. And as more and more of 
this work is offshore, be sure that it is being properly done.
    Mr. Wolf. Don't you think that we actually have to have 
inspectors go to the facility and look?
    Mr. Hall. Sure.
    Ms. Garvey. We have inspectors who go to the site. Do we 
have inspectors right on site? Not in all cases.

                    manufacturing facilities--china

    Mr. Wolf. If you can have somebody look into this, Mr. 
Flynn. The inspection program in China, we had people looking 
only at the records, and looking at the records of the Chinese 
government is like looking at--it just doesn't matter because 
they have lied on so many occasions. How do we inspect 
manufacturing and other facilities in China? Do we just look at 
their records or do we do more?
    And also for the manufacturing of Boeing, how much 
manufacturing does Boeing have taking place in China?
    Mr. Flynn. I would defer to the associate for regulation 
and certification, Mr. McSweeny.
    Mr. McSweeny. The manufacturing in China from Boeing is 
about five facilities, if I remember correctly.
    Mr. Wolf. What are you doing? What do we do?
    Mr. McSweeny. The parts produced in China are produced 
under Boeing's production certificate. That means Boeing is 
responsible for audits. And as part of our audit team of 
Boeing's system, we do visit China. We do audits of those 
facilities, and we also have spent a lot of our efforts under 
the reimbursables that you talked about before, doing training 
of the Chinese authorities. And when we do an audit in China, 
they are with us, so they are learning at the same time.
    Mr. Wolf. Maybe you can come by my office. Are you aware of 
the complaint that I am talking about, that they said there was 
some activity which was not appropriate taking place and that 
inspectors were just coming in and looking at the books, the 
paper, and not actually making the actual inspections?
    Mr. McSweeny. I am not personally aware of that, but I 
would love to become aware. I will be more than happy to come 
by your office.
    Mr. Wolf. If you could.
    Can you give the committee a list, Mr. McSweeny, for the 
record of where these repair facilities are located? And also 
how many times in the last 2 years, dates and times, an FAA 
inspector visited the site?
    Mr. McSweeny. Yes. Let me make it clear that I thought you 
were asking the question about manufacturers. My response----
    Mr. Wolf. I want them both.
    Mr. McSweeny. I can do both.
    [The information follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                        foreign repair stations

    Mr. Wolf. But also the list of where the repair 
facilities--this said there are 488 foreign repair stations. 
How many of these 488 do you think, roughly, would service 
American aircraft?
    Mr. McSweeny. I can get it for the record, because I don't 
know it off the top of my head.
    [The information follows:]

    All of the 488 foreign repair stations service U.S.-
registered aircraft. In 14 CFR 145.71, the Federal Aviation 
Regulations requires that ``a repair station certificate with 
appropriate ratings may be issued for a foreign repair station 
if the Administrator determines that it will be necessary for 
maintaining or altering U.S.-registered aircraft and aircraft 
engines, propellers, appliances and component parts thereof for 
use on U.S.-registered aircraft * * *.''

                     hazardous materials incidents

    Mr. Wolf. I just have two more questions, and then Mr. Sabo 
can ask questions.
    Ms. Garvey, since the Valujet accident, there has been more 
attention and more resources applied to enforcement of the 
hazardous material regulations. Is the number of hazardous 
material incidents on the rise, declining, or staying level?
    Ms. Garvey. I am not sure about the numbers. Mr. Flynn 
knows the answer to that.
    Mr. Flynn. The number of incidents, a spill of hazardous 
material that happens while the material is in air 
transportation, usually happens on the ground. It happens in 
sort facilities, but that number is up. It was up 25 percent 
last year from 1,000 last year, to 1,250 incidents of hazardous 
material. As Chairman Hall pointed out, the quantity of 
hazardous materials that is being shipped is increasing fairly 
rapidly.
    Mr. Wolf. What do you suggest--or, Mr. Hall, what do you 
suggest? Do you think FAA is doing everything that they should 
in light of this number being up and Valujet? What are your 
thoughts?
    Mr. Hall. Mr. Chairman, I would be interested in FAA 
keeping an emphasis on this area. As you know, again, this goes 
to having a sufficient number of personnel to provide the 
oversight and the checks, and I think it is very important that 
this is a growth that is taking place in all modes of 
transportation. More and more hazardous materials, more and 
more dangerous goods are being transported. They can be 
transported very safely.
    I think it is very important that we keep the oversight in 
place. I am pleased with FAA's emphasis on this area since the 
Valujet accident. All of us need to work together on safety so, 
when we see a trend, we can look at the matter and see if there 
are other ways that it needs to be addressed. I think Irish is 
aware of it, and if they keep the emphasis on it, hopefully, we 
will be able to push the items back down.
    Mr. Wolf. What kinds of materials?
    Mr. Flynn. It involves solvents, oxidizers, propellants. I 
don't mean necessarily explosives, but some of those, too. 
Ammunition. It runs a gamut from highly flammable substances 
that are used in cosmetics, for example. One of the things that 
we want to do is to isolate the ones that are happening most 
frequently and get to the sources of them. The incidents happen 
almost universally in undeclared HAZMAT. The air carriers and 
FedEx and others know very well and have excellent programs for 
dealing with declared HAZMAT that is properly declared, 
properly packaged and marked. It is shippers who are not 
declaring it who are creating the danger. And we want to--when 
people are deliberately doing that, we want--criminal sanctions 
are called for.
    Mr. Wolf. Are there criminal penalties now?
    Mr. Flynn. Indeed.
    Mr. Wolf. Has anyone been prosecuted?
    Mr. Flynn. Yes, and people have gone to jail for years; and 
very, very substantial fines have happened on the criminal 
side. There are also very heavy civil penalties.
    Mr. Wolf. Mr. Sabo.

                        foreign repair stations

    Mr. Sabo. Thank you, Mr. Chairman.
    I am curious about what the definition of a foreign repair 
station is. I assume there is a U.S. plane in airport X in 
another country and they have some mechanical problems, 
somebody has to be able to repair it. Is that a foreign repair 
station if they are okayed to do those kind of repairs?
    Mr. McSweeny. I would classify in general terms a foreign 
repair station as a U.S.-approved repair station on foreign 
soil. When a U.S. air carrier needs a repair, that work must be 
done, because they are a U.S. air carrier, by a U.S. FAA-
approved repair station.
    Mr. Sabo. How many of these stations are those who take 
care of repairs because there is a problem with the plane that 
happens to be on an international route versus--I assume that 
there are some where the carriers are taking planes to do 
scheduled maintenance, scheduled repair work? Am I right in 
drawing that distinction?
    Mr. McSweeny. Both occur, yes.
    Mr. Sabo. How many of the 488 handle problems for somebody 
on a regular route versus where planes are taken?
    Mr. McSweeny. I would have to provide that for the record. 
I don't have it off the top of my head.
    [The information follows:]

    The information regarding how much scheduled versus on-
demand work is done at certificated foreign repair stations is 
not available. There is no requirement for repair stations to 
report this kind of information to the FAA.

    Mr. Sabo. Is there a distinction in how we deal with those 
two types of----
    Mr. McSweeny. No, there is not.
    Mr. Sabo. Should there be?
    Mr. McSweeny. The key to the foreign approval of the 
foreign repair stations being FAA approved is whether they are 
doing normal maintenance or whether they are doing 
modifications, alterations and things like that that a U.S. 
repair station is authorized to do. We have procedures to 
appropriately monitor both types of activities. So we would 
monitor them overseas just like we would monitor them in the 
United States.
    Mr. Sabo. I would assume that an airline would need to have 
at every potential stop somebody certified to take care of 
something that might have happened to the airplane so they 
could fly it back or whatever?
    Mr. McSweeny. That is correct.
    Mr. Sabo. And I would assume that would be the bulk of the 
488?
    Mr. McSweeny. I would guess that it probably is, but I 
would rather provide that.
    Mr. Sabo. Would you provide the distinctions between the 
two and any other distinctions you might make in the regulatory 
process?
    [The information follows:]

    There are no distinctions between the two. The 
certification process for a foreign repair station is based on 
the work and capabilities of what the repair station can do. 
Ratings are established during the certification process, which 
consist of tooling documentation and personnel.

    Mr. Sabo. Thank you.

                            Closing Remarks

    Mr. Wolf. Thank you. In closing, two comments.
    One, I hope that we can get the responses that we talked 
about to your comments taking apart the IG's statement and 
taking apart Mr. Hall's, and then your comments with regard to 
yours, and if we can get that in in 2 weeks, if we can have 
that by maybe 2 weeks from Friday, that would be helpful.
    Secondly, I would urge that as we go through the budget 
process, and I know that Mr. Sabo agrees, if there is something 
compelling with regard to safety--Mr. Sabo and I have seen eye 
to eye on all of these issues. If there is something that you 
believe is absolutely, positively compelling with regard to 
safety and funding it, I hope that you will call us or come by 
and see us and just make sure that we know. Because neither of 
us want to do anything that we are not cooperative or that 
could help you on something that is very, very important for 
safety. Safety is the number one goal of this committee. So 
come in at any time.
    Ms. Garvey. Thank you, Mr. Chairman.
    Mr. Wolf. I thank all of you for your testimony.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


                           W I T N E S S E S

                              ----------                              
                                                                   Page
Baker, R.W.......................................................   107
Basso, Peter ``Jack'', Jr........................................ 1, 73
Belger, M.R...................................................... 1, 73
Dillingham, Gerald...............................................     1
Fearnsides, Jack.................................................   107
Flynn, C.L.......................................................   195
Garvey, J.F.............................................1, 73, 107, 195
Hall, Jim........................................................   195
Irving, S.J......................................................     1
Mead, K.M........................................................1, 107
Poling, S.A......................................................     1
Stefani, A.M.....................................................1, 195


                               I N D E X

                              ------------


   Federal Aviation Administration (Includes Hearings on Air Traffic 
  Control Modernization; Aviation Financing; and Aviation Safety and 
                               Security)

                                                                   Page
$1.5 Billion In New User Fees..................................715, 925
Access Control.......................................198, 226, 343, 687
    Violations...................................................   228
Accident and Fatality Rates...............................539, 553, 555
Acquisition:
    Creative Procurement Initiatives.............................   916
    Long-Term...................................................87, 646
    Major Programs........................................611, 613, 779
    Management..................................................63, 190
Adequate, Stable, and Reliable Funding for FAA..............90, 92, 380
Administration.................................................697, 700
Administration of Airports.......................................   691
Administrative Services Franchise Fund....................648, 735, 738
Advanced Technology Development and Prototyping..................   786
Advisory Committees..............................................   559
Aeronautical Charting..........................................605, 607
Air Carrier Oversight............................................   251
Air Traffic......................................................   179
    Contract Towers..............................................   583
    Contract Tower Cost Sharing Program..........................   568
    Controller In Charge.........................................   359
    CWF--Employment Data.............................571, 573, 576, 579
    CWF Pay Agreement.....................................102, 563, 564
    CWF Productivity.............................................   610
    CWF Training Contract......................................608, 933
    CWF Training................................................89, 609
    PATCO Rehires................................................   569
    Overtime.....................................................   565
Aircraft Boarding................................................   228
Airline Employee Injuries........................................   330
Airline Safety Records...........................................   339
Airlines Low Compliance With Air Courier Regulations.............   378
Airport and Airway Trust Fund....................................   386
    1996 Excess Revenue Transfer.................................   392
    Balance......................................................    90
    Interest.....................................................    96
    Original Purpose.............................................    42
    Revenues.....................................................   392
    Revenues and Outlays.........................................   388
    Shortfall....................................................    17
    Uncommitted Balances.........................................   390
    Use of Revenue for Non-aviation Purposes.....................    86
Airport Improvement Program (AIP).........................889, 892, 914
    Airport Funding..............................................   923
    Funding Levels...............................................    94
Airport Security-Bag Screener Proficiency........................   370
Airspace Redesign................................................   451
AMASS............................................................   814
    Commissionings...............................................   658
American Airlines................................................   109
    Biography of R.W. Baker, Executive VP of Operations..........   119
    Opening Statement............................................   109
Annual Leave.....................................................   488
ASDE-3 Commissionings............................................   657
ASR-11 Radar.....................................................   874
Assessments By Fiscal Year.....................................471, 475
ATC Beacon Interrogator Replacement............................794, 796
Aviation Medical Staffing........................................   683
Aviation Safety................................................238, 249
Aviation Safety Program........................................345, 661
Aviation Statistics..............................................   275
Aviation Weather:
    Research...................................................191, 877
    Training Initiatives.........................................   660
Bag Match......................................................231, 233
    Domestic.....................................................   197
    International Passenger's....................................   196
Baggage Security Requirements....................................   248
Budget and Staffing Plan for Fiscal Year 1999....................   443
Budget:
    Requests To OST and OMB......................................   475
    Structure....................................................     3
Building Management Activity.....................................   696
Capacity:
    Enhancement Programs..................................109, 797, 799
    Problems.....................................................    71
Capital:
    Balance Between Capital and Operating Funds..................    85
    Funding Adequacy.............................................    93
    Investment Plan..............................................   771
    Leasing....................................................772, 774
    Modernization Program........................................   108
Cargo Security...................................................   377
Carry-On Baggage.................................................   230
Center for Management Development................................   732
Checked Baggage Compliance Testing...............................   224
Civil Aeromedical Institute (CAMI)...............................   883
Civil Aviation Security Statistics...............................   686
Civil Service Retirement Pension, Average Annual.................   438
Closing Remarks:
    Chairman Wolf..............................................199, 369
Code Sharing:
    Alliances....................................................   163
Collegiate Training Initiatives..................................   730
Collision Avoidance:
    Rulemaking...................................................   333
    Systems......................................................   276
Commercial Space Transportation................................696, 739
Commissioned Facilities..........................................   653
Compensations and Benefits Costs.................................   562
Comptroller General Decision 33 CG 206...........................   709
Computer-Assisted Passenger Screening............................   197
Contract Maintenance...........................................650, 652
Contract Negotiations............................................   102
Contract Towers..................................................   583
    Cost Sharing Program.........................................   568
    Operational Errors...........................................   583
Control of Access To Secure Areas................................   198
Controller.......................................................   179
    CWF--Employment Data.............................571, 583, 576, 579
    In Charge....................................................   359
    Pay Agreement..............................................563, 564
    PATCO Rehires................................................   569
    Productivity.................................................   610
    Training....................................................89, 609
    Training Contract..........................................608, 933
Cost Accounting System........................38, 74, 95, 381, 383, 385
Cost Control.................................................61, 72, 96
    Operations...................................................    62
    Pay..........................................................   101
CTX Machine Operators Training...................................   373
CWF..............................................................   179
    Employment Data..................................571, 573, 576, 579
    In Charge....................................................   359
    Pay Agreement..............................................563, 564
    Productivity.................................................   610
    Training....................................................89, 609
    Training Contract..........................................608, 933
Dangerous Goods/Cargo Security Staffing..........................   688
Data Link Program................................................   182
Dateline Report On USAIR 427 Accident............................   346
Deferred Maintenance...........................................613, 646
Delay Reduction Goal...........................................607, 608
Depot Spares.....................................................   649
Disability Service Center........................................   718
Discretionary Spending Caps......................................    35
Discrimination...................................................   105
Display System Replacement (DSR)...............................848, 850
Domestic Bag Match...............................................   197
Domestic Check Baggage Security..................................   197
Eastern Region Headquarters......................................   662
Employee Separations.............................................   497
English Language Proficiency.....................................   757
Essential Air Services.........................................717, 767
Eunomia..........................................................   850
Explosive Detection System (EDS).....................232, 233, 236, 374
    Equipment....................................................   342
    Screening....................................................   198
    Utilization................................................221, 222
Facilities & Equipment (F&E):
    Approved F&E Cost and Schedule Baselines.....................   774
    Engineering Development......................................   785
    Obligations and Unobligated Balance..........................   782
    Outlays......................................................   780
    Reimbursables................................................   785
    Top Priorities...............................................   791
    Unobligated Balance..........................................   784
Financial Management Accountability..............................    18
FAA Financing:
    Proposals....................................................    17
    Trust Fund Spending..........................................    70
FAA Integrated Communications Systems for the 21st Century.......   869
FAA Leadership In Aviation Safety................................   927
FAA Reorganization...............................................   100
FAA Response:
    To Air Carrier Compliance With Cargo Security................   379
    To NTSB Recommendations......................................   325
    To OIG/NTSB Testimony........................................   296
    To the Inspector General's Comments on FAA's Testimony.......   311
    To the Inspector General's Testimony.........................   297
    To the National Transportation Safety Board Testimony........   315
Telecommunications Infrastructure................................   819
Fatigue Countermeasures..........................................   884
Field Maintenance--``Other Objects'' Costs.......................   652
Financial Baseline Control Notices...............................   796
Financial Statement Claims and Judgments.........................   774
Firewalls Effect.....................................36, 41, 84, 86, 96
Flight Operations Quality Assurance Program......................   251
Flight Recorders.................................................   275
Flight Service Station Modernization.............................   846
Flight Turbulence Accidents and Incidents........................   327
FOB 10B Utilization of Requested Amount........................693, 695
Foreign:
    Accident Investigations......................................   276
    Carrier Accidents............................................   337
    Repair Stations.......................................362, 367, 368
Free Flight....................................................111, 166
    Phase I.....................................108, 186, 766, 799, 801
    Software Development.........................................   165
Funding Adequacy.................................................    90
Funding Needed To Resolve ATC Capacity Problems..................    62
Funding Stability...............................................92, 380
FY 1998 Direct Obligations.......................................   499
FY 1999 Operations:
    Budget Shortfall.............................................   343
    Funding......................................................   167
FY 2000 FAA Budget Request.......................................   179
GAO Opening Statement............................................     2
General Aviations Instruments Operations.........................   529
General Fund:
    Share of Operations..........................................    37
    Subsidy......................................................60, 84
    Support......................................................    85
Global Implementation of Safety Improvements.....................   926
Global Positioning System (GPS)..................................   112
    Future Spending Requirements for GPS.........................   810
    O&M Costs for ``Sole Means'' GPS.............................   859
    Risk Assessment Study........................................   921
GSA Rent.........................................................   447
Hazardous Materials Incidents....................................   367
Health Benefits..................................................   495
HOST and Oceanic Computer System Replacement (HOCSR)...........930, 932
HOST Replacement...............................................851, 853
Hub Airports.....................................................   192
Human Capital Management Program.................................   692
Human Factors....................................................   166
    In Acquisition Programs......................................   848
    Research...................................................192, 882
Human Resource Management Positions..............................   723
Industry Response To Baggage Screening Personnel Turnover........   372
Information Security.............................................   453
Inspections......................................................   181
    Reimbursement for International Inspection Activities........   361
Inspector General (OIG):
    Comments on FAA's Statement..................................   309
    Financial Audit Improvements.................................   714
    Opening Remarks..............................................   248
    Opening Statement...........................................17, 121
    Response to FAA's Comments on Inspector General Statement....   306
Inspector Training...............................................   663
Instrument Landing Systems......................854, 858, 861, 916, 920
Integrated Personnel and Payroll System (IPPS)...................   712
International Passenger Bag Match................................   196
Introduction of Witnesses........................................     2
Leased Telecommunications........................................   659
Leave:
    Annual.......................................................   488
    Sick.......................................................490, 492
Letters of Intent (LOI's).................................893, 896, 915
Local Area Augmentation System...................................   809
Logistic Center..................................................   646
Long-Term Acquisition............................................    87
Loop Detection Technology........................................   793
Maintenance.....................................611, 613, 646, 650, 652
Major Acquisitions Programs......................................   779
Major Safety Programs............................................   345
Manufacturing Facilities--China..................................   363
Midair Collisions and Pilot Deviations...........................   359
Mid-America Aviation Resource Consortium (MARC).................90, 731
Military Airport Program.........................................   891
Mitre/CAASD......................................................   875
Modernization....................................................   932
    Adequacy of Funding.........................................60, 180
    Funding......................................................    38
    Most Important Programs......................................   765
    Panel........................................................   107
    Waste........................................................63, 65
Most Critical Airline Issues.....................................   168
Most Wanted Safety Issues........................................   325
NATCA:
    Agreement Cost Offsets.......................................   564
    Contract.....................................................   102
    Representation...............................................   609
National Airspace System (NAS):
    Improvements.................................................   112
    NAS Architecture.............................................   165
    NAS Handoff Funding..........................................   769
National and Dulles Airport......................................   102
National Transportation Safety Board (NTSB):
    Comments on FAA's Comments on NTSB Testimony.................   321
    Comments on FAA's Statement..................................   313
    Opening Remarks..............................................   275
    Recommendations..............................................   325
Near Mid-Air Collisions..........................................   602
New Austin Airport...............................................   870
New Policy Proposals.............................................   928
New Programs.....................................................   767
Next Generation:
    Communication................................................   790
    Navigation Systems...........................................   854
NIMS...........................................................871, 874
Norfolk Phased Array ASDE Radar..................................   792
Number of Trust and Special Funds................................    34
OASIS Program..................................................187, 846
Oceanic Automation System......................................787, 789
Off-Budget--GAO's Position.......................................    34
Office Business Information & Consultation.......................   702
Office of Administrator and Deputy Administrator Positions.......   762
Office of Financial Services...................................702, 707
Office of Policy, Planning and International Aviation Positions..   748
Office of Public Affairs.........................................   722
Office of Safety Assessment......................................   344
Office of System Safety Positions................................   764
Office of The Chief Counsel (AGC)..............................719, 721
Onboard Staffing.................................................   440
Opening Remarks/Statements:
    Chairman Wolf................................................1, 195
    FAA...............................................73, 107, 195, 237
    General Accounting Office....................................     2
    Inspector General............................................   248
    National Transportation Safety Board.........................   275
    Panel Two....................................................    73
    WAAS and Mitre Corporation...................................   169
Operational Errors..............................358, 589, 591, 593, 598
    At Cleveland.................................................   358
    Contract Towers..............................................   583
Operations:
    Assessments By Fiscal Year.................................471, 475
    Budget Request Savings.......................................    97
    FAA Operations Cost..........................................    18
    Other Services.............................................479, 482
    Positions....................................................   502
    Positions and Employment Summary.............................   522
    Shortfall....................................................   393
    Travel and Transportation Costs..............................   453
Overflight Fees..................................................   717
Overseas Offices.................................................   428
Overseas Personnel...............................................   420
Overtime--Air Traffic............................................   565
PATCO Rehires....................................................   569
Payroll Costs....................................................   495
Personnel and Related Expenses...................................   876
Personnel Recruitment............................................    89
Personnel Reform.......................................20, 87, 693, 729
PFC Collections..................................................   914
Piggybacking.....................................................   231
Pilot Deviations.................................................   603
Policy Studies...................................................   759
Potomac TRACON...................................................   817
Preboard Screening...............................................   229
Precision Approach Location System (PALS)........................   816
Priority Rulemaking Projects Mapped to Agency Drivers............   665
Procurement:
    Creative Initiatives.........................................   916
    Long-Term Acquisitions......................................87, 646
    Major Acquisition Programs............................611, 613, 779
    Acquisition Management......................................63, 190
Profiling........................................................   236
Programmatic Savings...........................................448, 450
R.W. Baker's Biography, American Airlines Executive VP of 
  Operations.....................................................   119
Raytheon Pulse ASDE Radar........................................   793
Red Team Security Testing........................................   686
Regional Consolidation/Restructuring...........................100, 449
Regional Offices Resources and Staffing..........................   733
Regulation and Certification Hiring..............................   683
Reimbursables--Facilities and Equipment..........................   785
Reimbursement for International Inspection Activities............   361
Relocation Contract..............................................   435
Repair, Maintenance, and Inspection of Buildings.................   482
Replacement of Accounting System.................................   712
Research and Acquisitions Staffing...............................   695
Retirements......................................................    88
Risk Mitigation..................................................   860
Rulemaking Budget................................................   663
Runway Incursions.....................238, 249, 251, 332, 359, 584, 589
    Selected Airports............................................   326
    Technologies..........................................361, 810, 812
Runway Pavement Conditions.......................................   894
Safe Flight 21 Program Funding Profile...........................   885
Safety Warning Alerts............................................   346
Safety-Equipment and Personnel...................................   331
Satellite Navigation...........................................805, 807
Schedule for Baselining Remaining Programs.......................   779
Screening Companies:
    Certification of.............................................   732
    Certified Companies..........................................   684
Seat Belts In-Flight.............................................   327
    Regulation...................................................   330
    Requirement..................................................   330
Security:
    Access Control...................................198, 226, 343, 687
    Action Plans.................................................   343
    Bag Match........................................196, 197, 231, 233
    Bag Screener Proficiency.....................................   370
    Baggage Security Requirements................................   248
    Briefing on Security Test....................................   200
    Cargo Security...............................................   377
    Carry-On Baggage.............................................   230
    Checked Bag Compliance Testing...............................   224
    Computer-Assisted Passenger Screening........................   197
    Control of Access To Secure Areas............................   198
    CTX Machine Operators Training...............................   373
    Dangerous Goods/Cargo Security Staffing......................   688
    Explosive Detection System (E198, 221, 222, 232, 233, 236, 342, 374
    Investment...................................................   237
    Presentation.................................................   195
    Preboard Screening...........................................   229
    Profiling....................................................   230
    Red Team Security Testing....................................   686
    Screeners..................................................341, 342
    Screening Companies........................................372, 684
    Small Package Security Procedures............................   199
    Statistics...................................................   686
    Universal Access System......................................   687
    Vulnerability Assessments....................................   690
SES:
    Bonus Awards...............................................516, 521
    Unfilled Positions...........................................   521
Shift Rotation Practices.........................................   885
Sick Leave.....................................................490, 492
Small Package Security Procedures................................   199
Socrates.......................................................879, 881
Special:
    Funds........................................................    35
    Pay..............................................483, 484, 487, 492
Staff Years......................................................   445
Staffing:
    Administration...............................................   700
    Aviation Medical.............................................   683
    Budget and Staffing Plan for FY 1999.........................   443
    Dangerous Good/Cargo Security................................   688
    Commercial Space Positions...................................   739
    Employee Separations.........................................   497
    Expanded Internal Security...................................   688
    FAA..........................................................   444
    FAA Executive Positions......................................   508
    Franchise Fund...............................................   738
    Human Resource Management Positions..........................   723
    Information Security.........................................   689
    International Safety Activities..............................   361
    Maintenance................................................611, 613
    Office of Administrator and Deputy Administrator Positions...   762
    Office of Business Information and Consultation..............   702
    Office of Financial Services...............................702, 707
    Office of Policy, Planning and International Aviation 
      Positions..................................................   748
    Office of Public Affairs Positions...........................   732
    Office of System Safety Positions............................   764
    Onboard......................................................   440
    Operations.................................................502, 522
    Overseas Personnel...........................................   420
    Positions..................................................502, 522
    Regional Offices.............................................   733
    Regulation and Certification Hiring..........................   683
    Research and Acquisitions Positions..........................   695
Standard Terminal Automation Replacement System (STARS)..........    68
                                           177, 182, 186, 840, 842, 844
Sunday Premium Pay...............................................   492
Supply Support Increase..........................................   649
Support Programs.................................................   771
Synthetic Vision Research........................................   887
System Delays....................................................   110
TCAS.............................................................   923
Terminal Doppler Weather Radar (TDWR)--New York City...........185, 581
Terminal Voice Switch Replacement................................   839
Tower Replacements........................................819, 824, 838
Training Needs...................................................   179
Transit Subsidy Benefit Program..................................   470
Transponder Landing Systems......................................   808
Transportation Administration Service Center.....................   447
Transportation Trust Funds.......................................     4
Travel:
    Operations Travel and Transportation Cost....................   453
    Non-Routine Overseas Travel..................................   458
Trust Fund.......................................................   386
    1996 Excess Revenue Transfer.................................   392
    Interest.....................................................    96
    Balance......................................................    90
    Original Purpose.............................................    42
    Revenues.....................................................   392
    Revenues and Outlays.........................................   388
    Shortfall....................................................    17
    Transportation Trust Funds...................................     4
    Uncommitted Balances.........................................   390
    Use of Trust Fund Revenues for Non-Aviation Purposes.........    86
Turbulence Accidents and Incidents.............................603, 605
Union Time.......................................................   580
Universal Access System..........................................   687
Unobligated Balance--Facilities and Equipment....................   784
Upgrades or Replacement for IPPS and DAFIS.......................   714
USAIR 427 Accident...............................................   347
    Dateline Report..............................................   346
Use of Trust Fund Revenues for Non-Aviation Purposes.............    86
User Fees...............................................20, 41, 86, 493
    $1.5 Billion in New User Fees..............................715, 925
    Overflight Fees..............................................   717
    Oversight....................................................    92
    Proposal.................................................74, 93, 95
Vote for Closed Session On Security..............................    19
Vulnerability Assessments........................................   690
WAAS and Mitre Corporation Opening Statement.....................   169
Warehoused Equipment...........................................861, 863
Waste In Modernization Program...................................63, 65
Weather:
    Aviation Weather Research..................................191, 877
    Training Initiatives.........................................   660
Wide Area Augmentation System....................................   805
Wilkes-Barre/Scranton Airport....................................   895
Within Grade and Grade To Grade Increases........................   493
Workers' Compensation..........................................436, 438
Workload Indicators..............................................   526
Workload Measures and Industry Trends................531, 532, 535, 537
Year 2000 (Y2K):
    Date Change Problem.....................................40, 90, 162
    Expenses--FY 1999............................................   445
    Monthly Progress Report......................................   863
    Remediation..................................................   869
    Compliance...................................................   338
    Impact.......................................................   188
    Problem......................................................   104
    International Compliance.....................................   163

   National Transportation Safety Board (Does not include hearing on 
   Aviation Safety and Security--see Federal Aviation Administration 
                                 index)

Accident Reports.............................................1048, 1049
Administrative Law Judge Cases...................................  1058
Authorized Funding Levels........................................  1058
Aviation:
    Land and Hold Short Operations...........................1042, 1043
    Midair Collisions............................................  1043
    Runway Incursions........................................1040, 1041
    TWA 800 Accident Investigation...........................1028, 1029
    TWA 800 Wreckage..........................................1030-1033
Board Member Terms...............................................  1016
Budget Request--OMB..............................................   948
    Supplemental..............................................1023-1026
Conferences and Seminars........................................985-988
Emergency Fund...................................................  1028
Fatalities....................................................1044-1047
Financial Management System...............................956, 957, 958
Highway:
    Transit Bus Safety........................................1034-1039
Investigative Costs Report.......................................  1027
Marine:
    Boat Safety..................................................  1065
    Emergency Response.......................................1066, 1067
    Personal Watercraft.......................................1059-1064
Most Wanted...............................................939, 940, 941
Other Services...................................................   954
Investigations/Studies:
    Pending...................................................1050-1055
    Completed.................................................1055-1057
Personnel Benefits & Pay Compensation............................   953
Political Appointees..........................................1018-1020
Rand Study....................................................1020-1022
Restructured Resources...........................................   947
Safety Recommendations..........................942, 943, 944, 945, 946
Safety Studies............................................935, 936, 937
SES Employees....................................................  1017
Staffing......................................................1000-1016
Supplemental Appropriations...................................1023-1026
Training........................................................988-999
    Training of Foreign Nationals................................  1000
Travel..........................................................958-985
    International Travel.........................................   985
User Fees......................................................954, 955

 Office of Inspector General (Includes Hearings on Air Traffic Control 
  Modernization; Aviation Financing; and Aviation Safety and Security)

Air Traffic Control Modernization Hearing:
    Air Traffic Control Modernization: IG's Prepared Statement...   124
    Airport Movement Area Safety System (AMASS)................134, 157
    Common Problems in FAA Acquisitions:
        Attention needed for programs in early-stage development.   132
        Intensive software development.........................125, 130
        Unrealistic schedules..................................125, 132
    Cost Overruns................................................   177
    Cost to Sustain Existing Radio Navigation Structure..........   129
    Data Link........................................122, 133, 153, 155
    Direct Access Radar Channel (DARC)...........................   151
    Display System Replacement (DSR) Costs and History...........   129
    Display System Replacement (DSR) Progress....................   121
    DOD and STARS................................................   121
    FAA Operations Cuts..........................................   168
    FAA Risk Management..........................................   150
    FAA Schedules................................................   122
    FAA-Inspector General Professional Relationship..............   121
    Free Flight...........................................122, 133, 152
    Free Flight Phase One Core Capabilities......................   161
    HOST:
        Progress..........................................121, 122, 148
        Replacement Costs and History............................   129
    Hubs and Airline Competition.................................   193
    Human Factors:
        and Data Link............................................   155
            Dual Systems.........................................   156
            ``Head-Down'' Time...................................   156
            Loss of ``Party Line''...............................   156
        and STARS................................................   122
    Human Factors, general.....................................125, 131
    Local Area Augmentation System (LAAS)........................   128
    Off-the-Shelf Software Systems...............................   177
    Personnel Rules/Increased FAA Funding........................   121
    Professional Airways Systems Specialists (PASS) Union........   151
    Runway Incursions............................................   123
    STARS:
        Continuing Difficulties..................................   136
        Cost in Brief............................................   121
        Cost in Detail...........................................   126
    Status of FAA Year-2000 computer repairs.....................   123
    Table: Free Flight Phase One Core Capabilities...............   161
    WAAS:
        Backup System for........................................   121
        Cost, Schedule.........................................121, 143
        And Global Positioning System............................   128
        Johns Hopkins Study......................................   121
    Year-2000 Issues and International Aviation..................   189
Aviation Financing:
    Air-Traffic Control Towers...................................    62
    Air-Traffic Controller Labor Agreement.......................    62
    Aviation Trust Fund:
        Guaranteeing FAA Revenue from............................    17
        Shortfall................................................17, 70
        Uncommitted Carry-Over Balance...........................    17
    FAA:
        Advanced Automation Program..............................    67
        And Year-2000 Readiness..................................    40
        Budget Increase, FY 1998-1999............................    17
        Budget...................................................    17
        Budgetary Competition with Amtrak, Coast Guard...........    17
        ``Clean Audit Opinion''..................................    39
        Cost-Accounting......................................20, 32, 39
        Creating Budgetary Firewalls.............................    17
        Financial Management.................................18, 30, 61
        Financing Proposals......................................    17
        Guaranteed Revenue from Aviation Trust Fund..........17, 60, 70
        Operations Cost-Competition with Acquisitions............    27
        Operations Costs.....................................18, 26, 72
        Payroll Costs............................................18, 26
        Personnel Reform.........................................20, 32
        Shielding from Discretionary Spending Caps...............    17
        STARS cost estimates.....................................    61
        Terminated CIP Projects..................................    67
        User Fees................................................18, 25
        WAAS Cost Increases......................................    62
        Waste in.................................................    65
    Free Flight Phase One........................................    71
    Human Factors and STARS......................................    68
    National Airspace Modernization Task Force...................    71
    Passenger Facility Charges...................................18, 25
    Software-Intensiveness of Acquisitions.......................    64
    Standard Terminal Automation Replacement System (STARS)......61, 68
    Ticket Taxes.................................................    18
    TRACON Consolidation.........................................    63
    Wide-Area Augmentation System (WAAS).........................    62
Aviation Safety and Security:
    Access Control.........................226, 248, 255, 260, 272, 343
    Air Transport Oversight System (ATOS)........................   251
    Air-Carrier Oversight........................................   251
    Aircraft Boarding............................................   228
    Air-Tour Industry............................................   252
    Checked-Baggage Compliance Testing...............224, 248, 255, 258
    Computer-Assisted Passenger Screening (CAPS).................   374
    Crash of TWA Flight 800 in 1996..............................   262
    Explosives-Detection Systems (EDS):
        Bar Chart, EDS Utilization per day, 1998.................   256
        Bar Chart, EDS Utilization per week, 1998................   257
        Equipment Usage....................222, 234, 255, 266, 374, 375
        Passenger Profiling and..................................   269
        Staff Training on............................234, 370, 371, 373
        Table, CTX 5000 Usage, 4th Quarter 1998..................   258
        Table, EDS Utilization...................................   221
    FAA Budget Request for Aviation Safety.......................   249
    FAA Budget Request for Aviation Security.....................   248
    Flight Operations Quality-Assurance Program..................   251
    Gore Commission............................................372, 377
    Human Element...............................228, 249, 259, 270, 331
    Inspector General Opening Remarks............................   248
    Positive Passenger Bag-Match Requirements....................   271
    Prepared Statement of Alexis Stefani.........................   253
    Proposed Cuts for Aviation Certification.....................   344
    Questions for the Record from Chairman Wolf:
        Adequacy of EDS Usage....................................   375
        Airport Security/Bag Screener Proficiency................   370
        Cargo Security...........................................   377
        Causes of Increase in EDS Usage..........................   374
        CTX False-Alarm Rates....................................   376
        FAA Response to Airline Compliance with Air-Courier 
          Regulations............................................   379
        Industry Response to Personnel Turnover..................   372
        Low Airline Compliance with Air-Courier Regulations......   378
        Numbers of Certified Screening Firms.....................   372
        Screener Certification Standards.........................   371
        Sufficiency of CTX Operator Training.....................   373
    Runway Incursions:
        Overview...............................................249, 251
        Table, Incursions 1993-1998..............................   250
    Screener Proficiency Evaluation and Reporting System (SPEARS)   370
    Table, Funding Allocations for Detection Equipment, FY 1997-
      99.........................................................   265
    Threat-Image Projection......................................   370

                                
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