[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]


                REVIEW OF AIR TRAFFIC CONTROL REFORM PROPOSALS

=======================================================================

                                (114-33)

                                HEARING

                               BEFORE THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             SECOND SESSION

                               __________

                           FEBRUARY 10, 2016

                               __________

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             COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                  BILL SHUSTER, Pennsylvania, Chairman
DON YOUNG, Alaska                    PETER A. DeFAZIO, Oregon
JOHN J. DUNCAN, Jr., Tennessee,      ELEANOR HOLMES NORTON, District of 
  Vice Chair                             Columbia
JOHN L. MICA, Florida                JERROLD NADLER, New York
FRANK A. LoBIONDO, New Jersey        CORRINE BROWN, Florida
SAM GRAVES, Missouri                 EDDIE BERNICE JOHNSON, Texas
CANDICE S. MILLER, Michigan          ELIJAH E. CUMMINGS, Maryland
DUNCAN HUNTER, California            RICK LARSEN, Washington
ERIC A. ``RICK'' CRAWFORD, Arkansas  MICHAEL E. CAPUANO, Massachusetts
LOU BARLETTA, Pennsylvania           GRACE F. NAPOLITANO, California
BLAKE FARENTHOLD, Texas              DANIEL LIPINSKI, Illinois
BOB GIBBS, Ohio                      STEVE COHEN, Tennessee
RICHARD L. HANNA, New York           ALBIO SIRES, New Jersey
DANIEL WEBSTER, Florida              DONNA F. EDWARDS, Maryland
JEFF DENHAM, California              JOHN GARAMENDI, California
REID J. RIBBLE, Wisconsin            ANDRE CARSON, Indiana
THOMAS MASSIE, Kentucky              JANICE HAHN, California
MARK MEADOWS, North Carolina         RICHARD M. NOLAN, Minnesota
SCOTT PERRY, Pennsylvania            ANN KIRKPATRICK, Arizona
RODNEY DAVIS, Illinois               DINA TITUS, Nevada
MARK SANFORD, South Carolina         SEAN PATRICK MALONEY, New York
ROB WOODALL, Georgia                 ELIZABETH H. ESTY, Connecticut
TODD ROKITA, Indiana                 LOIS FRANKEL, Florida
JOHN KATKO, New York                 CHERI BUSTOS, Illinois
BRIAN BABIN, Texas                   JARED HUFFMAN, California
CRESENT HARDY, Nevada                JULIA BROWNLEY, California
RYAN A. COSTELLO, Pennsylvania
GARRET GRAVES, Louisiana
MIMI WALTERS, California
BARBARA COMSTOCK, Virginia
CARLOS CURBELO, Florida
DAVID ROUZER, North Carolina
LEE M. ZELDIN, New York
MIKE BOST, Illinois
                                CONTENTS

                                                                   Page

Summary of Subject Matter........................................     v

                               TESTIMONY

Paul Rinaldi, President, National Air Traffic Controllers 
  Association....................................................    11
Nicholas E. Calio, President and Chief Executive Officer, 
  Airlines for America...........................................    11
Edward Bolen, President and Chief Executive Officer, National 
  Business Aviation Association..................................    11
Robert W. Poole, Jr., Director of Transportation Policy, Reason 
  Foundation.....................................................    11

               PREPARED STATEMENTS SUBMITTED BY WITNESSES

Paul Rinaldi.....................................................    69
Nicholas E. Calio................................................    71
Edward Bolen.....................................................    77
Robert W. Poole, Jr..............................................    85

                       SUBMISSIONS FOR THE RECORD

Hon. Bill Shuster, a Representative in Congress from the State of 
  Pennsylvania, submission of the following:

    Letter of February 1, 2016, from Hon. Byron L. Dorgan, U.S. 
      Senator from North Dakota, 1992-2010, et al., to Hon. Bill 
      Shuster, Chairman, Committee on Transportation and 
      Infrastructure.............................................    93
    Open letter to Congress of February 8, 2016, from Pete Sepp, 
      President, National Taxpayers Union, et al.................    95
    Letter to members of the National Air Traffic Controllers 
      Association (NATCA), from Paul Rinaldi, President, and 
      Trish Gilbert, Executive Vice President, NATCA.............    98
    Letter of February 9, 2016, from Antony Tyler, Director 
      General and CEO, International Air Transport Association, 
      to Hon. Bill Shuster, Chairman, Committee on Transportation 
      and Infrastructure, et al..................................   100
    Press release of February 3, 2016, ``ATC Modernization Would 
      Move U.S. Into 21st Century,'' Business Roundtable.........   102
    Press release of February 25, 2016, ``SWAPA Urges House 
      Passage of AIRR Act,'' Southwest Airlines Pilots' 
      Association................................................   103
    Press release of March 3, 2016, ``Allied Pilots Association 
      Endorses AIRR Act,'' Allied Pilots Association.............   104
    Letter of February 10, 2016, from Ronald P. Brower, Corporate 
      Secretary, and Robert E. Tanner, Vice President, Corporate 
      and Government Affairs, NetJets Inc., to Hon. Bill Shuster, 
      Chairman, Committee on Transportation and Infrastructure...   106
    Letter of February 8, 2016, from Logistics Supply Chain 
      Coalition, to Hon. Bill Shuster, Chairman, and Hon. Peter 
      A. DeFazio, Ranking Member, Committee on Transportation and 
      Infrastructure.............................................   107
    Report, ``Air Traffic Control Reform: Frequently Asked 
      Questions/The Aviation Innovation, Reform, and 
      Reauthorization Act Offers Opportunities for Needed 
      Modernization,'' February 9, 2016, by Marc Scribner, 
      Fellow, Competitive Enterprise Institute...................   108

Hon. Peter A. DeFazio, a Representative in Congress from the 
  State of Oregon, submission of the following:

    Letter of February 2, 2016, from Richard H. Anderson, Chief 
      Executive Officer, Delta Air Lines, Inc., to Hon. Bill 
      Shuster, Chairman, and Hon. Peter A. DeFazio, Ranking 
      Member, Committee on Transportation and Infrastructure.....   114
    Statement for the record from Experimental Aircraft 
      Association................................................   120
    Statement for the record from Thomas L. Hendricks, President 
      and CEO, National Air Transportation Association...........   138
    Letter of February 1, 2016, from Hon. Harold Rogers, 
      Chairman, House Committee on Appropriations, et al., to 
      Hon. Paul D. Ryan, Speaker of the House of Representatives, 
      et al......................................................   143
    Letter of January 27, 2016, from Hon. Thad Cochran, Chairman, 
      Senate Committee on Appropriations, et al., to Hon. John 
      Thune, Chairman, and Hon. Bill Nelson, Ranking Member, 
      Senate Committee on Commerce, Science, and Transportation..   145
    Petition by Americans Against Air Traffic Privatization, 
      ``Signature Needed: Tell Congress Not To Privatize Our Air 
      Traffic Control System''...................................   147
    Press release of February 3, 2016, ``ALPA Calls Proposed FAA 
      Reauthorization Bill Unsafe and Unfair,'' Air Line Pilots 
      Association, International.................................   149
    Letter of June 24, 2015, from Scott Frey, Director of Federal 
      Government Affairs, American Federation of State, County 
      and Municipal Employees, AFL-CIO...........................   151
    Letter of April 22, 2015, from J. David Cox, Sr., National 
      President, American Federation of Government Employees, et 
      al., to Hon. Bill Shuster, Chairman, Committee on 
      Transportation and Infrastructure, et al...................   152
    Press release of February 3, 2016, ``Regional Airline 
      Association Statement on the Introduction of the Aviation 
      Innovation, Reform, and Reauthorization (AIRR) Act,'' 
      Regional Airline Association...............................   154
    Letter of February 5, 2016, from Donald Cohen, Executive 
      Director, In the Public Interest, et al., to Hon. Paul D. 
      Ryan, Speaker of the House of Representatives, et al.......   155
    Report, ``Pitfalls of Air Traffic Control Privatization,'' 
      February 2003, by Professor Elliott Sclar, Columbia 
      University and The HDR Management Consulting Group.........   157
    Report to Hon. Peter A. DeFazio, Ranking Member, Committee on 
      Transportation and Infrastructure, and Hon. Rick Larsen, 
      Ranking Member, Subcommittee on Aviation, ``Federal 
      Aviation Administration: Preliminary Observations of 
      Potential Air Traffic Control Restructuring Transition 
      Issues,'' February 10, 2016, by U.S. Government 
      Accountability Office......................................   190
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             REVIEW OF AIR TRAFFIC CONTROL REFORM PROPOSALS

                              ----------                              


                      WEDNESDAY, FEBRUARY 10, 2016

                  House of Representatives,
    Committee on Transportation and Infrastructure,
                                            Washington, DC.
    The committee met, pursuant to notice, at 10:05 a.m. in 
room 2167, Rayburn House Office Building, Hon. Bill Shuster 
(Chairman of the committee) presiding.
    Mr. Shuster. The Committee on Transportation and 
Infrastructure will come to order. I would like to welcome 
everybody this morning. Looks like we have got a packed house, 
a lot of interest in the hearing today on reviewing the ATC 
[air traffic control] reform proposals. Again, I want to 
welcome everybody here.
    Last week Chairman LoBiondo and myself introduced the AIRR 
Act, the Aviation Innovation, Reform, and Reauthorization Act 
of 2016. This bill provides transformational reform of the U.S. 
aviation system, something that is absolutely necessary to 
modernize our air traffic control system, to ensure the system 
is both safe and efficient, and--let me say that again, safe is 
the number-one priority of this effort, and has always been of 
the effort at the FAA [Federal Aviation Administration], but we 
need to make sure it is efficient, and presently it is not 
efficient, and studies I see, it is working backward from 
becoming more efficient--and to ensure America leads the world 
in this industry, an industry that we invented.
    A key reform in this bill takes the ATC out of the Federal 
Government, and establishes a federally chartered, independent, 
not-for-profit Corporation to provide that service. This 
Corporation will be governed by a board representing the 
system's users. Today's hearing focuses on the ATC reform piece 
of the bill.
    I believe Ranking Member DeFazio and I agree that the 
status quo at the FAA is unacceptable, and that real change is 
necessary. We have worked together on large parts of this bill 
in the same bipartisan spirit as other bills this committee has 
passed and sent on to the President. I think we are on the same 
page on many reforms and provisions.
    We do have an honest policy disagreement on the approach to 
fixing ATC. I have been talking about my ideas for improving 
ATC for over 2 years, and I have put them on the table. I know 
the ranking member has some ideas, as well. Today is the 
opportunity for the committee to discuss the ideas we have put 
forward.
    As I said, I believe we have to do better. Delays, 
congestions, and inefficiencies cost our economy $30 billion a 
year. And in the next decade we will be up to 1 billion people, 
1 billion passengers flying. And without real improvement, the 
system is only going to get worse. Unfortunately, FAA has 
proven it can't modernize the air traffic system. Delays, cost 
overruns, and setbacks have been going on for 30 years.
    And we just got the newest report from the DOT OIG [U.S. 
Department of Transportation Office of Inspector General]. 
January 15th it came out. The FAA reforms have not achieved 
expected cost, efficiency, and modernization outcomes. And they 
did this looking back over the last 20 years. And if you go 
back even further, and report after report has said the FAA is 
incapable of developing and rolling out and modernizing the air 
traffic control system, among other things, among things they 
have--1995 we exempted them from a Federal human--or the 
personnel hiring/firing under the Federal Government, we 
exempted them from that.
    And today we hear about the need to hire 3,000 traffic 
controllers roughly a year, and they are only able to do about 
half of it. So throughout the system, throughout the reforms 
they have had available to them, they have not been able to do 
that. And, as I said, this is just the latest report from the 
inspector general.
    The IG [inspector general] has testified here that, while 
initial cost estimates for NextGen were about $40 billion, and 
the cost would double or triple and take a decade or more 
before it could be--possibly be deployed. So instead of costing 
$40 billion and hopefully finishing in 2025, realistically we 
are looking at upward of over $100 billion, and a completion in 
maybe 2035 or beyond.
    Without a doubt, Congress and the political interference 
are part of this problem, whether it is the 23 extensions we 
faced before, the sequestration, Government shutdown, 
congressional--Members of Congress weighing in when the agency 
tries to streamline, when it tries to close a facility or 
consolidate a facility, and some Member of Congress, powerful 
Member of Congress says, ``You are not going to close down my 
facility,'' it has caused big problems when you are trying to 
run an operation that is in need of consolidations, in need of 
reducing its footprint because of the technology that should be 
available to do that. So Congress has been a problem.
    But the basic problem is that the FAA is a huge 
bureaucracy, it is not a high-tech service provider. That is 
what we are talking about, telecommunications provider to the 
flying public. The planes are up in the air, the folks on the 
ground, making sure they are communicating to keep that 
airspace safe. Congress has tried procurement and personnel 
reforms at FAA, which I have mentioned, and they failed to 
implement them.
    The time for piecemeal reform is over. For 30 years we have 
tried this, a little bit here, a little bit there, even some 
big stuff. But it just was rearranging the deck chairs on the 
Titanic.
    The AIRR Act takes air traffic control out of the FAA and 
transitions it to a new Corporation, a not-for-profit 
Corporation, over the next 3 years. It's a 6-year bill, 3 years 
for transition and then the next 3 years to--for the startup of 
this new entity.
    And I just want to mention the Canadians and the Germans 
and the Australians across the country--were 50 of them--have 
done something very similar to what we are talking about here 
today. But I just want to say that August of this year, the 
Canadians will launch their first satellites into space. And by 
the end of 2017, they will have over 70 satellites launched. 
They will have their GPS [Global Positioning System] up in 
space. Currently, today, we can only see 30 percent of the 
airspace on our current technology. When they deployed those 70 
or so satellites, they will be able to see 100 percent of the 
airspace in the globe, the Canadians.
    I am told there are already 15 or 16 countries that have 
signed up for their services. So the Canadians, Nav Canada and 
their partners, they are developing this system. I believe they 
are going to become the dominant controller of airspace in the 
world. They are going to be able to fly planes over the North 
Atlantic and over the Pacific, straighter lines, closer 
together, more efficiently. And that is when we are going to 
really see our loss in the leadership in the world, when it 
comes to controlling airspace and being the gold standard.
    Again, this Corporation we are setting up is completely 
independent of the Federal Government. This is not a Government 
Corporation, a quasi-governmental entity, or a GSE [Government-
Sponsored Enterprise]. It is not that. The Federal Government 
will not back the obligations, the financial obligations, for 
this Corporation. The Corporation will simply provide a 
service.
    The bill does not give the airspace to the Corporation; 
that remains the public trust. That belongs to the American 
people. And the FAA remains absolutely responsible for 
regulating the airspace and aviation safety.
    We do this in a way that protects the GA [general aviation] 
and the rural communities. Noncommercial GA is exempted from 
fees or charges. Let me repeat that again, because everywhere I 
go in this town, it doesn't seem to resonate with people. 
Noncommercial general aviation is exempt from fees or charges. 
Now, there are some folks in this room and around town that 
don't think that is right, but I think that is the fair way to 
move forward. And the Corporation can't tie airspace access to 
what users pay. Again, can't tie their access to what they pay. 
In fact, in talking to the folks in Canada, the GA community 
has had a very positive experience up there.
    This structure gets ATC away from the budget process and 
political decisionmaking. I know the notion goes against the 
establishment. We have already had some very senior Republicans 
on very important committees say, ``Oh, we can't do this,'' and 
that is, again, the establishment pushing back, saying we can't 
do this. We can do this. We need to do this. We must do this. 
And we can do what is best for the American aviation system if 
we show the political will.
    And let me tell you, it is--this has not been an easy--I 
know a couple of you here at the witness stand have gone 
through some tough days and weeks. I appreciate you staying 
strong.
    And this isn't a new idea. This idea--one of our folks' 
testimony today, Mr. Poole, he has been at that desk I don't 
know how many times over the last 30 years, talking about this. 
The Clinton administration tried to do it, the Bush 
administration tried to do it. And, since that time, since 
Clinton's time and Bush's time, it has become the global 
standard, having an independent air traffic control system, 
independent from the regulator.
    ICAO [International Civil Aviation Organization], who is 
the--sort of sets the standards for the world, has said that is 
what we should be doing all over the country, over the world. 
And more than 50 other countries have successfully done this, 
with benefits across the board. Safety is maintained--in some 
cases it goes up, it is even safe. We have modernized systems, 
we have improved efficiencies and service, and costs have gone 
down.
    We will see more effective use of the airspace, airspace 
capacity increased, more direct routes, which will save time 
and money, increased capacity, shorter flight times, reduced 
delays and cancellations, and reduced pollution and noise. With 
the operational efficiencies, I believe we can save billions of 
dollars in the new system like this.
    And again, the FAA will focus on what it does best, and 
that is regulate safety of the system.
    We started this process over 2 years ago. We have worked 
with stakeholders throughout the aviation community to address 
issues they have raised. In this bill, we have worked to 
streamline the certification process, address safety issues, 
improve passenger experience, provide robust funding for the 
AIP [Airport Improvement Program], and address the safety--
integration of drones into the airspace.
    Taken as a whole, the AIRR Act does what is best for all 
users of the system, and the future of U.S. aviation. I want 
our country to have the safest--or continue to have the safest 
aviation system in the world, as well as the most efficient, 
cost-effective, and advanced system. We don't have that today, 
but I believe we will under this bill.
    So, with that, I would like to now recognize Ranking Member 
DeFazio for an opening statement.
    Mr. DeFazio. Thank you, Mr. Chairman. I--Mr. Chairman, we 
have worked together on many issues that relate to FAA 
reauthorization, and I appreciate working together. And there 
is much agreement, a couple of disagreements outside of the 
area of ATO [Air Traffic Organization], which we will go 
through tomorrow.
    The ATO is the major stumbling block, and I believe it 
jeopardizes all of the other work, the essential work in that 
bill that deals with drones and, you know, other safety issues, 
a whole host of issues: certification reform, which we have--
been long overdue, which is crucial to keeping our lead and 
manufacturing and software that relates to aviation in the 
world. And I fear that this proposal jeopardizes that.
    We do agree on enduring issues that Congress identified in 
the 1990s--1996 attempted to reform procurement and personnel 
at the FAA. The FAA blew it off. I will have targeted proposals 
on procurement and personnel, which I will offer tomorrow. And 
then, yes, there have been tremendous problems, and I believe, 
in part, NATCA [National Air Traffic Controllers Association] 
is here today because they are still really angry about 
sequestration shutdowns and layoffs that happened because of 
the budget shenanigans which were, of course, caused by the 
majority party.
    Now, how do we protect ourselves against Congress is a big 
issue. This is one particular solution. I believe there is a 
better solution, because this one actually fails that test. I 
raised last summer the issue that this would be 
unconstitutional. We cannot devolve regulatory or ratemaking 
and other competitive impacting issues to a private entity 
under the Constitution. It is very, very clear we can't do 
that.
    I was first blown off, but now the chairman's proposal 
actually recognizes it, and we have what I would call a Rube 
Goldberg, which I would like them to put up on the screen now.
    [Slide]
    Mr. DeFazio. And I guess this is the diagram of how this 
would work. Here is the new private ATC Corporation. Now, if 
they make a decision over here on aviation taxes, they have to 
refer that to the Secretary of Transportation, who has 45 days, 
yea or nay.
    Then it can be rejected, in which case the Corporation goes 
to court. Or they can be accepted, and passenger fees go up. No 
involvement of that messy little Congress thing in raising the 
fees on passengers or any other users of the system.
    Now, let's say that they want to change flight paths into 
an airport, including a metropolitan airspace that might have 
some noise implications. Well, that is what you call an 
external diseconomy. They don't care about noise. It is cheaper 
to come in over this route. So there is a lot of objections to 
it. It goes to the Secretary, the Secretary decides it.
    In any case, this is how it would all work. There is one 
exception for--contract air towers are exempt from this scheme. 
But everything else that relates to ATO would be in it, which 
is kind of odd that we would exempt the contract towers.
    Now, I think this is a potential morass. And we did just 
receive--and I regret it came out today, but look, we have been 
talking about this for 30 years. We have had the bill 1 week, 
we are holding one hearing with four witnesses, and we are 
marking the bill up tomorrow. The largest devolution of public 
assets to a private interest in I said the history of America. 
My colleague this morning, Earl Blumenauer, said, ``No, in the 
history of the world this is bigger than what happened in 
Russia when the oligarchs took over public assets.''
    We are talking about an asset--no one has valued it--worth 
between $30 billion and $50 billion that will be given to the 
private Corporation free of charge. That is unprecedented. 
There have been two privatizations, one privatization in 
Canada--they paid $1.4 billion, it was later found that it was 
undervalued by about $1 billion. I believe in Britain they paid 
a little over $1 billion for it. We are going to take a much 
larger entity, controlling a lot of real estate, some in some 
very expensive areas like New York City, and we are going to 
give it to a private Corporation. And the day after they 
establish, they can do with those assets whatever they wish. 
They can sell them, and we have no say. That, I think, is a 
cause for real concern.
    There are other major transition issues. Yes, there have 
been 81, actually, countries that have transitioned to a 
different form on ATO. Only two are private, unless you count 
the Emirates, where they control everything, including the 
airlines, so I won't talk about them. But there were huge 
transition issues in all these countries.
    There is a MITRE report, which I would recommend to people 
to look at, which raises concerns, as was referenced, you know, 
earlier, on how long this transition might take, and how 
disruptive it could be of the progress we are making on 
NextGen. I believe it could be very, very disruptive.
    And we have today--and again, I regret it just came out 
today, but it is like everything else here, we have to rush for 
the biggest change in our aviation system since it was created 
in its modern form in the 1950s, which took 2 years. In 1 week 
and 1 day we are going to spout it out of this committee. I 
think that is wrong, I think we should take more time. I think 
we should have more discussion of these issues, I think we 
should have more hearings, and I think we should work through 
this more thoughtfully, and over a longer period of time.
    The GAO [Government Accountability Office]--Mr. Chairman, 
you took 11 minutes and 35 seconds, so I hope you are not going 
to tell me to be quiet, because I am nowhere near there yet.
    Mr. Shuster. No, wouldn't think about it.
    Mr. DeFazio. OK, thank you, Mr. Chairman.
    [Laughter]
    Mr. DeFazio. The GAO report that came out this morning 
raises very, very serious questions, which will not be answered 
between today and tomorrow. They couldn't possibly be answered 
between today and tomorrow. And this is where they went out and 
surveyed 33 aviation experts about the privatization proposal. 
And again, I regret it only came out today, but this whole 
thing is being hurried through.
    Finally, you know, the issue before us about airspace, it 
was a statement the chairman made--and I hate to disagree with 
my chairman, but if someone controls the routes, and they 
control the conditions under which you access those routes, and 
they control the investment in the system itself, which means 
maybe we don't want to invest in things that serve medium and 
small cities--they aren't profit centers; why should we be 
putting investment there--you know, we are keeping control of 
the airspace? I guess there is some technical way we are 
keeping control of it, but none of that will be subject to any 
elected Representative.
    Now, in some cases, maybe that is good, and some other 
cases maybe that is not so good. In some cases that might be 
really, really bad for a certain community, parts of the 
country, or a certain user of the system, or maybe passengers 
themselves, who will perhaps now be charged a new fee for 
accessing the airspace over the United States. It is like you 
got to pay $25 for your bag, and what is this $10? That is for 
using the airspace. Nothing in this bill says that that 
couldn't happen. And, in fact, that would be up to the private 
entity.
    And it is a private entity, profit or not-profit, big deal. 
It is a corporate, private entity. But it does have the Rube 
Goldberg control. Ultimately, the Secretary gets a, ``No, you 
are not going to charge passengers $10 to use the airspace.'' 
Then the Corporation sues the Secretary, and how long does that 
take in the courts, and what kind of uncertainties do we 
create? Same thing with any rationalization of the system, 
where there is a disagreement between the Secretary and the 
board.
    So, I feel that, you know, we should perhaps slow down a 
little bit here, think about alternatives.
    I did spend a lot of time trying to develop a freestanding 
Government-sponsored, or a constitutionally chartered 
Corporation, because the chairman tells me on his side of the 
aisle you can't have the word ``Government,'' which would not 
have to report back to the Secretary of Transportation and have 
him say yea or nay on everything they do, and wouldn't have 
been a field day for lawyers. I couldn't generate support for 
that idea, and so, therefore, I will not be offering an 
alternative, but targeting reforms at the existing FAA in the 
hope of having more support for the needed reforms.
    So with that, Mr. Chairman, I thank you for holding this 
one hearing with four witnesses, and you know, I look forward 
to the discussion.
    Mr. Shuster. Well, I thank the gentleman. And just to point 
out, you know, this has been ongoing for 30 years. You have 
been here for almost 30 years, and you have been on this 
committee part of this discussion.
    And again, we know there is serious problems at the FAA--
and listening to you talk in many, many hearings about the 
problems. And let me just--for the record, we have had--this 
has been ongoing for 2 years. My colleagues on the other side 
were involved in many, if not all, of the discussions of 
stakeholders. They received the bill 10 days ago in its 
entirety. They have been looking, and we have--negotiating on 
much of the bill for months now, literally. So to say that this 
is--try to make this sound like it is a last-minute deal is 
just absolutely not the case.
    The--as I said, they have had it for 10 days, and I was 
under the impression--I was very eager to see your concept, 
because it seemed to me to be similar to mine--of course, 
different entities, but I was eager to see that. Now we are not 
even going to see that.
    And what we are seeing today for the first time is this 
Rube Goldberg chart, which I am sure, if we would have had 10 
days to look at, I am sure we could debunk it in its entirety. 
So again, that is the last thing here.
    And finally, let me just say we are having this hearing 
based on the request of the ranking member. He was insistent, I 
said, ``OK, fine, it is great, let's do that. If that is 
important to you, then we are going to go through with this.'' 
So here we are today.
    Again, I just want everybody to realize this has not been 
done in the dark, and it has not been done at the last minute. 
There has been lots and lots of discussion. And again, I think 
you will see other parts of the bill, that there is--their 
fingerprints are all over it, which is a good thing.
    So with that, I recognize----
    Mr. DeFazio. Mr. Chairman, just for a moment?
    Mr. Shuster. Yes.
    Mr. DeFazio. If I could, since you referenced me. Your 
staff has the proposal that I worked on, and we have made it 
available to others. So it is not a secret. So you do have it. 
And I tried to get discussion going about an alternative with 
you, with A4A [Airlines for America], with NATCA, and others. 
And that--the reciprocity was not forthcoming. It had to be a 
private Corporation.
    At this point I would ask unanimous consent to include in 
the record written statements in opposition to the ATC 
privatization from the following three organizations: Delta 
Airlines, the Experimental Aircraft Association, National Air 
Transport Association. In addition, I ask unanimous consent to 
include the following letters in opposition to ATC 
privatization from the bipartisan leadership of the House and 
Senate Appropriations Committees, 130,000 consumers, there are 
28 organizations--I will not read those, I will submit them for 
the record.
    And I would also like to enter into the record a report, 
``The Pitfalls of Air Traffic Control Privatization,'' February 
2003, commissioned by the National Air Traffic Controllers 
Association.
    And finally, I would like to enter into the record the--
today's Government Accountability Office report on concerns 
they have over this proposal.
    [No response.]
    Mr. Shuster. Without objection, so ordered.
    We will enter all of our organizations that support us at 
the end of the hearing, which I am sure is equal to or greater 
than the number that is there.
    With that, I would like to recognize the subcommittee 
chairman, Mr. LoBiondo, for a statement.
    Mr. LoBiondo. Good morning. Thank you, Chairman Shuster.
    As was referenced, over the last 2 years the Subcommittee 
on Aviation has held more than 180 listening sessions, 
roundtables, and hearings on the state of the Nation's air 
traffic control system with stakeholders identifying the 
perpetual challenges the FAA has faced in modernizing the 
National Airspace System. And, as the chairman noticed, while 
we currently enjoy the safest air traffic control system in the 
world, it is no longer anywhere close to the most efficient.
    The FAA has been attempting to modernize our safe yet 
antiquated ATC system since President Reagan's first year in 
office. Since that time the DOT Office of Inspector General, 
the Government Accountability Office, and numerous bipartisan 
Federal airline Commissions found that the FAA's progress with 
delivering planned NextGen capabilities has been plagued by 
significant delays, cost increases, and absence of promised 
benefits to the traveling public and industry stakeholders.
    In testimony before the subcommittee in 2014, DOT Inspector 
General Scovel warned that the NextGen implementation costs for 
Government and industry--and this is the stuff that sort of 
makes your hair catch fire and your eyes pop out--initially 
estimated at $20 billion for each, could double or triple. So 
we are talking about possibly $40 billion or $60 billion. And 
that NextGen implementation may take an additional decade. That 
is what is at stake here.
    Since 1981 we have invested over 70--7-0--$70 billion in 
taxpayer money to the air traffic control modernization, and 
yet we are still using essentially the same air traffic control 
system which is based on World War II-era technology. After $70 
billion.
    While stakeholders unanimously support NextGen, they have 
been unable to agree on how to address these well-documented 
implementation obstacles. As Chairman Shuster has stated, the 
committee has a historic opportunity to drive the 
transformational change needed to ensure that we have the very 
best ATC system in the world.
    Three years of Federal budget disputes led the FAA decision 
in 2013 to furlough 10 percent of its air traffic control 
workforce, and nearly close 149 contract towers to meet 
sequester-driven budgetary cuts. According to a December 2015 
report by GAO, budget uncertainty has also contributed to 
NextGen delays and cost overruns. Continued delays resulting 
from sequestration, employee furloughs, unpredictable 
continuing resolutions, and Government shutdowns have had a 
devastating impact on the FAA's ability to achieve 
transformational results.
    Only 2 months ago we were voting here again to keep the 
Government open while the FAA, many of my constituents, more 
than 3,000 working at its Technical Center in my district, were 
forced to make preparations in the event they needed to shelve 
the projects and be ready for a shutdown. That is why the AIRR 
Act, we worked to ensure that critical projects and safety in 
the skies continue without interruption.
    Included in the bill, section 241, will empower rather than 
stifle the employees involved in ATC modernization, 
particularly those at the FAA Tech Center. It will allow the 
Corporation to utilize the resources and extensive 
institutional expertise of the employees of the Tech Center to 
improve upon the already sterling safety record that we have 
all come to expect.
    We are the only developed country whose ATC system can be a 
political football, frequently held hostage to Federal budget 
disputes like the sequester, which threatened not only the 
ongoing operations of the system, but also the successful 
implementation of NextGen. Unless the ATC reforms in the AIRR 
Act are enacted, we risk failure in delivering NextGen as it 
was promised to the traveling public.
    I look forward to hearing from our witnesses on how the ATC 
reforms included in the AIRR Act will ensure we have the 
safest, most efficient, and modernized air traffic control 
system in the world. And I thank you, Mr. Chairman, for the 
opportunity.
    Mr. Shuster. Thank you, Mr. LoBiondo. Now I recognize the 
ranking member of the subcommittee, Mr. Larsen.
    Mr. Larsen. Thank you, Mr. Chairman. And thanks for 
agreeing to hold this hearing, and for the opportunity to 
discuss the proposal to privatize the ATC system.
    Before we talk about that, I do want to thank you and 
Chairman LoBiondo, who have worked with Ranking Member DeFazio 
and myself, and all the Members on every other title, as well, 
in the FAA reauthorization bill that was introduced last week. 
As a result, the bill is full of bipartisan provisions to 
increase airport investment, to improve U.S. manufacturers' 
ability to get products to market, to integrate unmanned 
aircraft, and to improve air service for the traveling public. 
A majority of the bill is a product of bipartisan efforts that 
will move the country's aviation system forward in a big way.
    However, I still continue to believe that privatizing the 
ATC in the U.S. would be a science experiment with a lot of 
potential to go wrong. I want to highlight two areas where I 
think the implications of this mistake are most evident and 
problematic.
    The first deals with NextGen. Now, while we can acknowledge 
that the implementation has been slow and expensive, it is now 
moving forward, thanks in large part to Chairman LoBiondo's 
efforts. The FAA is finally reaching and passing important 
milestones on major industry priorities such as DataComm, 
multiple runway operations, and other things. So I guess I 
would just note that breaking apart the FAA at a time when it 
is making real and important strides as far as NextGen 
implementation would be unwise. I would say, in fact, that we 
are on a nonstop flight with NextGen implementation, but we are 
headed for a 7-year-plus layover with privatization.
    The other area that causes me great concern, and where the 
proposal is only partially thought out at best, is what 
privatization would mean to the Department of Defense. Earlier 
this week I had the opportunity to speak with representatives 
from the Department of Defense about ATC privatization. The 
last conversation we had about this was in May, and the 
concerns have not changed. While they have a list, and I have a 
few of those that is in my statement there--so it is not an 
exhaustive list--I think it is critical for the committee to 
hear a few takeaways from that meeting.
    First, the one thing that is clear to me about where DOD 
[U.S. Department of Defense] fits into ATC privatization is 
that we have very little clarity on this issue. DOD currently 
controls nearly 15 percent of the Nation's airspace. Not 15 
percent of the flights, but 15 percent of the airspace. But 
this bill gives the Department a mere advisory role on the 
board of directors, a demotion from its current equal footing 
partnership with the FAA. The Department of Defense may have 
little to no say about routes and airspace because the bill 
does little to explain how the board would make these decisions 
with the DOD.
    Additionally, after decades of Government-to-Government 
relationships, the FAA and the DOD conduct day-to-day ATC 
operations under the guidance of various MOUs [memorandums of 
understanding] and policy agreements. How would this 
relationship be handled under privatization? How would dispute 
resolution be settled? We aren't sure, because the bill is 
silent on these issues.
    If the Corporation's goal is to maximize efficiency and 
reduce user fees, how would it maintain assets like primary 
radar that the DOD uses?
    We are also--I'm not sure how special-use airspace will 
operate, how user fees will be charged to international state 
aircraft, or how joint civilian and military installations will 
handle air traffic. And the list doesn't stop there.
    As we all know, the FAA's role in securing our national 
airspace is critical to homeland defense. This has been 
accomplished through longstanding and well-articulated 
agreements between the FAA and the DOD. I am concerned that 
entrusting this mission to a private-sector entity separate 
from the Government would be a reckless decision with 
potentially dire consequences that we may not have thought 
through yet, and they have not been fully aired.
    DOD's role in this privatization is undeveloped, uncertain, 
and undermined. Giving DOD a mere advisory role with no other 
discussion about the challenges reminds me of the role that 
Coldplay had in the Super Bowl halftime show.
    [Laughter]
    Mr. Larsen. Billed as a headliner, but quickly outshined. 
Sorry, Coldplay.
    [Laughter]
    Mr. Larsen. As we sit here today, the simple fact is that 
privatization raises too many questions that we just cannot 
answer, especially 1 week after seeing the legislation. I do 
not see how this proposal can go through until we get clear 
answers on these issues.
    Before this legislation moves further, this committee has 
responsibility to get clarity about what privatization means 
for national security, what impacts it could have, not on some 
users of the system, but on all users of the system. We haven't 
had those conversations, and we must.
    In conclusion, I do want to reemphasize there is much to 
commend in this legislation. There is much bipartisan work that 
has been done. And, like a ship that is weighed down by an 
anchor so it can't go any farther, I think we should lop off 
the anchor of ATC privatization, and let the rest of this bill 
sail on.
    With that, I yield back.
    Mr. Shuster. I thank the gentleman. Now we will go to our 
witnesses. We will introduce all four of you first, and then 
let you proceed.
    Joining us here today Paul Rinaldi, who is the president of 
the National Air Traffic Controllers Association; Nick Calio, 
president and chief executive officer of Airlines for America; 
Ed Bolen, the president and chief executive officer of the 
National Business Aviation Association; and Bob Poole, the 
director of transportation policy for the Reason Foundation.
    Again, I appreciate you all being here today. I believe all 
four of you have been here at least once or a couple of times, 
and over the last decade probably many times. So, again, 
appreciate you being here today.
    And we will start with Mr. Rinaldi.

  TESTIMONY OF PAUL RINALDI, PRESIDENT, NATIONAL AIR TRAFFIC 
CONTROLLERS ASSOCIATION; NICHOLAS E. CALIO, PRESIDENT AND CHIEF 
    EXECUTIVE OFFICER, AIRLINES FOR AMERICA; EDWARD BOLEN, 
   PRESIDENT AND CHIEF EXECUTIVE OFFICER, NATIONAL BUSINESS 
  AVIATION ASSOCIATION; AND ROBERT W. POOLE, JR., DIRECTOR OF 
            TRANSPORTATION POLICY, REASON FOUNDATION

    Mr. Rinaldi. Didn't realize I was going to be first. Thank 
you, Chairman Shuster, Ranking Member DeFazio, Chairman----
    Mr. Shuster. Pull that mic up a little closer. We want to 
hear every word.
    Mr. Rinaldi. Yes? Can you hear me now?
    Mr. Shuster. Thank you.
    Mr. Rinaldi. Thank you, Chairman Shuster, Ranking Member 
DeFazio, Chairman LoBiondo, and Ranking Member Larsen, and 
members of the committee. I am grateful for the opportunity to 
testify today as we discuss air traffic control reform and the 
FAA reauthorization bill, H.R. 4441.
    We all have a stake in our National Airspace System. It is 
an economic engine, contributing $1.5 trillion to our gross 
domestic product, and providing over 12 million American jobs. 
Currently we run the largest, safest, most efficient, most 
complex, most diverse airspace system in the world. Our system 
is unique, unequaled, and unrivaled by any other country. This 
is due in large part of the impeccable work of the men and 
women that NATCA represents.
    The United States airspace system is considered the gold 
standard in the world aviation community. And yet we have come 
to a difficult reality that change is needed. Globalization and 
innovation are driving some dramatic changes in the world 
aviation industry, and sadly, our current structure cannot keep 
up.
    The current aviation system has served us well until recent 
years. Unfortunately, we no longer have a stable, predictable 
funding stream, and this uncertainty has caused serious 
problems in the system. We all remember the disruptions we 
experienced in 2013 with sequestration, where the FAA had to 
scale down all modernization projects. The agency looked at 
closing 238 air traffic control towers, tried to close 149 of 
them, not because it was safe or it was efficient, but to save 
money.
    They continued and they stopped hiring air traffic 
controllers for a full year, which we still are having a 
problem today in our system getting air traffic controllers. 
And currently we are at a 27-year low of fully certified 
controllers. The FAA forced controllers onto furloughs, which 
caused rippling delay effects throughout our system. Further, 
the agency went to a fix-on-fail on maintenance philosophy, and 
stopped stockpiling critical parts of essential equipment we 
need for the operation. These decisions were all made to meet 
budget restrictions from sequestration, not for the operational 
reasons, and certainly not for the safety of our National 
Airspace System.
    Mr. Chairman, our 24/7, 365-day-a-year aviation system has 
been challenged over the last 10 years. We have experienced 24 
short-term extensions of authorization, a partial shutdown of 
the FAA, a complete Government shutdown, and numerous threats 
of Government shutdowns. Aviation safety should not come second 
to defunding Obamacare, Planned Parenthood, Syrian refugees, or 
gun control, or any other important issues that come before the 
body.
    We should have aviation safety be the primary issue when we 
talk about aviation in this country. All the stakeholders in 
the National Airspace System should work together to ensure the 
United States continues to be the world leader in aviation. 
With all of these challenges in mind, we applaud the hard work 
that the members on the committee did to draft a comprehensive 
FAA reauthorization bill to address these longstanding 
problems.
    NATCA has publicly stated that any FAA restructuring must 
achieve the following to maintain NATCA support. Any new 
structure must ensure that our employees are fully protected in 
our employment relationship. Maintaining our members' pay 
benefits, retirement, health care, along with our negotiated 
agreements for our work rules are crucial to safety of the 
system. Any new structure must make safety and the efficiency 
of the National Airspace System a priority. This means we 
cannot allow maintenance to lag, and cannot reduce staffing to 
save money.
    Any new structure must have a stable, predictable funding 
stream, and must be adequate to support all air traffic control 
services, included but not limited to staffing, hiring, 
training, long-term modernization projects, preventative 
maintenance, and modernization to our physical infrastructure. 
Many of our controllers are working in buildings over 50 years 
old.
    Any new structure must improve upon the status quo by 
providing an environment that promotes and grows aviation in 
this country, that allows us to continue to provide services to 
all segments of the aviation community. The commercial 
airlines, the cargo haulers, from the business jets to the 
general aviation, from our major hub airports in this country 
to our very small, rural America airports in this country are 
all important to our diverse community.
    NATCA supports this bill because it provides a stable, 
predictable funding stream, and contains necessary reforms that 
we believe will help us continue to run the world's safest, 
most efficient system. A not-for-profit, independent 
organization run by the board of stakeholders could deliver 
results similar to those we have seen in Canada.
    Finally, I want to state clearly that we will continue 
carefully to review this legislation. If at any time there are 
changes to this bill, we will immediately examine them to 
ensure the bill continues to align with our organization's 
policies, practices, and principles. And, if the changes don't, 
we will reserve the right to withdraw our support.
    I thank you for the opportunity to comment on the bill, and 
I look forward to answering any questions you guys may have.
    Mr. Shuster. Thank you very much.
    Next up, Nick Calio, A4A.
    Mr. Calio. Mr. Chairman and members of the committee, thank 
you for the opportunity to testify today. A4A commends this 
committee----
    Mr. Shuster. Pull your mic as close as you can to you 
there.
    Mr. Calio. We got a wire problem. OK.
    A4A commends this committee for the bipartisan manner in 
which it handles its business over the last 3 years. You 
repeatedly have shown that you can come together on complex 
issues and work together to address problems that impact the 
daily lives of the American people. We hope that that will be 
the case on this critical issue, as well, ultimately.
    The committee has a historic choice. Are you going to vote 
to correct the shortcomings of the FAA that you have dissected 
in this room for years and years, or are you going to vote to 
continue to talk for another 30 years about the problem of a 
governance and funding structure that has not been working, is 
not now working, and will not work in the future?
    A4A supports the AIRR Act, despite the fact that it has not 
had many things that we wanted, and has many things that we 
don't want, including the concern and the uncertainty of a 
board in which a super-majority of members are not airline. 
However, we do believe that this bill, if enacted, will make 
our air traffic control operation even better and safer than it 
is today.
    We support the creation of a federally chartered 
nonprofit--and I stress ``nonprofit,'' it is not privatized, 
most people who use that word want to get you to be against 
it--enterprise to run the air traffic control system, because 
it would separate the air traffic organization from the safety 
regulator, and it would put the FAA in a position to do what it 
does best, and the Government, which is regulate safety, not 
run a high-tech, 24/7 service business, which is what the air 
traffic control operation is.
    The reasons for change have been laid out before this in 
other committees and Congresses for over 30 years, as has been 
pointed out. You have held scores of hearings, hundreds of 
roundtables, multiple listening sessions, and directed the 
Office of Inspector General and the Government Accountability 
Office to study why the FAA has such troubles in procurement 
and delivering on technology.
    Those studies, as well as studies by at least four 
presidentially appointed, nonpartisan Commissions, the National 
Academy of Sciences, and scores of independent private aviation 
experts, have all pointed to the problems that the FAA has in 
keeping us at the forefront of modern aviation and innovation.
    It is all right here--I should say it is not all right 
here.
    These are the studies that have been done and reported 
since 2005, not going back 20 years or 30 years. I couldn't 
bring that stack because it was taller than I am. But I brought 
these for a reason. They are hard to ignore. The facts are all 
here, and they have been discussed and discussed. And while we 
have been talking and talking and analyzing and debating, other 
developed countries have moved forward.
    This bill is not proposing a radical change. Quite the 
contrary. It would simply put us in line with the international 
best practices norm that is found in over 60 developed 
countries who have done similar things, and since 1987. In 
essence, those 60 countries have done pilot programs for us. We 
can take best practices and lessons learned from them and apply 
them here. And international best practices, again, dictate the 
separation of the safety function from the operation of the 
system. Look at the other modes of transportation within the 
DOT. They are not like the FAA. They don't control both, it is 
one or the other.
    More legislation, more direction, yearly appropriations--
FAA authorization bills are not going to correct the problem. 
That has been tried for years, and it has failed. We can't 
simply keep rearranging the deck chairs. The DOT inspector 
general's report that came out in January references this. It 
points out that Congress has enacted legislation multiple times 
to try to make the FAA a performance-based organization that 
can deliver on the technology. It found that it really can't.
    As a result, the FAA has completed multiple 
reorganizations. Nothing is happening. Air traffic productivity 
has declined, despite a greater budget. Any of the opponents of 
this bill who tell you differently are either not recognizing 
the facts, or are distorting them.
    For example, some of the detractors will tell you that 
NextGen is getting much better, and point to the on-time 
performance by airlines. We would point out that, you know, 
block time, which is gate-to-gate flight time, is how you 
measure whether a flight is on time. Most, if not all of you, 
have flown from Washington to LaGuardia. That flight 20 years 
ago, when Washington and New York were the same distance apart 
they are now--at least to my knowledge--was blocked for 56 
minutes. Now it is blocked for 80 minutes. And that is so that 
flights can be on time to take care of congestion and some 
other issues.
    Safety I am just going to mention very quickly, and then I 
will conclude, Mr. Chairman. International experience and best 
practices have shown that safety can be maintained or made 
better by doing what is proposed here today. The FAA itself 
commissioned a study by the MITRE Corporation. That study 
looked at six other ANSPs [air navigation service providers] 
across the world, many with complex airspace like the United 
States. It found that in every case safety was maintained and, 
in many cases, made better. It also found that in every single 
one of those cases, both the safety regulator and the operator 
of the system increased their focus on safety. When 
interviewed, all of the parties involved on both sides said 
they wouldn't return to the old system.
    We have the opportunity here--you have the opportunity here 
to make a really good system that much better, cutting edge, 
and put us back at the forefront, where we belong in modern 
aviation. This is not a Democratic issue, it is not a 
Republican issue. It is a policy whose time has come to make 
our system better. Thank you.
    Mr. Shuster. Thank you.
    Next we go to Mr. Ed Bolen, president and CEO of the 
National Business Aviation Association.
    Ed, proceed.
    Mr. Bolen. Well, thank you. I appreciate the opportunity to 
be here today.
    It seems to me that, as we talk today about ATC reform, 
there are really three areas where we need to focus. First, we 
need to understand where we are today. Second, we need to 
understand where we want to be in the future. And, third, how 
best to get from where we are to where we want to be.
    As Paul Rinaldi indicated in his statement, today the U.S. 
has the largest, the safest, the most diverse, the most 
complex, and the most efficient air transportation system in 
the world. It is currently enjoying the safest period of 
history that we have ever seen. But being the best today is not 
sufficient. In order for our country to thrive, we need to be 
the best 5, 10, 25 years from now. The question is how do we 
get there?
    H.R. 4441, we believe, takes us down the wrong path. This 
bill takes our air traffic control system and turns it over to 
the big airlines. We think that is the wrong path. We think it 
is a dangerous path. We think it is a path that should be 
rejected, and here is why.
    Our Nation's air traffic control system is a monopoly, and 
it will stay a monopoly, going forward. The airlines, for 30 
years, have been lobbying Congress so that they can seize 
control of that natural monopoly and exert their authority over 
it. We think that is a fatally flawed concept. The public 
airspace belongs to the public, and it should be run for the 
public's benefit. Do we really think that, given control of 
this monopoly, the airlines would run it for every American's 
benefit? Reading the headlines over the past year would suggest 
that is probably not the case.
    ``Airline consolidation hits small cities the hardest,'' 
wrote the Wall Street Journal. ``Justice Department 
investigating potential airline price collusion,'' wrote the 
Washington Post. ``Airline complaints on the rise'' was the 
headline in the Hill. ``Airlines reap record profits and 
passengers get peanuts.'' That appeared in the New York Times 
this past weekend.
    Now, people have asked, ``If we give control to the 
airlines, what protections would consumers need, small towns 
need, general aviation need?'' But the very question itself is 
a tacit acknowledgment that protections are necessary. This is 
a little bit like someone saying, ``We want to put the fox in 
charge of the chicken coop. What do the chickens need in order 
to feel comfortable with that decision?'' We know that, 
ultimately, the fox is going to find its way around any 
protections, the chickens are going to be had. And when that 
happens, it is going to be too late to do anything about it.
    When the full dangers of putting the airlines in charge of 
our Nation's air traffic control monopoly are understood, 
Congress will be left with no resource. We need to find a way 
forward. Status quo is not acceptable. But turning our air 
traffic control system over to the airlines is just a bad idea. 
It is a dangerous idea. We are talking about giving them 
unbridled authority to make decisions about access, about 
rates, charges, about infrastructure. This is a sweeping 
transfer of authority, it is breathtaking in its magnitude, and 
it is potentially deadly in its consequences.
    We do not want to keep the status quo. We want to move 
forward. We don't want this path, however. We would advocate 
for targeted solutions to identified problems. We have talked 
about ways that we can address the funding issue. We are 
looking for ways to enhance business practices. We already know 
that the bill itself includes a lot of very important 
certification reforms.
    As Mr. Larsen said, there is an awful lot that's very good 
in this bill. There is a lot of important stuff in this bill. 
But at the heart of it is this sweeping transfer of authority 
to the airlines that we believe is a poison pill. It is a 
poison pill for communities, a poison pill for customers, it is 
a poison pill for general aviation. And no amount of sugar 
coating is going to change that.
    We believe this portion of the bill needs to be rejected, 
and we need to move forward with a long-term FAA 
reauthorization bill that is in the best interests of all 
Americans, not just those in large-hub cities, but including 
those in small towns and rural communities that depend on 
access to airports and to airspace, so that we can have a 
strong national economy and a strong air transportation system.
    Mr. Shuster. Thank you.
    And now Bob Poole, the director of transportation policy 
for the Reason Foundation.
    Mr. Poole, proceed.
    Mr. Poole. Thank you very much, Mr. Chairman, Ranking 
Member DeFazio, and Members. I have been researching the air 
traffic system since----
    Mr. Shuster. Can you pull the mic up a little bit closer?
    Mr. Poole. Yes. I have been researching----
    Mr. Shuster. Hold on a second. Are we going to turn those 
mics up a little bit? Good.
    Mr. Poole. I have been researching this subject since 1977, 
believe it or not, and have written many reports and journal 
articles about it. I am a member of GAO's National Aviation 
Studies Panel, was part of working groups on ATC reform at the 
Business Roundtable and at the Eno Center for Transportation.
    There is a growing consensus that our ATC system no longer 
has the most modern equipment, the most efficient airplane 
routings, or the best technology. So the question before us 
today is what is the best way to reform the system?
    Over the past 25 years, as has been said, more than 60 
countries have corporatized their systems, and 51 of those are 
commercialized, meaning that they have separated safety 
regulation from ATC service provision, they are self-funding by 
means of customer charges to ensure independence from 
Government budget problems, and they are designed, basically, 
as a customer-serving utility. And that is a very important 
word, which I will get back to.
    ATC is a monopoly, and there are three different ways of 
dealing with a monopoly: number one is a Government 
Corporation; number two is a private, for-profit company with 
rate regulation; and number three is a nonprofit, user co-op 
with self-regulation, because the users are basically the ones 
making the policy decisions on the board. These are the same 
three alternatives we have in public utilities in the United 
States, like electricity, water supply, telecommunications, so 
forth. There is a huge literature on how to do utilities, and 
these are the ways--these are the choices we have.
    There have been many independent studies of the performance 
of these numerous--50 or so--corporatized ATC providers over 
the years, including two full-length academic books. All of 
these studies have found reduced costs, increased efficiency, 
better technology, and no reduction in air safety and, in many 
cases, improvements in air safety.
    The main problems we are faced with today, as has been 
said, are uncertain and inadequate funding for ATC, a flawed 
governance model, and a status quo-oriented culture. In the 
study that I did for the Hudson Institute on innovation in air 
traffic control, 2 years ago, I concluded that the biggest of 
these three problems, which has not been mentioned much at all 
today, is the organizational culture, which is very status quo-
oriented.
    With inputs from a lot of current and former FAA people, my 
conclusion was that there are four reasons for this status quo 
culture in the ATO. Number one, the ATO self-identifies as a 
safety agency, rather than as a service provider to its 
customers. Number two, it has inadequate, let's say, senior 
management and high-technology people. Therefore, it is way 
overly dependent on contractors. Number three, it has excessive 
external oversight, as the GAO and the inspector general have 
reported out. The problem is called ``too many cooks'' to try 
to manage the business. And finally, a lack of customer focus. 
De facto, the ATO considers Congress, you folks, as its 
customer that it has to satisfy, rather than its aviation 
customers.
    Based on global best practice, we now have a recipe for how 
to fix these problems. Number one would be to separate the air 
traffic organization from the safety regulators, so that an 
innovative culture can develop in what would then become the 
corporatized provider. Number two, shift to direct charging to 
develop a customer-provider nexus. In other words, serve the 
customers who are paying the bills. User pay means user say, as 
they say in Canada. And, third, shift the governance from 
numerous overseers in Government--Congress and many agencies, 
including OMB [Office of Management and Budget], et cetera--and 
shift it to a core group of knowledgeable aviation 
stakeholders, carefully balanced among all the different 
stakeholders, including those who use the system and those who 
make it run. The best fit for these features is the user co-op 
model, and the best example of that is Nav Canada.
    You have two reform proposals before you today: Chairman 
Shuster's ATC Corporation and Ranking Member DeFazio's proposal 
to exempt the funding from the trust fund from sequestration 
and to mandate further personnel and procurement reforms. In my 
judgment, the Corporation plan is consistent with global best 
practice. It would address the funding, governance, and culture 
problems.
    The DeFazio alternative would keep air traffic control and 
safety regulation in the same organization. That is 
problematic, because it is contrary to ICAO principles. It 
retains the conflict of interest between regulation and service 
provision, and it reinforces the identity of the ATO as a 
safety agency, rather than as a high-tech service business that 
it really is and ought to be.
    There is also a major difference on funding. The 
Corporation would be paid by its customers, like a utility, 
which again would focus its attention on serving those 
customers. The DeFazio plan would retain funding from taxes, 
which means all the oversight to protect taxpayers' money would 
have to remain. And that is the biggest part of the problem, 
the ``too many cooks'' problem. It would also mean it is 
impossible to issue revenue bonds like airports can do.
    I am also dubious about further mandates for procurement 
and personnel reform. We know previous reforms like that have 
failed, but we have seen transformation in country after 
country that have converted ATC systems to corporate forms. I 
would rather go with what has been shown to work than what has 
been shown to fail.
    To sum up, the ATC Corporation proposal is based on global 
best practices. Arm's-length safety regulation is a 
precondition for developing the kind of innovative technology 
culture that our system needs to have to go forward and retain 
its status as the best in the world. Self-funding would free 
the company from budget constraints and allow it to issue 
revenue bonds as airports do.
    In reaching this conclusion--last point--I am most 
impressed by the findings of aviation professionals who know 
the system better than you or I know it. That includes the 
controller's union, obviously, represented by Paul Rinaldi here 
today. But it also includes all three people who served as 
chief operating officers of the ATO. Each of them tried very 
hard and very diligently to run the ATO as a business, and 
concluded that it was simply not possible, given the 
institutional constraints of being trapped inside a large tax-
funded bureaucracy. I take their judgment very seriously, and I 
hope you will, also. Thank you very much.
    Mr. Shuster. Thank you very much, Mr. Poole. And now we 
will go to questions. I want everybody to keep it to 5 minutes 
so we can get through as many questions as possible. And, if 
need be, we can go to a second round. And I will start.
    Mr. Bolen, first, I would say to you that saying it is 
efficient, the numbers just don't bear out. Delays have 
increased over the years, and especially at our big airports. 
Flight times between cities has increased because of the 
system. And you go on and on about the efficiencies. It is 
becoming less efficient, from what I can see from these studies 
I have, and I am sure that that pile there on the desk is--
would bear that out, also.
    And to say that the airlines are taking over this 
Corporation, I--there is an 11-member board. The GA community 
gets two seats, the Government gets two seats, the airlines get 
four, which is not a majority. ALPA [Air Line Pilots 
Association, International] gets one, NATCA gets one, and then 
there is a CEO. So I am--how do you--if they don't have a 
majority on the board, how do they gain control of the board, 
in your view?
    Mr. Bolen. Well, I think, as you indicated, the board 
itself starts with 10 people who then hire a chief executive 
officer. In most corporations, 30 percent or more is considered 
effective control. Here we start with the airlines controlling 
four seats. We then have the airline pilots. So airlines and 
their employees control five seats. We will then have people 
who are nominated to the board. Potentially, they could have 
airline backgrounds. And then this group will hire the CEO. So 
I think it is, by any definition, effective control of the 
system.
    I just want to go back and touch on the flight delays 
between two cities. It is my understanding that a lot of the 
block times were increased because 20 years ago, 10 years ago, 
there was a lot of advantage for companies putting in the block 
times with the shortest terms possible, so that their flights 
would appear at the top of the computer reservation scheme. 
Today there is much more focus on predictability. So some of 
that gaming of the system and saying what the flight times 
would be to get a bump up in the computer system is now gone 
away.
    Mr. Shuster. And so today I was hoping we would have two 
comprehensive proposals to look at, but unfortunately we have 
one, and it is the one that we have presented.
    So you don't like what we have, so what is your proposal? 
What would you do to change the system, strengthen the system? 
You say you don't want status quo, so what would be your 
proposal to change the system for the better?
    Mr. Bolen. Well, I think the idea of strengthening the 
funding stream is key. That has been identified by everyone at 
the table as a challenge.
    Mr. Shuster. The funding stream?
    Mr. Bolen. Yes. And I think that can be addressed. If you 
look at the revenues that come in today through the dedicated 
aviation taxes, that provides a very strong revenue stream. It 
seems to me that the revenues that are generated by a dedicated 
tax on aviation could and should be used for the purpose for 
which they were intended.
    So I think you could require mandatory spending, or 
automatic appropriations from the revenues that are coming in 
from the trust fund. And I think that would provide a strong 
base. I think you can also pass a long-term reauthorization 
bill. That would address some of the lapses that have been 
talked about. I think you could take steps to identify the U.S. 
air transportation system as fundamental to safety, so that it 
is not subject to some of the shutdowns that have been talked 
about.
    In terms of management practices, I think we can do more to 
enhance performance, procurement, and accountability. And I 
think we can create a board that can focus on those things.
    And then you have already addressed the certification, and 
I think that is a key part. You know, our members fly all over 
the world. And so they use all of those air traffic systems. 
And to a member, they believe that flying in the U.S. is the 
best system in the world. But they are very frustrated with 
other parts of the FAA, the approval parts, the certification 
parts.
    We have an opportunity in this bill to address what is 
broken in the FAA. The air traffic control system is 
currently--as has been described--the gold standard, and 
progress is being made moving forward. So I think we are 
focusing on the wrong part of the FAA in this bill.
    Mr. Shuster. Well, what you have just described is what we 
have been talking about for the last 30 years, and there is--I 
think that is only--they said only 10 years of reports. We have 
tried those things over and over, and so I just believe the 
time is now where you have got to do something fundamentally 
different to be able to achieve some of those things that you 
said, because it hasn't been done. It just hasn't been done.
    We can sit here, and we can keep talking about it. And if 
we don't do something like this, my guess is 10 years from now 
some of you guys will still be here, and ladies will still be 
here, you will be talking about the same thing.
    Bob, I am sorry, I thought you had only been working on 
this for 30 years. You have been working on it for 40 years. So 
again, this--the time has come. And Bob, if you could just talk 
a little bit about--Mr. Poole, what do you think the cost in an 
organization like this--based on your study, is it going to go 
down? Is it going to go up?
    Mr. Poole. Well, I think the cost should--the unit cost 
should come down. There are--we know there are economies of 
scale in air traffic control. The larger the number of 
transactions, the more you can spread fixed costs over a larger 
number of customers. So, we should have the lowest unit costs 
of any air traffic system in the world. We don't. We have a 
decent level of productivity. But Nav Canada, with one-ninth 
the number of transactions, has a lower unit cost than we do.
    And so, that suggests to me there is large potential for 
cost savings for a more efficient and productive system--new 
technology is really the key to that, but it also depends on an 
organizational culture that says we want to do what is best for 
our customers. That means that we are going to do the service 
at the lowest cost possible, given adequate safety 
improvements. You know, safety should only get better. It 
should definitely not get worse.
    But if your goal is to serve the customers in the most 
cost-effective way, now that would drive reflection of how you 
use technology to get the most bang for the buck.
    Mr. Shuster. So, with Nav Canada deploying their 
technology, their GPS-based system, by the end of 2017, that 
will allow them to get even more planes into their space, which 
should drive down their costs even greater.
    Mr. Poole. Absolutely, and that is true globally, as you 
mentioned in your opening comments. The satellite-based ADS-B 
is going to mean we can have radar-like separation over all of 
the world's oceans, where it is impossible to have radar, and 
that means more flight tracks closer together safely, so that 
planes can fly at the optimum altitudes, and so forth.
    Mr. Shuster. Thank you very much. With that, I recognize 
Mr. DeFazio.
    Mr. DeFazio. Thank you, Mr. Chairman. The--we have put $53 
billion into the facilities and equipment over the last 20 
years. And, as I mentioned earlier, we are going to give that 
asset to a private Corporation for no remuneration. And I would 
say that that has been paid disproportionately by passengers, 
taxpayers of the United States of America who are passengers on 
airlines. They--the ticket tax is the disproportionate amount.
    Yet there is no consumer or passenger rep on the board. And 
this is a yes-or-no question: Do you believe there should be a 
consumer passenger representative on this board? Yes or no, Mr. 
Calio? You can pass if--it is yes or no or pass.
    Mr. Calio. I am not going to do a yes or no----
    Mr. DeFazio. OK. All right, then----
    Mr. Calio. That doesn't show anything, Mr. DeFazio.
    Mr. DeFazio. Then on--Mr. Rinaldi, yes or no?
    Mr. Rinaldi. I would be OK with it.
    Mr. DeFazio. I am sorry?
    Mr. Rinaldi. I would be OK with it.
    Mr. DeFazio. OK.
    Mr. Poole. Yes, and I think that the Secretary is going to 
appoint such people.
    Mr. DeFazio. Well, that depends upon the Secretary. Mr. 
Bolen?
    Mr. Bolen. I don't think there should be a board. I think 
the public airspace should be governed by the public's elected 
officials----
    Mr. DeFazio. So you didn't--OK. All right, you got around 
the question, too. All right.
    [Laughter]
    Mr. DeFazio. But in any case, so--all right. Now, let's go 
to another issue that is of tremendous concern, representing a 
smaller airport.
    The GAO report--which, again, I apologize, people haven't 
had a chance to read, but since today is the only hearing, 
tomorrow is the markup--one of the points they make is that 
small and rural communities could be negatively affected under 
this construct, and they go on to say, ``In the case of the 
Canadian restructure, Canada's law addresses this issue by 
providing protections for designated services in northern or 
remote areas.'' This bill has no such provisions.
    There will be another yes-or-no answer here in a second.
    So Robin Hayes, JetBlue CEO, said the Corporation ``would 
direct infrastructure improvements to regions of the country 
where they will produce the most benefits, like the 
Northeast.''
    Jeff Smisek said, ``United's domestic network would be only 
as big as necessary to feed its international network.''
    Now, does that sound like we are going to have a 
comprehensive system that serves everybody and everybody's 
interests, and everybody's interests are protected?
    I will start with you, Mr. Bolen, yes or no.
    Mr. Bolen. No.
    Mr. DeFazio. Come on.
    Mr. Poole. No, but I think----
    Mr. DeFazio. OK, that is good----
    Mr. Poole. That is an airline----
    Mr. DeFazio. We only have 5 minutes. So yes, Mr. Rinaldi?
    Mr. Rinaldi. What you quoted, no, but I don't believe----
    Mr. DeFazio. OK.
    Mr. Rinaldi. That is just the opinion of airline CEOs.
    Mr. DeFazio. Yes, that is right. And they only have four 
seats on the board.
    Mr. Calio?
    Mr. Calio. No.
    Mr. DeFazio. OK, thank you. That is good. All right.
    Let's move on to air traffic control, because we are 
talking about--now, you know, one of the issues--and I would be 
interested how the board might deal with this, and this is a 
quote from Randy Babbitt. And you can talk about satellite 
base, you can talk about the spiffiest system in the world. 
``We can do everything in the world, but at the end of the day 
at LaGuardia Airport where it is a one-runway operation, you 
can still only land them once every 54 seconds.'' And he goes 
on to talk about airlines opposing PFCs [passenger facility 
charges] and that. We won't get into that debate today.
    But the point is this new board is going to have--want to 
make the system more efficient. Regional airlines, of course, 
are opposed. What would happen if the board said, ``You can't 
land a plane that had--carries less than X-number of passengers 
at LaGuardia Airport,'' essentially putting the regional 
airlines out of business? Is that possible, under this 
construct? Yes or no.
    Mr. Bolen. Yes, it is, and that is one of our fundamental 
concerns about it.
    Mr. DeFazio. Yes. Mr. Poole?
    Mr. Poole. I don't think so, because I think that is an 
airport question----
    Mr. DeFazio. Well, yes, OK, you don't think so, but you 
won't--Mr. Rinaldi?
    Mr. Rinaldi. I don't believe it is.
    Mr. DeFazio. OK. What?
    Mr. Calio. No, it is not possible.
    Mr. DeFazio. OK. It is not possible? OK. Then----
    Mr. Calio. No. Under Federal regulations, it is not.
    Mr. DeFazio. OK. Well, good. Then wouldn't--let's go back 
to my previous point. Would any of you support the provision 
that we have in Canada, which says, on a statutory basis, their 
law addressed the issue for protections for designated services 
in northern remote areas. Should we adopt something similar for 
small and medium airports in the United States of America? Yes 
or no.
    Mr. Bolen. I think we should have as many protections as 
possible, and I am not sure those protections are going to be 
sufficient----
    Mr. DeFazio. OK. Mr. Poole?
    Mr. Poole. Yes.
    Mr. DeFazio. OK. Mr. Rinaldi?
    Mr. Rinaldi. Yes, of course.
    Mr. Calio. For remote areas? Yes.
    Mr. DeFazio. Well, we didn't get remote, I want to go 
beyond remote.
    OK, all right. Let's move on now to the issue of, you know, 
getting new technology on board. Where is that? Quickly, 
quickly, quickly. Sorry, I--you know, I haven't figured out how 
to write notes on my iPad yesterday, and you know, on the text 
of your statements. Well, never mind, we can't find that one 
right now. I will get it my next round.
    Let's go to another one. So we are creating--we are 
always--you know, here we are really upset about things that 
are too big to fail, and I couldn't create a Government 
Corporation because that would be like Fannie Mae, Freddie Mac, 
any of those GSEs, whatever, we can't have that because we have 
to bail them out. Well, what happens if this system goes 
insolvent? Wouldn't you say that the air traffic control of the 
movement of goods and people across the United States of 
America is too big to fail, that it is an absolutely essential 
service, and if it became insolvent Congress would have no 
option but to bail it out, as happened in Great Britain after 
it was privatized?
    Mr. Bolen, yes or no?
    Mr. Bolen. Yes.
    Mr. DeFazio. Mr. Poole?
    Mr. Poole. No.
    Mr. DeFazio. We wouldn't bail it out? We would just let it 
shut down?
    Mr. Poole. No, no, no----
    Mr. DeFazio. OK, good----
    Mr. Poole. The customers would have to pay more.
    Mr. DeFazio. Well, oh, the customers would have to pay 
more. OK. What if the Secretary disapproves that?
    Mr. Rinaldi?
    Mr. Rinaldi. Yes.
    Mr. Calio. No.
    Mr. DeFazio. No? OK. So we have some disagreement there. So 
we are creating something that is too big to fail. In the case 
of Great Britain, because of a downturn in air traffic, they 
had to bail it out. Mr. Poole says we shouldn't bail it out, 
they should just raise fees. But as we saw in the Rube Goldberg 
construct, if you raise fees--for instance, you want to charge 
passengers for using the airspace over the United States--the 
Secretary has to approve it.
    Bernie Sanders, Secretary of Transportation, says, ``Hell 
no, we are not going to charge people to use the airspace of 
the United States.'' We have an impasse here. So, you know, I 
think there are a lot of unanswered questions.
    I am over my time--thank you, Mr. Chairman, for your 
indulgence. And we will get to another round.
    Mr. Shuster. I thank the gentleman. Again, yes-or-no 
answers I don't think really give the witnesses a fair and 
constructive hearing here. I mean you wanted a hearing, Mr. 
DeFazio, you have got a hearing.
    Mr. DeFazio. I am trying to--questions, Mr. Chairman----
    Mr. Shuster. Well, Mr.--those aren't--you are trying to----
    Mr. DeFazio. Mr. Chairman, when we have----
    Mr. Shuster [continuing]. Get a yes or no----
    Mr. DeFazio. When I have four witnesses and 5 minutes, I 
have got to get a lot of questions in, Mr. Chairman.
    Mr. Shuster. Mr. DeFazio, you know very well the way I 
operate. You will get your opportunity. Let these folks answer 
the question, because they are not yes-or-no answers in many 
cases.
    For instance, we do not discriminate against--we say in 
this you can't discriminate to--air access. We also, in rural 
areas--you know, the technology that Sweden uses today, they 
have these rural airports that aren't--they don't need a 
controller. The technology is there. We are incapable of doing 
that today, stuck in this system that doesn't work.
    So, again, I will give you ample time, but just please 
allow these people to give you an answer that is--there is not 
a yes-or-no answer. So let's move on.
    Yes, I will give someone--answer to Mr. Calio, you started 
to----
    Mr. Young. Yes, look, but the time is over.
    Mr. Shuster. Well, the good news about--I am the chairman, 
I get to decide when the time is----
    Mr. Young. Yes, I realize that, but----
    Mr. Shuster. So, Mr. Calio, you were questioned on--you 
were going to make an answer. Could you expound upon any of 
those ones that you wanted to?
    Mr. Calio. To be honest, they came so fast I can't remember 
which one it was.
    [Laughter]
    Mr. Shuster. OK. Well, Mr. Bolen, in all fairness, is there 
any one that you--you had a couple yes-or-noes. Is there any 
one you want to expand on and say why, one way or the other?
    Mr. Bolen. Well, we are concerned about rural access to all 
of this. I mean what we are--have been told is that this new 
system is going to save billions of dollars. We have not seen 
where services and equipment are going to be cut. We haven't 
seen where jobs are going to be lost.
    When we look at the protections today, as I understand them 
about access to airports, the protection is only based on the 
rates and charges one pays. This says nothing about the size of 
the airplane, the type of operation it is. We have seen in 
other parts of the world where commercial airplanes have 
priority over noncommercial airplanes, and there are a number 
of other ways that discrimination can take place. So that is a 
concern----
    Mr. Shuster. OK, we put in there that we don't want to see 
that discrimination occur. And again, it is--where are jobs 
going to be gained, where is technology going to be gained, 
that is the other side of the coin. And that is what I am 
actually focusing on, looking forward.
    With that, I will go to Mr. Young, Chairman Young.
    Mr. Young. Thank you, Mr. Chairman. I want to ask every one 
of these Members in this room, on this committee, how many of 
you are happy with the airline that serves you--is happy with 
the airline that serves you now? You are happy with the one 
that serves--two?
    [Laughter]
    Mr. Young. I mean I am bringing out a point. This is on the 
board. Four members from--airlines, there is not one of us 
really happy with the airlines. Alaska Airlines does the best 
job, that is recorded. But just think about that when we 
organize this bill, when we deal this bill in creating the 
board.
    Now I am personally involved in this legislation. If 
anyone's State is affected by this legislation, it is Alaska. 
You take all the land east of the Mississippi to the tip of 
Maine to the tip of Florida, that is Alaska, part of it. And 
you have 253 congressmen and 52 Senators in that area. And in 
this bill we eliminate--they say you do not--eliminate 
essential air service. In a sense I have to take and fight each 
year to get appropriations to fund it. And that is wrong. I 
have told the chairman of this. Essential air service is 
crucial to my State.
    Second part is if we take--the 135s are exempted or not 
exempted from the taxes. That is what serves my community. I 
don't have highways, I don't have streets. I have got air. And 
what this bill does, a lot of--in this bill is good, Mr. 
Chairman, I will admit that. I have gone through it. FAA has 
got too big, and they are incestuously created. They have been 
around too long and they get involved in golf courses, getting 
involved in some silly-ass things that have nothing to do with 
safety, and that has to be changed.
    But the idea we are going to penalize a State--and I have 
asked you to exempt Alaska. Don't just give it to the big 
airlines, because what will happen is the consumer will not be 
served correctly.
    We started out, when I first got elected, we had 29 
airlines. We have got basically four now. Four. And if they are 
going to run this FAA, I don't think the consumer is going to 
get the right representation on that board. I am glad to hear 
the witnesses say that they would support at least a consumer 
being on that board. And that is for the airlines.
    Mr. Chairman, I will say again this bill, if it is not 
fixed, I am not going to support it. It had better be fixed. I 
yield back.
    Mr. Shuster. Thank you, Mr. Chairman. And I just want to 
point out--a couple times mentioned about the board makeup. 
There are two seats for the Government, public interest. That 
is where we believe the public interest will be served with our 
voice there.
    Mr. Young. Will the gentleman yield? Let's talk about the 
board.
    Mr. Shuster. Certainly.
    Mr. Young. You got four big airlines as board members. 
NATCA now is supporting it. And I question that, by the way. I 
fought for you every inch of the way, and we want to find out 
what is behind that.
    General aviation has one. Two? General aviation has two. 
OK, two. What is the other one?
    Mr. Shuster. Two to the Government.
    Mr. Young. Two--and who are they going to be? Do we have 
any input on that? No. We do not. The President has----
    Mr. Shuster. The Department of Transportation will have it.
    Mr. Young. The President. And we are the Congress of the 
United States. I would feel a lot better if we were to appoint 
them. Why should we let a President appoint them? This is our 
job as legislators.
    If we are going to change the system, let us change it with 
us having some control over it, financially. And the board 
members should be appointed from the Congress. I am not going 
to give any President any more authority. That is the wrong--we 
have done this over and over again. We give the President--we 
might as well have a king. I don't want a king.
    Mr. Shuster. Claiming back my time. With that, Ms. Norton 
is recognized.
    Ms. Norton. Let me say the point that the gentleman from 
Alaska was making is that there is no requirement that there be 
a member of the public, or a consumer, on the board. There may 
be, but a President may decide that, ``With all these experts 
on the board, I better make sure that I have my own expert.'' 
So there is no requirement. That could have been in the bill.
    Mr. Rinaldi went down a list of problems with which I could 
not be more sympathetic, but they are congressionally inflicted 
problems: sequester and shutdown and the appropriation process. 
So what we have in this bill is that the FAA, not the Congress, 
should change. And the frustration with the Congress--and, for 
that matter, even with NextGen--is well placed, although we see 
some movement on NextGen.
    So, I want to say I appreciate how the chairman has reached 
out to the minority so that there are provisions in here with 
which I agree. And I understand the frustration. And I don't 
believe that there is any case to be made for the problem--FAA. 
I really don't. But its dysfunction does not make the case for 
this proposal.
    What is most surprising to me--because I am trying to find 
out how this would work in practice--what is most surprising to 
me is how it encourages litigation. The last thing I would have 
expected from my friends on the other side is a system that 
said, ``Hey, sue me if you don't like it,'' and that is 
essentially--and I want to ask you about this--that is 
essentially what I think it says.
    If the Secretary--you can go to the Secretary. If the 
Secretary disagrees, and you can't reach some agreement, then 
somebody has got to bring a court suit. So it goes to another 
part of our separation-of-powers system that is the judiciary, 
which is the slowest, and the framers made it the slowest on 
purpose. I am trying to find out how this thing would work. How 
does this creature work?
    For example, there is a problem in this region, the 
District of Columbia/Maryland/Virginia, of unbearable noise. So 
we go to the FAA. Actually, they have some powers. They can 
issue rules. There are things they can do. I don't like the 
fact that there is not a firewall between them--that gets into 
legal technicalities.
    So how would this work? Is there rulemaking power here? 
Does it have the same presumption of--that unless it is 
arbitrary, it goes into effect? Because that is how the courts 
operate it when it is an agency. So how does it work?
    I am a member of the public that can't stand this noise. 
Actually, that is the case all over America now. Would somebody 
tell me how I get this Corporation to respond to that consumer 
problem that is now plaguing all parts of the United States?
    [No response.]
    Ms. Norton. Somebody speak up.
    Mr. Shuster. Well, what is your question?
    Ms. Norton. My question is how would this----
    Mr. Shuster. To the noise?
    Ms. Norton. How would one get from this body a remedy for 
this problem? I am asking----
    Mr. Shuster. I missed the problem. What----
    Ms. Norton. Rulemaking authority? I am asking----
    Mr. Shuster. Is that a noise problem?
    Ms. Norton. I am giving that as an example.
    Mr. Shuster. We have in the bill that--remedies to have the 
community be involved to make sure that, if there is noise 
problems, that they are going to be addressed----
    Ms. Norton. Mr. Chairman, only because that is in my 
district--I am trying to ask how the public addresses this 
agency. I know how it addresses the FAA. I know how the FAA 
communicates the rulemaking, et cetera. I am trying to find--
suppose it is with NextGen, whatever they are doing. How do I 
approach this agency, and how do the courts respond?
    Mr. Bolen. Well, the bill itself is very vague.
    My understanding is that it appears to be largely modeled 
after Canada. I had an opportunity to visit Nav Canada last 
summer. We asked specifically about concerns like that, noise 
concerns, for example. We were told that they have an 
opportunity to call up and register their concern, and that is 
the end of it.
    We see that they also have that ability in determining 
levels of service and in rates and charges in Canada. They put 
forward, ``Here is what we want to do,'' and as long as they 
follow the methodology that they said that they would follow, 
then there is no real appeal to that.
    So we think you are raising a concern that is very 
important.
    Mr. Shuster. Will the gentlelady yield?
    Ms. Norton. I would be pleased to yield to the gentleman.
    Mr. Shuster. It is in the bill that we get communities 
involved in these decisions. But at the end of the day, as we 
have pointed out, the FAA, which--back at Government, the 
regulator--would be involved in this, similar to the way it is 
today.
    Ms. Norton. That is what I am trying to find--I was just 
trying to find out the mechanism. I know how I approach the 
FAA.
    Mr. Shuster. That----
    Ms. Norton. I don't know how I would approach this entity.
    Mr. Shuster. You would approach the FAA like you do today 
in this situation----
    Ms. Norton. Well, you know, they might issue a rule. Can 
they issue a rule? Can this entity issue a rule?
    Mr. Shuster. No. They are not--it is not a regulating body. 
It is a service provider. It is a service provider that will 
manage the airspace.
    When it comes to safety and regulatory things, it goes back 
to the governmental body. So if there is an issue like that--
and hopefully they can work through the process with the 
airlines on a noise problem, for instance, because I know we 
got noise problems in many cities--but at the end of the day it 
would go back to the regulator, and the regulator is the FAA in 
Government.
    Ms. Norton. You see, Mr. Chairman, then we still have them 
mixed together, and the public doesn't know, really, to whom do 
I go to get, for example, a NextGen remedy.
    You know, most of the noise is NextGen--is a NextGen 
problem. And if it is this entity that is going to revise 
NextGen, I would think I should go to them to talk to them.
    Mr. Shuster. Well, NextGen would--because of a--because of 
the reduction in the way that people are able to land, you 
would have less noise, we believe. But also, if there is a 
remedy needed, just as there is today, you go back to the 
regulator, and that would be the FAA that remains in 
Government. This is not a regulatory body, it is a service 
provider.
    And with that, I yield to Mr. Mica, Chairman Mica.
    Mr. Mica. Well, thank you, Mr. Chairman. And I salute you. 
Also Mr. LoBiondo. You have taken on a tough challenge. We have 
tried to do this over the past three decades, as you have 
heard.
    Everybody is in agreement that FAA, as it is currently 
structured to oversee and operate air traffic control, is 
dysfunctional. I think we are living on borrowed time. We are 
going to have a major incident.
    At the bottom of the barrel are our air traffic 
controllers. The working conditions for our air traffic 
controllers are shameful.
    You were in Canada, you said, Mr. Bolen. Some of you have 
been there. We are so far behind. The way we treat our air 
traffic controllers--I used to have to go out--and I know they 
still have the same lousy working conditions. I remember going 
to, like, the Atlanta TRACON [Terminal Radar Approach Control], 
mold growing there. That is no way to run a system in the 21st 
century, in 2016.
    Now, we have some disagreement on how we restructure this. 
And we have got to come together, guys.
    Mr. Poole, we are falling further and further behind, 
internationally. I don't want to adopt the Canadian system, I 
don't want the German system, I don't want the U.K. system. We 
need a system design that works for the United States. Right? 
And this is important, economically. If we lose our edge here, 
we will lose manufacturing. We will lose technology. We will 
lose opportunities for employment. And we will be left behind.
    We are still writing a--aren't we, Mr. Poole, a ground--
1950s radar-based system, and the rest of the world is looking 
at----
    Mr. Poole. Essentially, yes. I mean we have paper flight 
strips and----
    Mr. Mica. Yes. Here, here. I held this up at the press 
conference. Here is my--this--Mr. Rinaldi, isn't this what we 
are operating with, paper strips?
    Mr. Rinaldi. Yes, it is.
    Mr. Mica. It is shameful. Now, I know there is 
disagreement. Some of you are getting pressure. The biggest 
pressure is probably general aviation, and they want to be 
treated fairly.
    Mr. Bolen, if we can come up with something that satisfies 
your concern about the financing not going into user fees or 
not overburdening general aviation, could you cooperate?
    Mr. Bolen. A couple weeks ago, 15 general aviation 
associations----
    Mr. Mica. No----
    Mr. Bolen [continuing]. Sent a letter saying that our 
concerns about----
    Mr. Mica. I know, but----
    Mr. Bolen [continuing]. This go well beyond----
    Mr. Mica. OK----
    Mr. Bolen [continuing]. The fee issue.
    Mr. Mica. And if some of the----
    Mr. Bolen. And get to the structure.
    Mr. Mica. Well, currently--Mr. Calio, the commercial 
aviation, passenger aviation, you are 7.5 percent, and the 
other money you put into the trust fund is about 94 percent, is 
that correct?
    Mr. Calio. Yes, Mr. Mica, it is.
    Mr. Mica. And what percentage of the flights in the 
airspace do you have?
    Mr. Calio. Seventy-seven percent.
    Mr. Mica. And general aviation, what do you contribute 
financially?
    Mr. Bolen. Financially, the last time we saw IRS (Internal 
Revenue Service] records was 8.5 percent.
    Mr. Mica. And what number of flights do you have?
    Mr. Bolen. Well, we have, depending on how you look at the 
controlled flights, somewhere between 17 and 22 percent, and 
that is----
    Mr. Mica. But we----
    Mr. Bolen [continuing]. ICAO has said you look at----
    Mr. Mica. We can come up with a fairness ratio. We can 
guarantee that we are not going to overburden general aviation 
and have the user pay a fair fee. You don't want it to be a 
user fee, but you pay through primarily fuel tax, right?
    Mr. Bolen. Yes. But again, our concerns go well beyond the 
fee structure and get to who is in control of the airspace. We 
believe that the airlines----
    Mr. Mica. So you would like better representation, too. 
That is another element that you would like to see on the 
proposed board, right?
    Mr. Bolen. Again, we----
    Mr. Mica. Yes or no? I mean----
    Mr. Bolen. We think this is a fundamentally flawed----
    Mr. Mica. No. Again, what do you want? Don't tell me it is 
fundamentally flawed. I am trying to put together something 
that will work. You have got an air traffic system that is 
headed for disaster. It is going to happen, I am telling you.
    Tell us what you want. So something in finance, better 
financing, a guarantee, and then you want better 
representation. Those are a couple major things gathered from 
your testimony and what I have seen. Right?
    Mr. Bolen. Ensuring public access----
    Mr. Mica. Yes, and public access----
    Mr. Bolen [continuing]. To airports and airspace is 
fundamental, ensuring----
    Mr. Mica. OK. Well, what I want from you guys to give to 
the chairman--the two chairmen and Mr. DeFazio--is the positive 
things that we can agree on. We have got to make a good attempt 
to get this done.
    I am telling you, you are living on borrowed time. This is 
not fair to our air traffic controllers. We are using paper 
slips, technology that is dated back to the 1960s and 1970s 
that should be replaced. The system is on the verge of melting 
down.
    And then to--the biggest concern I have is also losing our 
place. Right, Mr. Poole? Say it again to these folks, because 
they don't seem to get it, not only that unsafe system behind 
the technology, but as far as our place in aviation, which we 
have always led, we will not lead. Is that correct, or----
    Mr. Poole. We are not leading it today, for example, in 
space-based----
    Mr. Mica. Exactly, exactly.
    Mr. Poole [continuing]. ADS-B and in DataComm.
    Mr. Mica. I yield back the balance of my time, and I look 
forward to working with the chairman. Bring these guys together 
and Members. We have got to get it right. Amen.
    Mr. Shuster. Thank you, Mr. Mica. And I just want to make 
it clear to all the Members. I know some of you have had ample 
time, some of you may not have looked at it.
    But just to be very clear on this, in the business jet 
community, the general aviation community, there is basically 
three tranches of them. there is the single-piston folks that--
they are going to pay the gas tax they pay today. We have said 
we are not changing that. And the business jet folks, the folks 
that Mr. Bolen represents, we have said the same to them. You 
pay a gas tax, that is where you are going to pay. So that is 
really unchanged for them. The third piece of that is what you 
call part 135, it is the--and those two, they are 
noncommercial, which I just named.
    Then, if you become a commercial operator, and you want to 
get passengers and make a profit, what you do today is you pay 
a ticket tax, a segment tax, and a gas tax. What we have said 
to that is we are going to do away with the segment and the 
ticket tax, and you would pay the user fee based on your weight 
and distance, which we think is fair.
    There is some notion out there that they are going to raise 
the user fee so high that a fellow or woman who wants to fly a 
G5 or a G6 is going to be forced to fly first class on an 
airline. I just cannot imagine that is going to happen.
    Now, the issue Mr. Bolen does bring up, airspace, we have 
to make sure that the airspace--there is access to it. I have 
got about maybe three people that work in the airlines in my 
district. I have got several hundred GA pilots. I am from a 
rural area, I have a rural airport. So we want to take care of 
rural airports, we want to make sure that we don't harm the 
general aviation community.
    So those of you that haven't really looked at the structure 
of what we are doing, funding-wise, that is what we are doing 
to the general aviation community, and I think it is more than 
fair, what we are--what we have proposed.
    So, with that, go to Mr. Nadler.
    Mr. Nadler. Thank you, Mr. Chairman. Mr. Chairman, just 2 
months ago this committee enacted a major surface 
transportation bill that made significant improvements to our 
highway transit and rail system. That bill was developed in a 
bipartisan manner and passed overwhelmingly.
    Unfortunately, this FAA bill represents a departure from 
the bipartisan tradition of this committee that has been 
successful under Chairman Shuster's leadership, and will set--
--
    Mr. Shuster. Would you yield for just a second?
    Mr. Nadler. Yes.
    Mr. Shuster. I would object to that. We have done--much of 
this bill is done on a very bipartisan basis.
    Mr. Nadler. Reclaiming my----
    Mr. Shuster. We have fundamental difference on policy, 
but----
    Mr. Nadler. Reclaiming my time----
    Mr. Shuster [continuing]. Bipartisan.
    Mr. Nadler [continuing]. Much of the bill has, but 
everything is overshadowed by privatization of the air traffic 
control system, and will set back our efforts to modernize our 
aviation system and ensure the safety of the flying public.
    This air traffic control privatization scheme is an extreme 
and risky venture that will hand over control of our airspace, 
in effect, to the major airlines.
    One of the stated motivations is that we need to speed up 
modernizing our airspace and the installation of NextGen 
technology. But progress is finally being made on that front. 
Completely disrupting the ATC system and splitting up the FAA 
will probably set back NextGen implementation by quite a few 
years. So modernization cannot be the real motivation.
    The other stated reason some support this plan is to 
preclude furloughs and delays caused by budget cuts and 
possible Government shutdowns. There is, of course, a much 
safer and simpler solution: Just don't shut down the 
Government.
    Nor should we risk the safety of the flying public because 
a few Members of Congress and Senators--arguably, one Senator 
who is just leaving New Hampshire--want to impose drastic 
budget cuts, or hold the budget hostage in an attempt to enact 
an extreme agenda. And even if this plan were to go through, 
the rest of the FAA, including safety inspectors, would still 
be vulnerable to sequestrations and shutdowns.
    And how can citizens talk to or influence or pressure--
effectively pressure this Corporation? I know they can be 
heard, but they will be ignored with respect to noise or other 
problems.
    Mr. DeFazio and Mr. Larsen have offered reasonable 
solutions to address any legitimate concerns that have been 
raised with respect to airspace modernization and budget 
uncertainty, but so far their suggestions have been rejected, 
which leaves us the only real reason a simple--which only 
leaves us the real reason: a simple, ideological devotion to 
privatizing everything, and eliminating as much Government as 
possible. If air traffic control isn't an inherently Government 
function, what is?
    Proponents of the bill would give away billions of dollars 
in taxpayer-funded assets to the airlines. The FAA--and thus, 
Federal taxpayers--have invested at least $53 billion over the 
past 20 years in capital investments in these assets. Some of 
the same Members who complain about the deficit and rail 
against Federal spending are perfectly willing to give away $53 
billion of Government property to private companies as a gift. 
That is more than we spent on the entire NIH [National 
Institutes of Health] budget last year. That is more than we 
spent last year on the TSA [Transportation Security 
Administration], VA [Department of Veterans Affairs] medical 
services, clean water and drinking funds, section 8, Head 
Start, energy efficiency, and violence against women combined.
    We can't provide $600 million to the Flint water crisis, 
but we can give away $53 billion to the airlines? This bill 
goes beyond the public policy disagreement. It is a complete 
special interest giveaway.
    Supporters of the bill will claim that ATC will be managed 
by a nonprofit entity. But make no mistake, this so-called 
nonprofit will be dominated by for-profit airlines. The same 
companies that nickel-and-dime passengers for baggage and leg 
room will be making decisions about routes, and taxing the 
public to manage the airspace.
    Luckily, there are many groups and Members on both sides of 
the aisle in both chambers who see this plan for what it is, 
and it is worth commending Delta Airlines for acting 
responsibly, and outlining numerous concerns with this 
privatization scheme in a very detailed letter referenced by 
Mr. DeFazio.
    As Delta points out, the U.S. has over 13,000 airports and 
about 7,000 aircraft in flight at any one time. U.S. airspace 
is dense, congested, diverse, and unique. Privatization has 
never been attempted in airspace of this nature, nor should it 
be. Performing an unprecedented and uncontrolled experiment on 
the American flying public will be risky, unsafe, and unfair to 
the flying public and to taxpayers.
    Mr. Calio, the U.K. and Canada have been cited as examples 
of where privatization has been done before. But they both 
receive payment for ATC facilities and equipment they 
transferred to the private corporation. Is privatization so 
important? Would the airlines be willing to reimburse the 
Federal taxpayers for the fair market value of the physical--of 
the assets being transferred, in effect, to them?
    Mr. Calio. It is true that the--there was a reimbursement. 
It was about $1 billion in the U.K., $1.4 billion in Canada. I 
would point out, Mr. Nadler, that the airlines aren't going to 
run this new entity. It is going to be a variety----
    Mr. Nadler. But they will dominate it, effectively.
    Mr. Calio. I don't believe that is true. I----
    Mr. Nadler. All right. We can dispute that. But I asked you 
a simple question. Would the airlines be willing to reimburse--
or would this company reimburse the Federal Government over 
time $53 billion, or whatever the fair market value----
    Mr. Calio. I think it is the beginning of the process, and 
that could be determined down the line. I think you would have 
to look----
    Mr. Nadler. Would you support that in the legislation?
    Mr. Calio. No. Airline passengers----
    Mr. Nadler. OK, thank you.
    Mr. Calio [continuing]. Will pay for----
    Mr. Nadler. Mr. Bolen, I have--I am concerned about how 
consumers will fare under this proposal. It seems consumers 
will have no recourse under this system that would be heavily 
dominated and controlled by the commercial airlines.
    How would the Republican--how would this proposal ensure 
that the commercial airlines are not able to collude, reduce 
capacity, and close out competition? What specific safeguards 
are in place to ensure that this cannot happen?
    Mr. Bolen. I think a lot of the protections are supposed to 
come later. These are things that the board itself, I believe, 
is supposed to develop. But I----
    Mr. Nadler. Supposed to develop. But nothing is guaranteed.
    Mr. Bolen. I think that is a legitimate concern.
    Mr. Nadler. Thank you. My time is expired.
    Mr. Shuster. Thank you. Members, certainly you can use your 
5 minutes in any which-way you want. I would encourage you to 
ask questions. That is what the hearing is really about, 
getting information from our witnesses.
    And I would just answer I do--it is not--the airlines are 
not going to own this equipment. It is still going to be owned 
by a Corporation that is going to be a--it is going to be 
independent, but the airspace is still owned by the American 
people, and this equipment has been already paid for by the 
flying public. Those taxes you pay, that 20 percent of your 
ticket tax, that is what has paid for this system. It is paid 
for.
    Mr. Nadler. Mr. Chairman----
    Mr. Shuster. The problem is, to buy this stuff, if you went 
on the open market, you would probably get 10 cents on the 
dollar because it is so antiquated.
    So again, we are looking for an agency that can go to new 
technology, not stick with this 1950s--yes, I will yield.
    Mr. Nadler. Mr. Chairman, just in response, yes, the flying 
public, or the public paid through a tax for this equipment, 
paid about $53 billion in the last 20 years. I don't know 
exactly what the fair market value is now. It is somewhat less 
than that, I presume. But, nonetheless, it is being given to a 
private Corporation, and that private Corporation should 
reimburse the public for it.
    Mr. Shuster. But a nonprofit Corporation run at the 
benefit----
    Mr. Nadler. Nonprofit or otherwise, it is still a private 
Corporation----
    Mr. Shuster. Run at the benefit of the American traveling 
public.
    Mr. Nadler. As they see it.
    Mr. Shuster. That is as it is, not as anybody sees it. It 
is as it is.
    Mr. LoBiondo?
    Mr. LoBiondo. Thank you, Mr. Chairman.
    Mr. Rinaldi, could you give us a little color commentary on 
what the state of technology is in our towers that air traffic 
controllers are using, and how it matches up with what might be 
available?
    Mr. Rinaldi. Well, we are--thank you, sir. We are behind in 
technology. Canada, the U.K., most of the modern world is using 
more modern technology than we have in our system. Our 
controllers are doing a fantastic job with the equipment they 
have, but the paper flight strips that Mr. Mica held up is a 
perfect example.
    There have been renditions after renditions of the FAA 
trying to move us to an electronic flight strip program, and we 
are still, actually, right now testing one. We have one 
deployed in a Phoenix tower, and we have one in a Newark tower, 
and we are setting requirements. But that will--through the 
procurement process, and certainly through requirements, this 
will be a long, drawn-out process. It will be 2025 when our 
towers will actually start to see, actually, an electronic 
flight strip program.
    Mr. LoBiondo. So just in case anybody missed that, what was 
that year you said when that new technology would appear in our 
towers?
    Mr. Rinaldi. We are looking about 2025, and that is if we 
are funded properly, and that is certainly if the contract is 
written in a way where human factors are actually on the 
forefront so it is--you don't have the cost overrun once it 
gets to the Tech Center in Atlantic City.
    Mr. LoBiondo. So the next question I would like to ask--and 
we had devoted--and I would like to take the time to thank Mr. 
Larsen, because a lot of the--all of the 180 stakeholder 
meetings that we had we did in a very bipartisan manner, and 
that--we tried to get at a lot of the situations that we were 
trying to deal with.
    And one of the things that we looked at was the air traffic 
control shortage that we may be facing. And we didn't really 
get to a conclusion by the--at that stakeholder meeting. Will 
you give us your take on what we are looking at here, and when 
we are looking at it, and what the numbers look like?
    Mr. Rinaldi. They are pretty scary. We are at a 27-year low 
of fully certified controllers through the system. The number 
is 10,760, of which those 10,760, 3,355 of them could retire at 
any moment. That would be--that would cause delays throughout 
the system, because we just would not be able to open up 
positions and open up facilities to run the system as we are 
today.
    We do have 3,229 in some type of developmental training 
status. That status can take any time from 1 to 5 years, 
depending on the facility they are in, and depending on how 
they are progressing through the OGATI program.
    The agency has made a commitment to hire an appropriate 
amount this year. I have no faith that they will hit that 
number, because they haven't in the last 5 years hit their 
hiring mark.
    Mr. LoBiondo. Mr. Poole, did you--looked like you had 
something you wanted to add to that.
    Mr. Poole. Actually, I just--I have written about the 
subject, and even I was shocked today to hear what he said 
about the date for electronic flight strips. I didn't realize--
I knew that there was work going on, but I didn't realize it 
was going to be 2025. That is pathetic.
    Mr. LoBiondo. OK.
    Mr. Rinaldi. Just to clarify that date, they are rolling 
electronic flight strips into a time-based metering and ground-
based metering program, so they are making it more complicated. 
And if they were just to take a system that is off the shelf 
today, that some of the manufacturing companies actually have, 
we could get it a lot sooner. The problem is they are rolling 
it into some broad initiative of time-based metering.
    Mr. LoBiondo. Mr. Chairman, I have additional questions, 
but they would run over my time limit. I will wait for the next 
round. So I yield back at this point.
    Mr. Shuster. I thank the gentleman. With that, I recognize 
Ms. Brown.
    Ms. Brown? Oh, I am sorry, Ms. Brown. Mr. Larsen is next in 
line, sorry about that.
    Mr. Larsen. Thank you, Mr. Chairman. Mr. Poole, thanks for 
being here, helping us out again on this. One day you and I 
will agree on something.
    [Laughter]
    Mr. Larsen. But I wanted to get back to my opening 
statement and ask your opinion about Coldplay--no, about----
    [Laughter]
    Mr. Larsen [continuing]. About defense issues, in 
particular. You have done quite a bit of work on this issue of 
privatization and--but I am wondering if you have thought 
through--beyond a seat at the board, which is what you have 
recommended.
    Mr. Poole. Right.
    Mr. Larsen. But this is really more than just about a seat 
at the board, it is about operations and such.
    Mr. Poole. Sure.
    Mr. Larsen. Have you thought through or done any writing on 
that particular issue?
    Mr. Poole. I have not. I am aware that this subject has 
come up in every single country that has corporatized their air 
traffic control. And in some--the solutions vary. Some of them 
have had civilian controllers take over for the Department of 
Defense controllers, but with still having interfaces, 
obviously, on policy and operations with the defense agency. 
Others have had, basically, co-training to make the two parts 
work together a little more smoothly.
    But, I mean, there is an annual conference on civil-
military air traffic control that is sponsored by ATCA, the Air 
Traffic Control Association, and it was here last November, 
across the river in Maryland.
    Mr. Larsen. Right.
    Mr. Poole. So this is a subject that everyone in air 
traffic control knows a whole lot about, and is continually 
monitoring. It is a subject that every country that is 
corporatized has had to deal with. But I have not studied it in 
any----
    Mr. Larsen. Yes, I can't imagine that the other countries 
that we have discussed today probably have--would have the--to 
the extent that the MOAs [memorandums of agreement] and the 
MOUs exist between FAA and DOD, it is probably a unique pile, 
probably higher than the pile of paper that Mr. Calio has on 
his desk.
    Mr. Poole. It is probably so, given the size of our country 
and the size of our defense budget, yes.
    Mr. Larsen. So then, you couldn't estimate today sort of 
how long it would take to either unwind those and wind them 
back up, or to review and replace and--so that those 
relationships----
    Mr. Poole. Well, my suggestion would be that, as with 
existing contracts, both internal contracts with employees, and 
external contracts with suppliers and so forth, all of those 
would remain in force. You don't just disrupt those at the time 
of transition. They would remain in force and then, over time, 
once the Corporation is up and running, they could be reviewed 
and evaluated and, you know, discussed: Do they still make as 
much sense as they did when the FAA was running the system?
    Mr. Larsen. Yes. There are some issues, though, with 
regards to that very question. And you touched on it earlier, 
you suggested that a more cost-effective air navigation service 
provider would drive down a unit cost and provide services. And 
that has been the focus, cost effectiveness. Not as a criticism 
of the DOD, but a lot of times cost effectiveness isn't the 
primary goal----
    Mr. Poole. Sure, sure.
    Mr. Larsen [continuing]. Of the----
    Mr. Poole. It is a factor, but it is not the primary 
purpose, right.
    Mr. Larsen. It is certainly a factor, but not the primary 
purpose. And so, how--has there been anything--and maybe not 
your thinking. Has anyone else thought about how the DOD would 
reconcile its needs vis-a-vis the Corporation, when--if the 
Corporation is determining cost effectiveness, but the DOD has 
other----
    Mr. Poole. Well, one example is the primary radars, which--
--
    Mr. Larsen. Yes, right.
    Mr. Poole. That is, in effect, a joint operation between 
FAA and the DOD. And the primary radars need to be retained for 
defense purposes, defense and homeland security purposes, 
regardless of whether they are still cost effective for air 
traffic control. So there is a situation which--that 
relationship will remain in some form.
    I agree, details definitely are going to need to be worked 
out on this, and that is why you have a several-year transition 
period before the Corporation would be in full operation and 
full control of a system.
    Mr. Larsen. But then do you--you know, I had all these 
great questions for you. It is hard to ask them, because if you 
haven't thought about these over your 30 years of experience, 
who has thought about these questions over 30 years of----
    Mr. Poole. Well, every other country that has implemented a 
corporatized air traffic system has thought about and worked 
out the relationships. And this is just not something that I 
have--you know, there are a lot of subjects in my portfolio, 
and this is just not one that I have gotten into in detail. But 
I know that it has been dealt with and is being dealt with all 
over the world.
    Mr. Larsen. Well, it just--it seems to me that--this is 
just the beginning of the questions I have about this issue. 
And it actually might be better for the Armed Services 
Committee to explore these issues from a DOD perspective, as 
opposed to the Transportation and Infrastructure Committee 
solely exploring these from a----
    Mr. Poole. Yes, it certainly----
    Mr. Larsen. You would agree with that?
    Mr. Poole. It is their turf also, definitely.
    Mr. Larsen. Thank you. We agree on that.
    [Laughter]
    Mr. Larsen. I appreciate it. I yield back.
    Mr. Shuster. I thank the gentleman. And, again, within this 
bill there is a provision that those contracts go over, 
transfer over, stay in place, and to be worked out with DOD and 
DHS [Department of Homeland Security], those various issues 
you're talking about. So we have a provision there to deal with 
it.
    With that, Mr. Barletta?
    Mr. Barletta. Thank you, Mr. Chairman. You know, when I was 
a little boy, I can remember my father taking me to Connie Mack 
Stadium in Philadelphia. And to go from Hazleton there you 
would have to get on to Schuylkill Expressway. Connie Mack--it 
was a long time, it was back in the 1960s. You know, Schuylkill 
Expressway is like the same Schuylkill Expressway today that it 
was back then. Imagine how many more cars are on the road since 
then. And, you know, I look at passenger rail. It probably 
hasn't improved much in time, either. We go to the airport, 
takes longer to go from point A to point B.
    You know, transportation is important, it is critical in 
our lives, in everybody's lives. Time is money in the business 
community. They are competing in a global economy. But it is 
also--time is also valuable in the lives of everyday people, 
whether they are going on vacation, or they are just going to 
visit a friend or a relative. Delays and cancellations cost 
money, but it costs people time. And America's transportation 
system is falling further and further and further behind other 
countries' in the world.
    I commend the chairman, because it is about time we 
modernize our system, we focus on safety, on efficiency, and 
lowering the cost to the users of the transportation system.
    My question, Mr. Calio, how does a modern air traffic 
control system allow your members to better serve the flying 
public?
    Mr. Calio. In many different ways. First of all, it would 
provide more direct routes, so you get there quicker and 
faster. You could reduce those block times that we talked 
about. People would have a better idea, less time spent at the 
airport. It would be a far more efficient flight, and--which 
would reduce emissions. It would allow us to fly probably more 
routes than we have now, and more choice of routes down the 
line, if you get the system in place.
    Right now we are hamstrung by the system we have. Again, 
well documented both here and by this committee in many 
different cases. I agree with you, the time to act is now, and 
I would also say that, you know, we got right out in front of 
this issue.
    And I would like to make one thing clear. We have said 
before this committee, the Senate Commerce Committee, publicly 
and privately, in terms of how this system operates, as 
Congressman Mica was pointing out, we do pay more than our fair 
share right now. And my members said--and we, again, have said 
this all over the place--we will continue to do that.
    We told Mr. Bolen's people, you know, we don't care about 
what you pay. And, you know, I would like to correct--Mr. Bolen 
says they pay 8.5 percent. He is including commercial activity 
in that. It is not--what his members pay is not quite that. So, 
long story short, we will pay--we will continue to pay. Paying 
is worth it, if we get a better system, arming Mr. Rinaldi's 
controllers and getting more controllers to do the job that 
should be easier than it is for them.
    Mr. Barletta. Any time you want to do something big there 
are issues. But they are not issues that can't be overcome. And 
I wish, you know, we all sit and realize that. You know, if it 
was easy, somebody else would have done this already. And it is 
not easy. But I don't believe we should be throwing the baby 
out with the bath water. Thank you. Thank you, Mr. Chairman.
    Mr. Shuster. Thank you.
    Mr. Capuano?
    Mr. Capuano. Thank you, Mr. Chairman. Mr. Chairman, is 
Representative Young in the room? Because I was actually 
considering yielding my time to him. But----
    [Laughter]
    Mr. Capuano. Don Young, did he--I was thinking about it, 
but I guess not.
    Mr. Chairman, I guess--here is my problem. I think we have 
a pretty good system. Can it be improved? Of course it can be 
improved, anything can be improved. We have the safest system 
in the world, most complicated system in the world. And most of 
my complaints about flying is that my knees are too close to my 
person in front of me, that I am squeezed like this, that I 
have to pay for overhead, I am about to probably have to pay 
for the oxygen, but that is--those are other complaints that 
the FAA doesn't have much to do about.
    My complaints don't really go to the system. Can it be 
better? Of course it can. And I really look forward to the 
point where we get over this obvious bump in the road and get 
to the rest of the bill that we pretty much agree on.
    But in the meantime, Mr. Poole, do you own an automobile?
    Mr. Poole. Yes, I do.
    Mr. Capuano. Could I have it?
    [Laughter]
    Mr. Poole. No.
    Mr. Capuano. Why not?
    Mr. Poole. Well, because it is mine, and I paid for it.
    Mr. Capuano. Ah. But the taxpayers are supposed to give 
over billions of dollars of property to a private----
    Mr. Poole. Well, those--the general taxpayers did not pay 
for this. Aviation taxpayers paid for it through aviation 
excise taxes, so----
    Mr. Capuano. See, as a Libertarian, I think any time the 
Government says, ``I am reaching in your pocket,'' call it 
whatever you want, it is a tax. And when the Government reaches 
in my pocket as a passenger, and says I have to pay this fee, 
this fee, this fee, call it what you want, it is a tax when the 
Government makes me pay that. And I am not opposed to that.
    So, therefore, I did pay for it. And yet this bill would 
have me give it away. I think you should give me your car.
    Mr. Poole. Well, the problem with that--I mean there is a 
practical problem, in that if you say--put some arbitrary 
value--let's say--call it $10 billion. If you put that into the 
cost base of a system that is going to be supported by fees and 
charges paid by airlines, that gets incorporated into the cost 
of operation----
    Mr. Capuano. I know it is expensive, but why won't you give 
me your car?
    Mr. Poole. Why would you do that? Why would you make it----
    Mr. Capuano. Why won't you give me your automobile? All 
right, I won't take your automobile. How about your suit?
    [Laughter]
    Mr. Capuano. You don't give things away, nobody does. And 
neither should the Government. So that is one minor little 
problem.
    But I guess--can anybody tell me--my biggest problem with 
the FAA--and I am no lover of the FAA, I have had problems with 
them, and the air traffic controllers have been great help to 
me on my local issue. I have Logan Airport in my district, and 
I have a very urbanized area. And, like everybody here who 
lives near an airport, I have problems underneath the flight 
paths of people complaining about noise. It is not new. It is 
trying to find a balance.
    And the air traffic controllers have been great, educating 
me on what can and cannot be done reasonably to try to address 
those issues. And I am trying to get the FAA to be as 
reasonable as other people have been in trying to attempt to 
get planes where they need to go, understanding there are real 
people who live under those flight paths and deserve some 
consideration.
    Who would I call when there is a private company and when I 
have those complaints and I have those issues? And why would 
the private company give a hoot about my constituents? They 
would only be interested, as private companies are and should 
be, in the bottom line. Who do I call? Who----
    Mr. Calio. The FAA will still have control over routes and 
procedures. You would call the FAA. You could--also can call 
the EPA, because NEPA [National Environmental Policy Act] stays 
in place.
    Mr. Capuano. Well, EPA hasn't been helpful at all. And, by 
the way, the FAA--this is the part of the FAA that I think is 
broken. I would really rather work on this part of it, to get 
to fix that, than the parts that we are doing with this bill.
    I don't see how a private entity could possibly care--or 
should care, again, that is not their role--in the interests of 
the general public who live underneath these flight paths. And 
my big concern with NextGen? It used to be funding it and 
whether it is worth it or not.
    Now it is OK, we have got it, and it is kind of hindered 
and harmed, the quality of life of the people under those more 
narrow flight paths. And up until this point, no one seems to 
care except the elected officials. And I don't think this is 
going to improve that, or get anybody else to care about that. 
I don't see how this could work.
    And again, I look forward to getting past this issue and 
back on track to get another FAA reauthorization bill done that 
we can all agree on. And I think it is here, in the substance. 
Just move it a few inches aside. Thank you, Mr. Chairman.
    Mr. Shuster. Thank you. With that, Mr. Graves.
    Mr. Graves of Louisiana. Thank you, Mr. Chairman. I will 
reserve the balance of my time.
    Mr. Shuster. Mr. Ribble?
    Mr. Ribble. Thank you, Mr. Chairman. I think, first of all, 
we need to kind of put--or set aside some myths that have been 
going on. I have heard it both on the other side, I have heard 
it from some of our panelists related to--that the problems 
with the FAA are in part centered around Government shutdowns 
and inconsistent funding.
    In the last four decades there has only been 50 days of 
Government shutdowns. Over 14,600 days, there has been 50 days 
of Government shutdowns. And some of those the FAA was exempt 
from. So that is a tiny, tiny number, about 1 day or 10 days 
per decade. The Republic will survive.
    Secondly, on funding, we talked about inconsistent funding. 
I am not going to give you budget numbers, I am going to give 
you appropriated numbers. In fiscal year 2013 they were funded 
at $15,238,000,000. In fiscal year 2014, $15,734,000,000. In 
fiscal year 2015, $15,847,000,000. And in fiscal year 2016, 
$16,011,000,000. So each year the funding has been relatively 
consistent, and has been growing modestly every single year. 
And so, our problems with the FAA are not because they have had 
inconsistent funding, or irregular funding, or Government 
shutdown. It has been more of what the inspector generals and 
Government Accountability Office has talked to us about.
    Now, related to this fix, whether the fix is the right fix 
or not the right fix, I think that is all up for debate. And I 
think that we can try to figure out how in the world we can 
move forward and actually get a fix that actually works for 
everybody.
    First of all, Mr. Rinaldi, air traffic control workers have 
done, really, quite an extraordinary job.
    Mr. Rinaldi. Yes, they have.
    Mr. Ribble. I mean, I----
    Mr. Rinaldi. They are outstanding.
    Mr. Ribble. You need to know that when I get on an 
airplane--and I get on an airplane every single weekend to fly 
back to Wisconsin and then back to Washington, DC--safety never 
enters my mind. And so I want to commend the air traffic 
controllers for how good they actually are.
    Mr. Rinaldi. Thank you, sir. I appreciate that.
    Mr. Ribble. You are welcome. And I think they will continue 
to be good, even if we have a different structure. And just 
because Government is out of the way and a not-for-profit 
organization is running it doesn't necessarily mean safety or 
things go bad.
    In fact, if Government shutdowns are, in fact, a problem, 
maybe we just get the Government out of the way and then there 
would be no shutdowns. But I just wanted to make it clear that 
your team and the workers that do this every single day have 
been doing a terrific job. And I want you to know that.
    Mr. Bolen, you mentioned numerous times in your testimony 
both written and spoken today that one of your concerns is 
turning over this new, not-for-profit organization to the big 
airlines, because they will have, in essence, 50 percent of the 
board for representatives, and then someone from the airline--
--
    Mr. Bolen. Well, they will have effective control.
    Mr. Ribble. Yes, effective control. But yet I thought I 
heard you say when you were asked a question, ``Would you 
restructure the board then,'' you said no. Did I misunderstand 
you?
    Mr. Bolen. Well, I think the scope of power that is granted 
to the board should not include things like taxing authority. 
It should not include things like the ability to determine who 
can fly where and when. So there are some fundamental issues 
that go beyond just the structure of the board and the number 
of seats.
    Mr. Ribble. OK.
    Mr. Bolen. So, you know, I think that is kind of a 
fundamental question, is should a board reflect the public's 
interest, and will it. And certainly currently, as it is 
structured, I don't believe that is what this bill does.
    I think trying to fix it raises some questions about what 
is the scope of the authority that we have turned over. Taxing 
authority, as was said by the first Chief Justice of the 
Supreme Court, the ability to tax is the ability to destroy. 
And whether you call it a rate or a charge or a fee or anything 
else, that is what we are talking about doing by giving this 
board the ability to set rates and charges.
    Mr. Ribble. Mr. Bolen, wouldn't that basically--wouldn't 
moral hazard come into play then, and consumers would respond 
to it?
    Mr. Poole. Well, let me answer that. I object strenuously 
to characterizing this as giving taxing authority. A tax is 
something only Government can do, and I agree with Mr. Bolen on 
that point. But let me give you the example.
    The Government owns a utility called the Tennessee Valley 
Authority. It sends electric bills every month to its customers 
for the services that they purchase. Similarly, an air 
traffic--a federally chartered nonprofit air traffic 
Corporation would send bills to its customers for the services 
that they deliver to it. That is a charge, just like an 
electric utility bill. It is not a tax in any way, shape, or 
form, legally or in any commonsense interpretation.
    So, I think this is really distorting the reality of what 
is proposed here. It is proposing to create a nonprofit 
utility, not a taxing agency.
    Mr. Ribble. All right, thank you very much. Mr. Chairman, I 
am out of time, I yield.
    Mr. Shuster. Thank you, Mr. Ribble. Where am I? Mrs. 
Napolitano?
    Mrs. Napolitano. Thank you, Mr. Chairman. There are a lot 
of good provisions in this bill regarding safety, technology, 
and addressing the concerns of the local communities over the 
Metroplex flight routing plans. But, unfortunately, the bill 
also includes several poison pills that I cannot support, and 
find very objectionable.
    One of them--and I strongly oppose the inclusion of section 
611, which overturns a Federal court decision that protects 
meal and rest breaks for truckers, truck drivers, as required 
by California law. And it is a law in 21 States. On July 4, 
2014, the Ninth U.S. Circuit Court of Appeals ruled that 
trucking operations in California must allow for 30-minute meal 
breaks after 5 hours of work, and a 10-minute rest break after 
4 hours of work, a very reasonable standard when you consider 
that truck drivers can be subject to 14 hours of on-duty time.
    Section 611 would not only preempt California's law with 
regard to trucking operations, but would also preempt laws in 
these other 21 States and territories that currently guarantee 
a meal break. States are Colorado, Connecticut, Delaware, 
Illinois, Kentucky, Maine, Massachusetts, Minnesota, Nebraska, 
Nevada, New Hampshire, New York, North Dakota, Oregon, Rhode 
Island, Tennessee, Vermont, Washington, West Virginia, Guam, 
and Puerto Rico.
    States should be allowed to set their own meal and break 
standards as they see fit for the health and safety of their 
workers and of the general public. This section has no place in 
this aviation bill, as it is a provision that was addressed in 
the motor carrier labor standards, which we already debated in 
the FAST Act, the transportation bill currently just passed. 
And the conference committee wisely agreed that we should not 
interfere with State laws. This provision was not included in 
the final FAST Act.
    And, Mr. Chairman, I will be offering an amendment with my 
colleagues, Ranking Member Norton and Mr. Nadler, to strike 
this section from the bill. I urge my colleagues to support it.
    Secondly, I have strong concerns and do oppose the 
proposals included in this bill that privatizes our air traffic 
control system. I have visited several of my small areas and 
talked to the traffic control persons, and they may have 
challenges, but it is still the safest and most efficient in 
the world, when you consider how many flights per day operate 
in our country.
    One of the greatest challenges facing our air traffic 
control and aviation system is a lack of investment by 
Congress, by this Government, in new technology, safety, and 
our airports. We should be using this bill to address our 
investment challenges and give our airports the tools to 
increase investment and raise the cap of passenger facility 
charges if local agencies want to raise the revenue for airport 
improvement.
    Mr. Chairman, I want to show this chart that was prepared, 
the comparison of air navigation service providers.
    [Chart]
    Mrs. Napolitano. And, as you can see, the United States is 
way ahead, and 15,539,009. This is in movements--compared to 
the United Kingdom and Canada, which are not even half. And the 
smaller number of airplanes is 209,034, where--this is the 
number of general aviation aircraft, and you should have it 
somewhere up there, too--whereas the closest one is the United 
Kingdom at 1,480. This is just not a comparison.
    And then, when we have the big giveaway, value of assets 
for Canada is $3 billion, of the United Kingdom is $1.3 
billion, and in the U.S. is $53 billion. Not quite the 
comparison that I would say is adequate.
    I have concern the new air traffic controller system would 
address recruitment, retention, and training of a diverse air 
traffic control workforce. It is a giveaway, and I think one of 
the issues I have is the flight paths that I have taken up with 
FAA.
    And, Mr. Rinaldi, under this privatization proposal what 
requirements and standards will apply with respect to the 
organization's recruitment and retention of a diverse 
workforce? And how will the proposal work in maintaining 
standards for training air traffic controllers, and making sure 
they are prepared and fit to protect our Nation's skies? And 
who will be in charge of and make those decisions?
    Mr. Rinaldi. Thank you, Congresswoman, great question. I 
believe, by bringing all of the negotiated agreements and work 
agreements over intact, and having a robust transition period 
to work all these issues, to make sure we have no unintended 
consequences on the safety and efficiency of the system, and to 
ensure that we continue to hire diverse--in a diverse pool, and 
make sure that we are training properly and using modern 
technology for training tools--right now our training system is 
pretty antiquated. And using modern technologies for training, 
we can, you know, hopefully streamline the training and speed 
it up to the point that we can actually see a controller be 
fully certified in less than 5 years.
    Mrs. Napolitano. Thank you. Well, there is a lot of other 
questions I would have, Mr. Chair, but I really thank you for 
bringing this forth. I yield back.
    Mr. Shuster. I thank the gentlelady. With that, Mr. Massie 
is recognized.
    Mr. Massie. Thank you, Mr. Chair. And, Mr. Rinaldi, I just 
want to reiterate something my colleague said earlier, that air 
traffic controllers, particularly in my district, do a 
wonderful job, and we feel very safe with your men at the helm, 
and women.
    I want to ask you the first question, though. I was able to 
go into an air traffic control tower at CVG [Cincinnati/
Northern Kentucky International Airport]. And the first thing 
that struck me, besides the professionalism of your crew, is 
the antiquated technology. I mean it looked like a computer 
room from the 1980s, and that is being kind. Could you share 
with us what sort of tools that you would like to have that the 
FAA has not incorporated into the air traffic control regime, 
and what the benefits of those are?
    Mr. Rinaldi. Sure, I--you know, I think one of the first 
things that we talked about were our electronic flight strips. 
I think when you went into the facility, you probably saw them 
walking around with pieces of paper, and that a controller that 
was working one position would walk a piece of paper to another 
controller, and then they would walk it around as the airplane 
was moving throughout the airport movement area. And then, 
eventually, once the airplane took off, then it would be either 
some type of manual way to get the information to the radar 
controller. That would be--to us, that is the technology. It is 
hard to even say that is modern technology.
    In the Nav Canada world, they have been working on this, 
working with this for 20-plus years. They are selling it around 
the world. I mean if you ask how would we enhance the tower 
environment, that would be something, certainly, we would do.
    Our radar environments in our large centers and our 
TRACONs, how we would enhance that is to give us, you know, 
more tools and modern technology, better voice switch systems. 
And, most importantly, better staffing. We are crucially, 
crucially--at this point with our staffing our controllers are 
having tough times to get breaks, take time off, to make sure 
they have appropriate amount of, you know, fatigue mitigation 
going on. Our staffing, we must address the staffing of our 
facilities, and that is a deep concern of ours, as we move 
forward.
    Mr. Massie. Thank you.
    Mr. Poole, I don't think there has been enough time 
dedicated in this hearing to the sorts of technological 
advancements that we have missed out on in this country, in air 
traffic control, and what the advantages of those would be, and 
that we have seen in other countries. Could you talk to that?
    Mr. Poole. Well, one of the most important is data link, 
controller-pilot data link, which substitutes electronic 
digital information about changes in altitude and things like 
that for voice transmissions. Voice transmissions are subject 
to errors, mishearing, static on the line, and so forth. It is 
a safety problem in some respects. It is also--it slows things 
down if they have to repeat the communication because of 
interference, and so forth. So that is another big one that is 
already operational, nationwide, in Canada, and has been for a 
couple of years.
    Nationwide, data link in this country is probably the early 
2000s, at best--2019 is the starting point, as I believe. Is 
that right, Paul?
    Mr. Rinaldi. That is about correct.
    Mr. Poole. So typically, it takes years to roll this out to 
all the facilities. So that is another--that is a good example.
    The chairman mentioned earlier--I am not sure if you were 
here then. Nav Canada is the lead investor with Iridium 
Corporation in developing global satellite-based ADS-B, which 
provides radar-like separation in oceanic and polar airspace, 
where currently, for the most part, you have huge boundaries 
around how far apart--how close flight tracks can be, and the 
altitude separation, and so forth, because of the inaccuracy of 
knowing exactly where the planes are in real time.
    With ADS-B over the oceans, thanks to satellites, it is 
just as if they were over land, and you can space flight tracks 
close together, people can get the optimum altitudes for 
minimum fuel burn, and things like that.
    Mr. Massie. And would----
    Mr. Poole. Huge benefit.
    Mr. Massie. Would those advantages be available to general 
aviation, as well?
    Mr. Poole. That will be available to anybody who equips 
their plane to have ADS-B, which is required by 2020 in this 
country. So, yes, it would be available to all GA, as well.
    Mr. Massie. So, what leads you to believe that we are going 
to see these advancements if we pass this bill?
    Mr. Poole. Well, I mean, the difference is you are going to 
have an organization dedicated to providing the aviation 
customers with the best cost-effective technology as soon as 
possible. And it will have its own private-sector kind of 
procurement system, not Government procurement methodology, not 
the kind of long, cumbersome process that leads--by the time a 
new system gets implemented into the field after these long, 
long procurement periods under the current regime, a lot of the 
technology is already obsolete.
    You need to have a system developed where you have 
continuous incremental improvements to take advantage of 
rapidly changing technology in all of these areas. And the FAA 
is incapable, it appears, to have that kind of a system because 
of their long, cumbersome, bureaucratic processes.
    Mr. Massie. Well, I like your model, that they need to 
think of themselves more as a customer service utility----
    Mr. Poole. Yes.
    Mr. Massie [continuing]. Instead of just a safety 
organization whose only customer is Congress.
    But, Mr. Chairman, my time has expired, and I yield back.
    Mr. Shuster. I thank the gentleman. And I don't know if I 
heard you--you talked about the deployment of the Canadian--
that their--that organization. They are going to have 100 
percent of coverage of worldwide airspace by the end of 2017.
    Mr. Massie. So we may be renting their system.
    Mr. Shuster. Very much. Today 30 percent of the world is 
covered. With the deployment of their technology, they will 
have 100 percent coverage. They have already had--I believe the 
number is 15 other countries have already signed up, they are 
going to subscribe to use their airspace, and it is going to be 
more efficient than our space. So that is something that, you 
know, we need to look at. So, thank you.
    With that, Mr. Lipinski is recognized.
    Mr. Lipinski. Thank you, Mr. Chairman. I want to start by 
thanking you for the exemplary way that you put together--
leaving aside the ATC part--putting together the rest of this 
bill. It doesn't mean I won't have any amendments tomorrow, but 
it will be far fewer than the 19 I had on the FAST Act.
    First thing, a question of who should the FAA serve, 
because that seems to be something that is floating around. I 
am--I was very happy to hear the chairman say that it is the 
flying public they should serve. It seemed that Mr. Poole might 
have been suggesting that that is not, because he said the FAA 
shouldn't have safety as the number-one priority. I think it 
needs to be the number-one priority, because that is--they are 
serving the public, and that is their number-one priority.
    We need to have airlines that are successful in this 
country, in order that we have a successful aviation industry, 
it could move people around. But it is important, I think, that 
the flying public is the--is who is served by the FAA, served 
by ATC.
    And Mr. Calio seems to suggest that, well, the A4A should 
have a super-majority, so they are really giving something up 
by only having four seats on the board. But that is assuming 
that the A4A is who ATC--who their customer--who the primary 
entity they should serve. And A4A is simply an organization 
that represents not all of the airlines--although maybe the 
three I fly are all in the A4A, maybe that would be good for 
people flying in and out of Chicago. But let's keep our eye on 
we should be serving the flying public. That is what the air 
traffic control should be doing.
    Now, noise issues. We have gone over this. I just want to 
make--be clear on this, because we had a discussion on it, but 
the bottom line--we have heard people can go to the FAA, 
because they are still the regulator, if there are noise 
issues.
    Does the FAA have any authority to require this private 
Corporation to change their routes, or to change anything that 
would lower any--or eliminate noise problems, or try to--does 
the FAA--will they have the--OK, people can go to the 
regulator. Do they have any authority here, with the 
Corporation? That is a big thing that has been missing. We have 
been told you can go to the regulator. But can they do 
anything? Does anyone have any----
    Mr. Rinaldi. Well, I think if you--and I am going to answer 
in simplistic terms, because I don't know the exact answer to 
your question. But if we bring everything over as is, the 
approaches, the flight paths, and as is into this not-for-
profit Corporation and don't make any changes, then the noise 
complaints that you are getting today are as you were getting 
them then.
    If there are any changes that we were going to do to 
modernize the system, that would have to go through the 
regulatory safety and certification function of the FAA for 
approval.
    Mr. Bolen. Mr. Lipinski?
    Mr. Lipinski. So you--yes?
    Mr. Bolen. At least in Canada they don't have that. And, as 
I understand from this bill, airspace redesign is not subject 
to that review.
    Mr. Lipinski. All right, thank you. I have to move on, just 
because of time.
    Mr. Calio. Excuse me. That is just not true. First of all, 
you could go--a consumer or someone aggrieved about noise could 
go to the FAA and through--to the Environmental Protection 
Agency. The NEPA protections stay in place, they don't 
disappear. That is what currently exists under the system.
    Mr. Lipinski. I am not sure that would cover all of it, but 
we can have a further discussion on that.
    Now, the legislation allows an air traffic service user to 
file a complaint with the Secretary that a fee increase is 
unreasonable. An ``air traffic service user,'' does this 
include an airline customer? Are they included in that, in this 
bill? Is that how air traffic service user is defined, or is it 
just the airlines?
    Mr. Poole. My understanding is it is those who pay the 
bills. And those who pay the bills would be airlines and 
anybody else that is a commercial operator, not----
    Mr. Lipinski. So the flying public should--and I think--
before I move on to the next question, I think we are getting 
this--this idea keeps getting thrown out that the airlines are 
paying the bills. But who pays--who really pays them? They have 
to be passed on to the flying public. They are not just eaten 
by the airline. It goes in. So--and I certainly think that the 
public should have more of an input here.
    Now, the last question is about insurance coverage. The 
bill says that the new entity must maintain adequate insurance 
coverage. Nav Canada currently maintains a roughly $5 billion 
policy, according to the 2015 annual report. How much coverage 
do you expect that a new entity in the U.S. would have to have?
    And I also notice that Canada maintains an indemnification 
program at no cost to Nav Canada to protect it from terrorist-
related loss that may be in excess of the insurance coverage. 
So how much do you think that this Corporation is going to have 
to have in the insurance company? And then, will the Government 
still have to have an indemnification program?
    [No response.]
    Mr. Lipinski. Is anyone----
    Mr. Rinaldi. From what I understand--and I am not an expert 
in the insurance business at all--I do know that the Nav Canada 
system is set up for the unthinkable to happen, and litigation 
coming down. The fact that we run about 10 percent--they run 
about 10 percent of the traffic that we do, you would think 
that might be about, you know, 8 to 10 times more than that. 
Not an expert in insurance by any stretch of the imagination.
    Mr. Lipinski. All right. I ran through this very, very 
quickly, just because of lack of time. A lot of questions. I 
thank you for your answers. We need--I think we should be doing 
something, looking at how we can make changes to make things 
move more quickly forward, especially NextGen, but I still have 
questions about the proposal that we have before us.
    With that, I will yield back.
    Mr. Shuster. Mr. Graves?
    Mr. Graves of Louisiana. Thank you, Mr. Chairman. This bill 
has been an interesting endeavor, and all the meetings that we 
have had over the last several weeks, trying to understand this 
bill. It is very disappointing to see the loss of the bromance 
between our chairman and ranking member, and I hope that you 
all are able to rekindle the flame.
    Mr. Poole, what kind of car do you drive?
    [Laughter]
    Mr. Poole. I drive an Infiniti G37.
    Mr. Graves of Louisiana. Whoa. I was trying to decide if I 
was going to ask you for your car, as well, and that is 
definitely an upgrade from mine. That informs my decision.
    No, but seriously, going back to the gentleman from 
Massachusetts' line of questioning earlier, he asked about if 
you would give him your car. But in reality, under this 
legislation, the car--there is not an ask of Congress to 
effectively just hand over your car without any type of----
    Mr. Poole. No.
    Mr. Graves of Louisiana [continuing]. I guess, continued 
service. And this--perhaps a comparison would be something more 
along the lines of you are giving access to your car to someone 
else, but they are continuing to provide you with car service, 
effectively. And the idea is that they will do a better job 
maintaining your vehicle than you are doing. Is that----
    Mr. Poole. That is a reasonable analogy, certainly, yes.
    Mr. Graves of Louisiana. OK, great, thank you. Look, I got 
to be honest. The whole paper strip idea is very, very 
concerning. It really is. I mean what happens if I drop one in 
between the desks? What happens there?
    Mr. Rinaldi, I certainly appreciate your comments and 
commend you and your organization for the great and safe air 
service we have, but it is important for us to recognize we 
can't rest on our laurels, that we need to continue to 
innovate, we need to continue to make sure that we improve upon 
safety, we improve upon our records.
    And I do have strong concerns about the current service 
that we have, in terms of the billions of dollars that have 
been spent upgrading to--attempting to upgrade to NextGen 
without actually seeing the results. I think the ranking member 
used to refer to it as NeverGen at one point, and there are 
fundamental concerns there.
    Mr. Poole, would you be willing to give Government control 
over your personal finances, yes or no?
    Mr. Poole. No, I certainly would not.
    Mr. Graves of Louisiana. All right, thank you. I mean the 
point is I have been here about a year, and I am not sure that 
I have seen many things that the Federal Government actually 
does really well. And there are models out there where you see 
significant improvements.
    Mr. Poole, some of the meetings I have had, general 
aviation has raised concerns about shifting costs over to the 
general aviation community. But under the bill it seems that, 
unless they cross over into a profit or commercial-type 
activity, they are largely held harmless. Is that accurate?
    Mr. Poole. That is correct. I mean the distinction that is 
drawn in the bill is between commercial and noncommercial. And 
commercial has historically been defined in U.S. aviation law 
and practice as selling services to passengers.
    Mr. Graves of Louisiana. OK.
    Mr. Poole. So Exxon Mobil's Gulfstream is defined as 
noncommercial because they are not selling the service to 
anybody, they are simply using it themselves.
    Mr. Graves of Louisiana. OK.
    Mr. Poole. And, in my view, Exxon Mobil should pay a user 
fee if they are going to fly their Gulfstream in U.S. airspace, 
but that is not the way the bill is written, so----
    Mr. Graves of Louisiana. I know the--I am not real sure who 
to direct this to, but Louisiana, where I am from, we are 
susceptible to hurricanes and disasters, and things along those 
lines. Can someone help me understand? If we have a situation 
like we have had in the past, where a hurricane comes through 
and you destroy a tower, who in that case would be responsible 
for the rebuilding and restoration of that facility?
    Mr. Poole. Well, it certainly would be the Corporation. 
That would be part of its capital budget.
    Mr. Graves of Louisiana. So there would be no expectation 
that taxpayers would come in and----
    Mr. Poole. No, not at all, no.
    Mr. Graves of Louisiana [continuing]. Kick in to cover 
that?
    Mr. Poole. That is part of the point.
    Mr. Graves of Louisiana. OK. Mr. Calio, could you address 
oversight issues? And I will tell you it is a strong concern of 
mine that Congress continue to have a role in oversight, 
considering that this is a Federal asset. And, obviously, 
strong public interest there. Can you share a perspective on 
how you expect this committee and others to conduct our 
oversight responsibilities under this legislation?
    Mr. Calio. Sure. Chairmen Shuster and LoBiondo's proposal 
would focus the oversight of the Congress and the FAA on the--
on safety, which is where it belongs. That is what we do best, 
is what the Government does best, is regulate safety. That 
would put oversight of the flying public and the airspace in 
the same position as all the other modes of transportation that 
are underneath this committee.
    If you look at the NTSB [National Transportation Safety 
Board] as an example, the Federal Railroad Administration, this 
committee has oversight there, as do other committees, but not 
over the operator of the system. You know, and that, again, is 
international best practice. Over 60 countries, developed 
countries, have that kind of system in place where you separate 
the air traffic operation from the safety regulator. And it is 
done because there is considered to be an inherent conflict of 
interest in keeping the two in the same place.
    Mr. Graves of Louisiana. Could this--I am sorry, last 
question--could this Corporation sell the assets if they are--
under this legislation, could they sell the assets and profit 
from that? Anyone have a--Mr. Poole?
    Mr. Poole. The answer--it is clearly spelled out in the 
legislation that they can dispose of assets considered to be 
surplus to the business purpose of air traffic control. But 
they are required to--I mean, since it is a nonprofit 
Corporation, the proceeds from those assets would go toward new 
capital expenditures, modernization, facility consolidation, 
and this sort of thing. It is not like they would be putting it 
in their pockets and walking away with it.
    Mr. Graves of Louisiana. Thank you. Thank you, Mr. 
Chairman.
    Mr. Calio. Can I make one point about these assets we keep 
talking about? They are mostly antiquated or don't work, and 
they have significant liabilities attached to them. So this is 
not a zero-sum game.
    Mr. LoBiondo [presiding]. Mr. Sires?
    Mr. Sires. Thank you, Mr. Chairman. First I want to commend 
the chairman and the ranking member for all the hard work, and 
the committees that worked on this. You know, there are a lot 
of good things on this bill, but there are some things I just 
can't live with.
    First, I represent part of Newark Airport. For my 
constituents, noise is a big issue. And I would like to follow 
up on what my colleague, Mr. Lipinski--in terms of flight 
patterns. I mean we not only have problems with airplanes, I 
got problems with helicopters in my district. And I have been 
fighting the flight patterns of these helicopters for over 2 
years.
    So, I was just wondering. Who do I turn to when I have all 
these issues? And why does it take so long if you have such an 
issue? Is it going to take longer now, if you privatize this? 
Because, as it is now with the FAA, it takes a long time to get 
things changed. So I was just wondering if anybody can answer 
me.
    Mr.----
    Mr. Calio. Mr. Sires, as I said earlier, the avenue would 
still be to go to the FAA first, and to the Environmental 
Protection Agency, because the NEPA provisions stay in place.
    Additionally, I would point out that, you know, there are 
noise problems across the country, and we, the airlines, are 
very sensitive to those. And we will try to work closely with 
the FAA, and sometimes we actually take the lead in trying to 
resolve these problems, because it is not in our interest to 
have a lot of unhappy people.
    Mr. Sires. But on this board that makes all these decisions 
that you are going to have with this privatization, there are 
no consumers on that board, right? Are there any consumers on 
the board? Does anybody know?
    Mr. Poole. It is not called out that way in the 
legislation, but there are two public interest representatives 
to be appointed by the Secretary of Transportation. So those, I 
would presume, would be intended to represent----
    Mr. Sires. How did we come up with four members of the 
airlines, anybody know?
    Mr. Poole. Have to ask the----
    Mr. Sires. I mean it seems like an awful lot.
    Mr. Calio. Well, to many people, two general aviation seems 
like an awful lot, given the use of the airspace, and who pays 
what for the airspace, and the number of people flying. We do 
27,000 flights and 2 million people a day, and 50,000 tons of 
cargo a day. And, you know, frankly, we thought we should have 
more seats.
    And I do not agree with Mr. Bolen's notion that there is 
going to be some kind of conspiracy between the pilots, the air 
traffic controllers, and the airlines. I mean if we want to 
talk about that, maybe we should move this debate down to 
Dealey Plaza and talk about that way in the future. You know, 
it----
    Mr. Sires. But, I mean----
    Mr. Calio. Four seats is less than representational of the 
use of the airspace and the contribution to the----
    Mr. Sires. Would you say you move 2 million people a year? 
Is that what you said to me?
    Mr. Calio. No, a day.
    Mr. Sires. A day?
    Mr. Calio. Day.
    Mr. Sires. And don't you think they should have a couple of 
seats in there?
    Mr. Calio. There are seats for the public interest. And I 
would also say this is the beginning of a process, and it is a 
time to talk about----
    Mr. Sires. You are not going to give up seats in the 
future. That is not--you know, whatever the progress takes us--
you know, whatever the process takes us, I don't think anybody 
is going to give up seats.
    Mr. Calio. I think we represent the most people who fly.
    Mr. Sires. Mr. Rinaldi, are you comfortable that when you 
are negotiating you are prepared to negotiate with a corporate 
structure, rather than the current structure that you have now 
to negotiate?
    Mr. Rinaldi. One of the things--thank you, sir. One of the 
things we wanted to make sure that was captured in law was a 
fair negotiating process with mediation and binding 
arbitration. And, as it stands now, that does carry over. That 
is something we will watch closely. Because if that is not a 
part of the bill, then we would have a big problem with it.
    Mr. Sires. And are you comfortable? You said now you have a 
27-year low in the number of----
    Mr. Rinaldi. Air traffic controllers----
    Mr. Sires. Air traffic controllers.
    Mr. Rinaldi [continuing]. Fully certified----
    Mr. Sires. Are you comfortable that, with this new 
structure, you are going to be able to build that number?
    Mr. Rinaldi. Well, listen. I am not comfortable with the--
--
    Mr. Sires. Because----
    Mr. Rinaldi [continuing]. FAA, that they could actually get 
us our numbers back up to speed. And so, what we are trying to 
do is make sure we have stable, predictable funding, to make 
sure that we still continue to hire controllers. And we--quite 
possibly in this process we can break down the lines of 
business and the stovepipes within the FAA that really don't 
want the end result, don't focus on the end result, they just 
focus on their task.
    So HR [human resources] in the FAA are concerned about 
processing applications, they are not concerned about the other 
road to make sure that we are getting fully certified air 
traffic controllers down into our facilities.
    Mr. Sires. And I would just--I don't have time to ask 
questions, but I would like to make an observation. Everybody 
keeps throwing Canada into our faces, whether it is health care 
or whether it is this bill. I mean Canada--what, 40 million 
people? It is a lot easier to set up a system for 40 million 
people, especially a health system for 40 million people than 
for 300 million people. So, you know, we have a lot more 
flights and a lot more complicated systems here than Canada 
does. And this is the safest.
    And I must compliment the air controllers. I mean I have 
been to the tower in Newark. I think I would have a headache 
right after an hour working in that place, you know, these 
little things going on the board there. And as far as the 
airlines, you do a great job. But I wish you will think of 
people being taller than 5 foot 2 inches. I mean I have no room 
in my legs for any of--you know? That is not a knock on you.
    Mr. Calio. Are you saying----
    Mr. Sires. No, that is not a knock on you, I am just 6 foot 
4 inches.
    [Laughter]
    Mr. Sires. Thank you very much.
    Mr. Calio. I am a little sensitive.
    Mr. Sires. Thank you for your time, sir.
    Mr. LoBiondo. Mr. Rokita?
    Mr. Rokita. I thank the chairman. Nick, how tall are you?
    Mr. Calio. Privileged information.
    [Laughter]
    Mr. Calio. Not as tall--I found out recently not as tall as 
I used to be.
    Mr. Rokita. I have heard stories about that. I want to 
thank the chairmen for their leadership--and I use that term 
specifically, because that is exactly what this exercise is, it 
is one in leadership. And we are trying to solve a problem 
here. And as a user of the airspace myself, I just really take 
my hats off to the work done by committee, and the language put 
out here so far. I will certainly have some amendments for 
tomorrow. And in informing that debate, I have some questions 
right now.
    Mr. Poole, I am a subscriber to Reason Magazine, and 
consider myself a ``small l'' libertarian, if nothing else. The 
analogy you made to TVA, the Tennessee Valley Authority, has 
piqued my interest. When these folks set the rates, is there a 
board of customers that informs that decision?
    Mr. Poole. That is a very good question----
    Mr. Rokita. Right.
    Mr. Poole. I don't know the answer to that.
    Mr. Rokita. So let's assume that there is. Do you think it 
is appropriate that that board consist of consumers of the 
electricity, particularly business consumers of electricity 
that would have competing interests against each other, 
arranged in such a way that one segment of the competing--the 
competitors in the industry could put their thumb on the scale 
and adversely affect their competitors in the same industry?
    Mr. Poole. No, I think the key factor in creating a 
stakeholder board is to try to balance the stakeholders, so 
that you don't have any one stakeholder group that can really 
dominate the process.
    My judgment is that the draft--what is in the bill now 
looks like a good attempt. It is maybe not perfect. Maybe it 
can be fine-tuned. But you have different categories of 
customers who are getting services--you know, general and 
business aviation and airlines. You have the people who are 
making the system work----
    Mr. Rokita. But certainly if you have a situation where 
competitors sitting on the board or not, or just--or someone in 
the industry who uses--like Mr. Calio mentions--most of it----
    Mr. Poole. Right.
    Mr. Rokita [continuing]. Can--could take a competitive 
advantage, or otherwise ignore another segment of the industry, 
that would be problematic, from a board governance perspective.
    Mr. Poole. It would. But let me make a point, though, that 
the people who are going to be on the board nominated by 
airlines are not going to be airline employees, they are not 
going to be A4A employees. They are going to be distinguished 
citizens that they have confidence in----
    Mr. Rokita. Yes, representing that industry. That is the 
thing. And if I am representing an industry, whether I am 
directly associated with it or not, you know, I have a 
fiduciary duty to shareholders to maximize profit.
    Mr. Poole. Well, no. But the legislation, as drafted, says 
their fiduciary duty is to the air traffic--ATC Corporation, 
which is the same principle that has worked for 20 years in 
Canada. And that is legally enforceable, that is a--you know, 
the fiduciary duty is to the air traffic Corporation, not to 
the entities that they are nominated by.
    Mr. Rokita. Well, I will have to look at that, because 
that----
    Mr. Poole. Yes----
    Mr. Rokita. It wasn't clear to me----
    Mr. Poole. That is a very important----
    Mr. Rokita [continuing]. In a couple readings of the 
legislation.
    Mr. Poole. Yes.
    Mr. Rokita. Maybe that needs to be strengthened. Regarding 
airspace redesign, let me run a scenario by you so that I 
understand this. And this will probably go to Ed and Nick.
    If I am chartering a plane into Teterboro, and that is a 
part 135 operation that is for commercial revenue. I don't own 
the plane, so it is not part 91. In fact, as much as I love my 
chairman, I would differentiate: just because you are 
generating revenue doesn't necessarily mean you are making 
profit. And that is certainly the part 135 industry in most 
regards.
    Mr. Calio. The airlines know that.
    Mr. Rokita. Yes, right. So you know, I want to get us off 
this commercial versus noncommercial, because that is not 
distinctive, actually.
    But let's say we are on the board, and we have the airlines 
represented, we have some general aviation represented. And all 
of a sudden we notice that these customers flying the part 
135s, for example, into Teterboro with their sales team to make 
a pitch in New York City could just as easily--or not just as 
easily, but for that kind of money--buy a round of first-class 
tickets on a given airline.
    And me, representing the airlines, would prefer that. That 
is what we are in the business to do, sell especially first-
class seats. So what prevents me, the way this language is 
written, from making a motion on the board and having me and my 
allies--because I agree with that, Mr. Bolen, and you are not 
going to change me, because I used to be in board governance, 
and I know that 30 percent is effective control--what prevents 
me from making a motion, having it seconded, having it voted 
favorably to say, ``You know what, we don't need that many 
planes going into Teterboro, look at that line. Forget about 
fees and charges, but that line going into Teterboro is too 
long, that is hampering me from getting my passengers into JFK 
or LaGuardia. Therefore, we are going to limit the number of 
flights to Teterboro to X,'' and it passes.
    And now I have effectively sold more airline seats to go to 
JFK or LaGuardia, and----
    Mr. Bolen. Well, I think you are hinting at exactly some of 
the concerns that we have raised.
    I would like to go back and address a couple of other 
concerns----
    Mr. Rokita. I am over time, and I got to be respectful, so 
I am going to limit you to 15 seconds, and then I want Nick to 
respond, if that is OK.
    Mr. Bolen. I think you are raising a very serious, very 
legitimate concern, and it gets to the heart of our concern 
about setting up this board.
    I also want to point out that there are other concerns 
about some of the things that have been said related to taxes 
and fees that I think need to be corrected.
    Mr. Rokita. OK. I look forward to hearing more offline in 
advance of tomorrow.
    Nick?
    Mr. Calio. The way it works today, there are a limited 
number of slots for GA going into Teterboro. That is why they 
get diverted elsewhere. I don't believe that would change.
    And, you know, Mr. Rokita, I have to say this notion of 
this board going outside of its authority--the legislation is 
very clear. GA is exempt, except for those who are already part 
135----
    Mr. Bolen. That is not true.
    Mr. Rokita. You know, that is the thing--let me stop. I 
don't want to start a fight. But, Chairman, I would like to 
know the page number and line that----
    Mr. LoBiondo. Well, we will have round 2.
    Mr. Rokita. Oh, OK.
    Mr. LoBiondo. We have--trying to, you know--we are trying 
to accommodate. Everybody has been patient----
    Mr. Rokita. That is a very important point, and I don't see 
it in----
    Mr. LoBiondo. You will have round 2, Mr.--sorry, thank you.
    Ms. Brown?
    Ms. Brown. Thank you, Mr. Chairman. And you know, I am 
going to be real brief, because I want to give--safety is the 
number-one thing that I am concerned with. And the last time 
the Government went to a private agency for their assistance 
was in--with Amtrak. And then we nickel and dime Amtrak to 
death. I know no one remembers that.
    And in 1988 President Reagan partially privatized the air 
traffic controllers, and we are still recovering.
    I have been supportive of the air traffic controllers the 
entire time I have been in Congress. But I am concerned with 
what is being proposed here today, because we have a system--
yes, when we passed it in 1995, it was very slow getting 
started. But they are moving forward. The idea that we would 
compromise safety in any way--and someone up there made the 
statement that they are concerned about the traveling public, 
that is our responsibility, to make sure that we have the 
safest system, the safest system. That is my responsibility.
    I travel twice a week, and I can tell you I have seen 
several specials on the near misses. And if it is a near miss, 
then we need to make sure that we give the system the money or 
the assistance they need to get it done. But to go completely--
turn it over to a nonprofit, I just can't fathom that.
    And let me just tell you what people ask me about is that 
when US Airways and American Airlines merged, we don't have 
curbside service, or that you have to pay $1,000 for a one-way 
ticket to Jacksonville. I mean that is the kind of issues that 
the public concerns itself with. They don't have to worry about 
safety.
    And I want to start with Mr. Bolen. Can you tell us about 
safety? Because that is our number-one responsibility.
    Mr. Bolen. Well, I think I can tell you that today the U.S. 
has the safest air transportation system in the world. And we 
are currently experiencing the safest period in our aviation's 
history.
    What--one of the reasons that safety is improving--and it 
is laid forth in a MITRE report--is that we have been adopting 
additional safety standards. I think what the report found is, 
regardless of governance structure, regardless of the type of 
organization, safety has been improving. But nowhere in the 
world is it safer than it is here, in the United States.
    Ms. Brown. Do you think, in privatizing the system, we 
would compromise that safety?
    Mr. Bolen. I don't know whether safety will be compromised. 
I don't see any empirical data on safety. My concerns are 
primarily with access to airports and airspace. I think 
consumers will get hurt, I think small towns and rural 
communities will get hurt. I think general aviation operations 
will get hurt.
    Ms. Brown. Mr. Poole? Safety?
    Mr. Poole. I think the empirical record shows that safety 
has improved in most countries that have done this. The rate of 
losses of separation, you know, the standards of how far apart 
they have to be, in Canada has improved by half in the time--
you know, it is half what it was 20 years ago, when they 
started. That is a pretty good track record on safety.
    Ms. Brown. Yes, sir?
    Mr. Rinaldi. We do run a safe system. We could always be 
safer. I don't want to rest on our laurels.
    The budget constraints with the FAA, and the fact that they 
don't want to expand into new technology such as remote 
towers--we have an airport in northern Virginia, Leesburg 
Airport, runs about 125,000 operations a year on a one-runway 
operation. It is close to Washington Dulles, and it is very 
close to the Washington, DC, airspace. The Commonwealth of 
Virginia and the town of Leesburg have been asking for a 
control tower there, and the FAA doesn't want to expand their 
services. This is where I think we should be focusing on 
expanding services out there, to ensure that we have increased 
the safety of the system.
    Ms. Brown. You mentioned also training, diversity, and--you 
know, I have met with several air traffic controllers over a 
period of years, and they have talked about what the 
additional--what they need. I mean to think that we could have 
a system, and that you all could be operating and the rest of 
the airport is closed is not going to happen.
    Mr. Rinaldi. That is correct. But what we are looking at is 
making sure that we are expanding the safety modules, and 
implementing new technology so we can enhance the safety of the 
system.
    Ms. Brown. How do you think privatizing will enhance that?
    Mr. Rinaldi. I think if we could streamline the 
bureaucratic red tape of the FAA, and give us a stable, 
predictable funding stream, we would be able to enhance the 
safety of the system.
    Ms. Brown. Why can't we do it with our present system? I 
yield back the balance of my time.
    Mr. LoBiondo. Thank you. Mr. Hardy?
    Mr. Hardy. Thank you. I would like to thank the chairman 
for holding this meeting here today.
    You know, I am from Nevada, and we have UAS [unmanned 
aircraft system] test appropriations for our site for--out in 
Nevada we have the McCarran International Airport within our 
State. And what we are talking about here, I believe, is one of 
the most vital, important things, not only for our State but 
for our Nation. For the world, so to speak, because we are the 
busiest place in the world.
    However, at the end of the day, I don't think anybody can 
argue that we are--and there is no debate on it--that we are 
dealing with technology from World War II, back when we were 
fighting Japan and Germany. Seventy-five years we have been 
dealing with this type of technology. Paper slips really 
concern me.
    So with that being said, not only is it dated, but it is 
also costly. It shows here, according to the FAA, airline 
delays and cancellations are costing passengers and shippers in 
the airline business nearly $33 billion annually. And the 
trends are increasing. The FAA projects that passenger growth--
will continue to grow for years ahead. So, let's get straight 
to what we are using, 75-year-old technology. And 
inefficiencies in the system are still costing us $30 billion a 
year, or annually.
    With the safety and security being paramount, as Ms. Brown 
has said, I believe that the chairman was absolutely right when 
he uses the word ``transformative.'' Speaking of safety, I 
would like to talk to Mr. Calio. In your testimony you state 
that reform will make our exceptionally safe system even safer. 
I want to examine that just a little bit further, and kind of 
get a little down deeper, and have you share your thoughts with 
us on how that works with this new ATC modernization.
    Mr. Calio. We all keep repeating it, and it is true, we 
have the safest system in the world. We believe we can have an 
even better system with the reforms that are proposed in this 
bill.
    Right now we are hamstrung by a system that takes years and 
years to have good products that could make us even safer get 
to market. If you look at some of these reports--and the 
easiest one for you to look at would be what came out in 
January from the inspector general--and talk about the number 
of acquisitions that are online, the number of projects that 
are online, how far over time they are, how much over budget 
they are, and it shouldn't really take that long.
    And, you know, we are not trying to throw Canada in 
anybody's face, but they are bringing products on the market 
that they are selling all over the world to other air 
navigation service providers in 0 to 30 months. We have some 
things that have been online for 14 years. By the time a lot of 
our products come in, they are already outdated.
    The FAA, as currently structured outside of the safety 
regulation, cannot in any fashion keep pace with the--with 
technology. They are too far behind. Mr. Poole has laid out the 
reasons why. With all that together, and with the FAA being 
able to focus--and the Government being able to focus on 
safety, which is where they should be focusing, it would 
improve.
    And again, I would point to the MITRE study, which took six 
air navigation service providers around the world, at the 
request of the FAA, and found that in each case safety was 
maintained or got better, and that the focus on safety by both 
the regulator and the operators increased.
    Mr. Hardy. Thank you. Turning to Mr. Rinaldi, you know, as 
a former business owner myself, I know what happens when there 
is uncertainty in the market, and what is going on. Can you 
give me just a little bit of an idea about your thoughts on 
this uncertainty, and the impacts with the controllers?
    Mr. Rinaldi. Well, I think that, you know, if you just look 
at the uncertainty of the funding--and as we approach a 
possible shutdown or a deadline that something has to pass, the 
agency actually stops focusing on the modernization projects, 
and they actually start to scale back, just in case they go 
into shutdown mode. They dust off the manuals, and everybody 
starts going--everyone is focused on the potential shutdown.
    So, even though we may have only had 15 or 50 days--
whatever the quote was earlier about shutdowns--over the last 
couple decades, it is the threat of the shutdown that leads us 
up to as we start scaling everything back and preparing and 
making sure that we would be able to run with--you know, on a 
barebone basis with the shutdown.
    So, the uncertainty loses much--so much more productivity 
as the issues nongermane to the safety of the National Airspace 
System are being thrown around back and forth in----
    Mr. Hardy. I would like to just touch on the same thing 
with Mr. Calio. You talked about uncertainty and funding 
streams yourself. Do you share the impact of that uncertainty 
with the airlines, that it has on airlines also?
    Mr. Calio. Anything that affects the air traffic 
controllers and operations affects the airlines, and being able 
to get your constituents from one place to another.
    I think it is interesting to note that, over time, Nav 
Canada hired more air traffic controllers than they started 
with. We believe that could happen here, and it should. Mr. 
Rinaldi can talk to it much better than I can, about how long 
it takes to get an air traffic controller online. And they are 
understaffed.
    Mr. Hardy. Thank you, Mr. Chairman. I yield back.
    Mr. LoBiondo. And thank you. We are going to ask for just a 
quick, 5-minute recess. We have at this point two more first-
round questions from Mr. Carson and Ms. Titus, and then we will 
be going to round 2 for questions.
    I know Mr. DeFazio has some, I know that I have some. So we 
will be looking to come back in 5 minutes. So we are in a 5-
minute recess.
    [Recess]
    Mr. LoBiondo. I would like to try to call the committee 
back to order, please.
    So we will now go to Ms. Titus.
    Ms. Titus. Thank you very much. Just to kind of recap--
because I have been sitting here a long time--we were presented 
with this major bill a week ago. It is a bill that transforms, 
not reforms, despite whatever the new jargon is. We have had 
one hearing today, which came at the request of the Democrats--
weren't even going to have that--and tomorrow we are going to 
mark it up.
    We have had 3 hours of hearing, and almost all the 
questions have been answered with very little specificity. In 
fact, every answer is basically a, ``Well, trust me, this is 
just the beginning of the process, we are going to work it 
out.'' Well, that is not very satisfying. And so I have some 
concerns that I hope somebody can answer with something 
specific.
    My first concerns, like a lot of them, are about cost. I 
represent Las Vegas. And, as you all know, that is the--one of 
the busiest--world's top tourist and convention centers. And I 
often hear from the hospitality industry if you increase the 
cost of tickets, that is going to hurt the number of people--or 
perhaps negatively affect the number of people who come for 
recreation and for business. Also we have tour operators as a 
big industry that provides transportation out to see the dams, 
Colorado River, Grand Canyon. And those costs will be affected.
    So I am just wondering if anybody can guarantee me that, 
since the purpose of this privatizing--I have heard this over 
and over, too--is to run more efficiently, have cost savings, 
if those cost savings will be passed on to passengers, or if 
they are going to go into the bottom-line profit of airlines. 
So can I say to my industry, ``Yes, this is going to help to 
bring down costs, it is not going to increase costs''?
    Then the second major concern I have, which is also one 
that is shared by many, is the representation on the board. My 
colleague, Mr. Hardy, was talking about how big the drone 
industry is in Nevada. That is true, it is growing everywhere. 
And yet you have no representative on the board. The air tour 
operators aren't on the board. Air ambulances aren't on the 
board. Consumers aren't on the board. Department of Defense, 
not on the board. Now, you got some little extra advisory 
committee over here, but we all know that is just window 
dressing. They don't really have any kind of authority. So how 
are their views represented by this board?
    And then the third question that is--maybe somebody can 
address is there has been a lot of focus on union issues for 
air traffic controllers. But what about the other unions, those 
who do the safety inspections, the tower maintenance, the 
construction? Is this board going to honor Davis-Bacon 
provisions? Or, now that it is a private Corporation, can they 
just throw all that out the window?
    So whoever wants to answer those three questions, I would 
appreciate it. And maybe we can start with you, Mr. Poole.
    Mr. Poole. I can tell you that, as I said earlier, there is 
a large potential for costs coming down because of the 
economies of scale inherent in air traffic control, and the 
ability to focus more on running the thing as a business.
    Now, whether airlines will pass along cost savings that 
accrue to them in terms of tickets, that I cannot answer. You 
would have to ask airlines that question.
    Ms. Titus. You know, so many times we have heard that you 
need to run it more like a business, and then we let businesses 
do it, and then Government has to come back and bail those 
businesses out because, sure enough, they couldn't do it more 
efficiently and effectively and cheaper than we could----
    Mr. Poole. But the good news here is that this is not a 
science experiment, because we have 50 or 60, depending on how 
you want to count it--or 80 countries that have shifted this 
outside of the transport agency, put the ATC system at arm's 
length from the safety regulator, and it is working very well. 
And we are seeing cost savings, we are seeing no negative 
impact on savings. And, in many cases, improvements in safety.
    So, I mean, it is--nobody can say you do X and you 
absolutely get Y. But we have empirical----
    Ms. Titus. That would be a science experiment.
    Mr. Poole. We have empirical data, and lots of it. So, I 
mean, I am pretty confident this is going to be a very big step 
in the right direction.
    Ms. Titus. But not in a country that is comparable to the 
United States.
    Yes, sir?
    Mr. Bolen. Well, I think it is a leap of faith. I think we 
are being told that the costs are going to come down. We have 
not seen where there will be personnel savings, we have not 
seen where there will be closures. So that part is not laid 
out.
    I will take a little bit of issue with what Bob Poole has 
said. There has actually only been a couple of countries that 
have moved air traffic out of Government entirely. So, you 
know, you are looking at Canada and the United Kingdom. You are 
not looking at 50 and 60 in all these other things. The rest of 
them are in Government. And what we saw with the United 
Kingdom, for example, is they did require a bailout when the 
economy went down.
    With regard to the diverse groups that are not represented 
on the board, I think that is the challenge. We have the most 
diverse air transportation system in the world. It is 
constantly changing. It is constantly evolving. And the way 
that that community makes sure that its access to airports and 
airspace is protected is because of Congress, not because they 
were put into a board.
    We are talking about turning this over to a monopoly, and 
letting the monopoly decide who can come in and who will stay 
out. I think it is a major concern.
    Ms. Titus. If I could just sum up real quick, it seems--
Mr.--just a second. There has been an uncertainty of the 
shutdown, uncertainty of the market, uncertainty of this bill, 
uncertainty of who is on the board. Seems like maybe mandatory 
spending would be a better way to reform, rather than transform 
the system. Thank you, Mr. Chairman.
    Mr. LoBiondo. Mr. Sanford?
    Mr. Sanford. Thanks, Chairman. Two quick thoughts. One, I 
guess this would be more directed to the chairman. I just want 
to go on record as a concern, the, in essence, $20 billion from 
a budgetary impact standpoint going forward.
    As I understand it, the chairman is over, I guess now, 
testifying before the Committee on Ways and Means, and maybe 
gets that wrinkled out, or leadership will. But I just--you 
know, the--what happens with the money, I think, is very, very 
important, going forward. That is outside the jurisdiction of 
this committee, but I think it is very, very important.
    On to this bill, though, at this point in testimony 
everything that could be said has been said. But if I might 
turn to you, Mr. Calio, if you were just to wrap it up--because 
you hear the different points. I saw the Reason article, and it 
talked about how, at the end of the day, this bill would save 
money, it makes the system more efficient.
    You know, if we are going to live in Thomas Friedman's flat 
world and we are competing with folks in India and China and a 
whole lot of other places around the globe, fundamentally, as a 
society, we need to look for ways that make us more 
competitive, that bring down costs.
    Any wrap-up from your end that you would pass on to me, as 
I take this message back home and inevitably talk about it in 
town hall meetings?
    Mr. Calio. Yes. We can make our system a lot better. The 
way the FAA currently operates, we have thrown--you have thrown 
billions and billions of dollars at the FAA, and it has not 
been well spent. And it could be better spent for good products 
and good acquisitions, better facilities that would make air 
travel much better, even safer than it is now, and would 
provide the opportunity for more commerce than we have now.
    In addition to that, you wouldn't be faced with an 
uncertain funding source. The users of the system, except for 
certain users of the system, would pay for that, and you would 
have a much better way to provide people in and out of the 
system.
    Mr. Sanford. So, again, summing it up at this point in 
testimony, what we would probably agree on is that change is 
something that we naturally fear. There is uncertainty, 
certainly, that comes with any change. But in the whole of 
your, you know, professional estimation, you would say this 
change would be for the good, from the standpoint of the 
consumer, the taxpayer, and the safety of the system in the 
aggregate?
    Mr. Calio. I absolutely would. We could replace the current 
FAA, outside of the safety regulator, with a construct, with an 
entity that would be far more efficient.
    The FAA, you can count--I don't want to misspeak--there are 
multiple facilities across the country, multiple centers across 
the country. They each have an HR department, they have their 
own accounting department. You could keep going down the list. 
And, you know, they build up these silos that make it very 
difficult to get anything done.
    So if you want to change that, you have to address it. You 
know, you don't keep holding more and more hearings and try to 
push the deck chairs around, which is what we have done. And 
all of these different reports tell you that it just doesn't 
work. You know? You all have tried, you know, through 
oversight, through mandates in bills to get things done.
    And the culture is resistant, as Mr. Poole pointed out, and 
they just don't make the progress that we need to have made to 
get products online, to have better procedures, better 
processes, and get--you know, for instance--again, I hate to 
keep going back to it--I don't hate to--you know, more 
controllers online.
    Mr. Sanford. Sure.
    Mr. Calio. They run the system.
    Mr. Sanford. One last question in the minute and a half I 
have got left. I guess this is for you, Mr. Poole. Some 
opponents have said, you know, there might be problems, though, 
with regard to, for instance, shooting approaches on instrument 
flight, that, you know, you shoot your approaches on good days 
so that you are ready on a bad day. But if it is going to cost 
you more in a user pay-type system, people might be--
particularly general aviation types--might be prone to shoot 
fewer approaches.
    That is a red herring? It is false? Or, no, it is partially 
accurate, but----
    Mr. Poole. Well, it is false in the terms of the way this 
bill is written, because there are no user fees for general 
aviation, period, full stop. So that problem cannot arise. And 
I think airlines have their training programs--airlines that do 
pay fees are going to continue to do all the training they need 
to do, whether there are fees or not, because they know safety 
is their bottom line, and they----
    Mr. Sanford. How about the middle ground, though, with 
contract pilots that--say you are a--run a jet type of 
scenario--I don't know if they run their own training programs, 
or you hire contract pilots that have X-number of hours, and 
they have got to keep up with their own hours and their own 
training. Could it negatively impact those guys, or----
    Mr. Poole. No, because they will be doing it at GA 
airports, mostly likely, and they would only--I mean if the 
airport--if the GA airport has its own landing fee, that is 
entirely separate from air traffic control. So there would be 
no ATC charges for those individual pilots, when they are 
shooting touch and gos, and that sort of thing.
    Mr. Sanford. OK. I yield back. Thank you, Mr. Chairman.
    Mr. LoBiondo. Thank you.
    Mr. Carson?
    Mr. Carson. Thank you, Mr. Chairman. I think we all can 
agree that we want to keep our skies the safest in the world, 
period. And I am not convinced that the comparison really to 
Canada or European models is necessarily accurate. We have 
twice the airspace and the volume of air traffic in the U.S.
    My question is for Mr. Bolen. What are your thoughts, sir--
what are your thoughts concerning what my colleagues cite 
compared to the airspace we see in Canada?
    Mr. Bolen. Well, I think it is an apples-to-oranges 
comparison. Canada is very different from the United States in 
the size, as you pointed out. They are also very different 
because they have all privatized airports in Canada. So I don't 
think it is an apples-to-apples comparison. And certainly the 
business aviation people I know up there have made that point 
over and over again.
    I think it is, as I said before, a real leap of faith to 
think that doing this is going to make better technology and 
NextGen and all these other things necessarily happen. 
Certainly in the United States the general aviation community 
has been second to no one in pushing for the new technologies, 
in promoting NextGen. We were the first to equip with GPS. We 
were the first to fly those routes, and we continue to be 
pushing that, including the mandates for ADS-B.
    So, I think the idea that we are going to solve all our 
problems by giving the system over to the airlines is, at best, 
a leap of faith, and I think it is a flawed premise.
    Mr. Carson. Thank you. And this question is for everyone. I 
would like to hear your concerns and your views about the 
addition of a physical barricade outside of the cockpit. We 
have heard from proponents who point out that this measure 
could be effective and not so expensive, but I have also heard 
objections. And I am planning to offer an amendment to add a 
secondary barrier to help with this effort. What are your 
thoughts, in terms of it being an additional safety procedure?
    Mr. Poole. Well, I have looked into this in my role on 
dealing with aviation security, and I think it--the studies 
that I have seen suggest that it would be a cost-effective 
measure, be better than a lot of other things that the TSA is 
currently doing or mandating. A one-time cost that would be 
analogous to the one-time cost only of the reinforced main 
doors, as opposed to the ongoing cost of something like sky 
marshals, and so forth.
    Mr. Carson. Sure, sure. Yes?
    Mr. Calio. Mr. Carson, safety is our highest priority. We 
support the section of the underlying bill that calls for a 
full assessment of the safety of the cockpit. There are 
multiple layers of security in place today. Some of our members 
have installed secondary barriers. Others think that the 
current security procedures in place and multiple levels of 
security are sufficient. And, rather than just jump to a 
mandate, as is often the case, I think we ought to let the 
underlying bill work its will and see--and make the assessment.
    Mr. Carson. Yes, sir. Good job. Thank you, gentlemen. I 
yield back my time, Mr. Chairman.
    Mr. Shuster [presiding]. Thank you. With that, Mr. LoBiondo 
is recognized.
    Mr. LoBiondo. Thank you, Mr. Chairman. For, I think, Mr. 
Poole, the FAA, as we know, currently depends on appropriations 
from Congress and, as we know well in Washington, future budget 
allocations are never really certain.
    The Government Accountability Office found in a December 
2015 report budget instability and uncertainty has seriously 
impacted NextGen implementation and air traffic controller 
staffing, among other things. How would the cost-based 
financing system and bonding authority provided in the new ATC 
Corporation provide for stable and predictable funding to 
finally achieve successful, long-term capital projects, in your 
view?
    Mr. Poole. Well, I think the biggest part of that, in 
answer to the question, is the bonding authority, because when 
you are doing large-scale capital modernization in just about 
any field, the sensible thing to do is not do it out of 
operating cashflow, but to bond--if you have a predictable 
revenue stream that the markets will accept, it makes very good 
sense to finance those large-scale capital--just like you would 
not save up the cash to buy a house and deprive yourself of the 
benefits for a long period of time, likewise we are depriving 
ourselves of benefits from air traffic modernization by funding 
it piecemeal, dribs and drabs, on an annual appropriations 
basis, as opposed to large-scale revenue bond financing.
    You know, you don't build a new Denver Airport out of 
cashflow, you do it out of revenue bonds. So the same thing 
with--that is really the key here, I think, is to be able to 
have the revenue stream not only that is reliable for 
operations, but that gives you the means to do long-term, 
large-scale financing.
    Mr. LoBiondo. Again, for you, Mr. Poole. In March 2015, in 
testimony before our subcommittee, Mr. Matt Hampton with the 
DOT Office of Inspector General stated that one of the lessons 
learned from the other nations' experiences in separating and 
commercializing their air traffic control function was planning 
for the transition period.
    In your opinion, is the transition process included in this 
bill sufficient to ensure no significant disruption to NextGen 
and overall safety levels?
    Mr. Poole. I think it is a sufficient time. Most of these 
transitions have taken 2 to 4 years to work things out, get the 
fee system in place, and, you know, sort of redefine the 
organizational lines of business, and this sort of thing. And 
the transition period in the bill seems right in the mainstream 
of the experience in other countries.
    The fact that our system is larger, I think, is 
completely--it is a red herring, because the system is already 
in place. The system is at the scale it needs to be. You are 
talking about a change in the management and organization of 
the workforce, and in how procurement programs are operated. 
But all the existing contracts would stay in place, you know, 
there would not be any kind of sharp disruption in ongoing 
operations or contracts.
    So I think the several-year transition period in the bill 
is realistic.
    Mr. LoBiondo. Thank you. I yield back.
    Mr. Shuster. Thank you. And I will yield to Mr. DeFazio.
    Mr. DeFazio. Thank you, Mr. Chairman. Earlier, Mr. Poole 
said that we would strive--or could, perhaps, under this 
proposal--have the lowest unit cost in the world. Does anyone 
disagree with that objective?
    [No response.]
    Mr. DeFazio. OK, good. Now, let's move forward. The lowest 
unit cost in the world is Iceland, followed very closely by 
Mexico, followed very closely by India. Now--and this will be a 
question to Mr. Rinaldi.
    First, I got to congratulate you. You drive a tough 
bargain, and I have never seen such good labor protections in 
any piece of legislation that has any chance of passing a 
Republican Congress. So congratulations.
    Mr. Rinaldi. Thank you, sir.
    Mr. DeFazio. Good work for your members.
    Mr. Rinaldi. Appreciate it.
    Mr. DeFazio. In fact, it is so good I hear the Freedom 
Caucus is opposed to the bill, because they don't like the 
labor protections. I will give you that.
    But now comes the part that you won't like quite as much. 
You know, you say in a note you sent out that we will be able 
to negotiate a shorter workweek. So somehow we are going to 
strive to have the lowest unit costs in the world--that is 
competing with the air traffic controllers in India, where they 
don't bother to train pilots sometimes, or Mexico--what do air 
traffic controllers earn in Mexico?
    Mr. Rinaldi. I don't know, and I did not send out a memo 
that said to my membership that we were going to have a shorter 
workweek.
    Mr. DeFazio. Well, it is a ATC Corporation questions and 
answers----
    Mr. Rinaldi. From when?
    Mr. DeFazio. When was this? This week. And it says in--
under A16, talking about NATCA members not being contractors, 
and then it goes on to say that.
    Mr. Rinaldi. No.
    Mr. DeFazio. So----
    Mr. Rinaldi. We did two telcons this week with our 
membership, where they were--had many questions. What--maybe it 
wasn't captured correctly.
    Mr. DeFazio. OK.
    Mr. Rinaldi. What I did say is around the world they work a 
shorter workweek than we do.
    Mr. DeFazio. OK.
    Mr. Rinaldi. We work the most amount of hours, the most 
amount of airplanes----
    Mr. DeFazio. Right. But the point I am making is we have 
all agreed you want the lowest unit costs in the world. 
Second--let's be second lowest. That means we are going to beat 
Mexico. One of the largest components of this system is labor. 
It is not a--that capital-intensive. Labor-intensive system.
    And Mr. Poole is shaking his head--so how--we would have to 
be how much more productive than Mexico or India----
    Mr. Poole. Let me----
    Mr. DeFazio. No, Mr. Poole, I haven't recognized you.
    Mr. Poole. All right.
    Mr. DeFazio. So this is a question for Mr. Rinaldi, because 
I think this goes to the heart of this issue. I like the labor 
protections. I am very concerned about where this whole thing 
could head, as a private Corporation, in terms of, you know, 
getting the lowest unit cost in the world, what that means for 
safety, and what it means for the workers after we renegotiate 
contracts.
    Mr. Rinaldi. So here is the thing. You asked the question 
do we want the lowest cost of unit. What we want to make sure 
is we run the safest, most efficient system in the world. That 
is what the air traffic controllers want. I am not worried 
about the lowest cost of unit.
    But what I am worried about is our current environment. And 
I applaud you for working with us, knowing that status quo is 
unacceptable, and knowing that we would never support a for-
profit model. So anything that falls in between that, we are 
willing to work with you and the chairman and the committee on 
anything that works there.
    My goal is to make sure we continue to run a safe and 
efficient system, we staff our facilities, we build new, modern 
facilities, and we have modern equipment to run the aviation 
system into the future. Currently, right now, we are hanging 
on. But if this continues down the same path that we have done 
for the last 10 years, we are going to struggle, and we are 
going to have to reduce capacity, because we just want to have 
controllers to open up positions.
    Mr. DeFazio. I--OK. I would agree with that statement.
    Now, here is a point. Of course we are leaving the people 
who have to certify the new approaches, certify the operations, 
certify the new equipment, they are all subject to general fund 
appropriations, and they are over here. They are also the 
people who have to certify aircraft. The manufacturers aren't 
thrilled with this idea. They are subject to appropriation, 
they are over here.
    Mr. Rinaldi. And a lot of----
    Mr. DeFazio. They aren't protected by being under the--
whatever fee structure this board creates.
    Mr. Rinaldi. Well, it would be kind of schizophrenic, 
because I am going to be working--I am going to be representing 
a lot of the members that stay behind in the FAA.
    Mr. DeFazio. Right.
    Mr. Rinaldi. Because I am--they are still members of our 
union. We will be working those issues. I will still be coming 
to you and asking you for appropriations to make sure we----
    Mr. DeFazio. Right. But wouldn't----
    Mr. Rinaldi [continuing]. Do this thing----
    Mr. DeFazio. Wouldn't it be better to bring them along?
    Mr. Rinaldi. Into a whole--like I said, we applaud your 
efforts, and----
    Mr. DeFazio. OK, all right. Thanks, OK.
    Mr. Rinaldi [continuing]. We are willing to work on 
anything that is not status quo----
    Mr. DeFazio. OK.
    Mr. Rinaldi [continuing]. And anything that is not for 
profit.
    Mr. DeFazio. Thanks, Paul. I want to make two quick other 
points.
    I heard repeatedly that the Secretary will appoint people 
who support the public interest. As I said, President Sanders, 
yes, I bet so. President Trump? Maybe not so much. Consumers 
might not be at the top of the list. And all it says is 
directors appointed by the Secretary. It doesn't say that they 
have to represent consumer or public or any other interest. It 
could be--they could be two more airlines.
    And then one other point. You know, 61 percent of the 
operations every day are regional airlines, and that is 45 
percent of the passengers, which presents a problem in the 
system in--when we talk about LaGuardia, and things like that. 
But the point is, they don't get a seat on the board. So the 
airlines that are carrying nearly half the passengers in the 
country and do 61 percent of the operations do not get a seat 
on the board.
    You know, Mr. Calio was asked about why four major 
airlines, and he said, ``Well, it is kind of proportional,'' 
but it is not exactly proportional when you look at commercial 
service.
    So, you know, there are many, many issues that I think need 
to be ironed out. I have so many concerns about this construct. 
I appreciate the opportunity for the hearing, Mr. Chairman, but 
I really believe that, you know, we are not ready to go forward 
with this proposal. You are, and we will take it up tomorrow, 
and we will see where it ends up.
    Mr. Shuster. Thank you very much.
    Mr. Poole, if you would, answer that question on unit 
costs.
    Mr. Poole. Yes. What I was trying to say was that I think 
we were just a little bit bamboozled, because the proper 
standard is for developed Western countries, the lowest unit 
cost, not for all countries in the world, because the labor 
costs are tiny in comparison to ours in developing countries.
    Mr. Shuster. Thank you.
    Mr. Rokita?
    Mr. Rokita. I thank the chairman. As I said before, I thank 
you for your leadership, sir, in getting us to this point.
    When I ran out of time we were discussing an example. And 
if I was a member of this board, perhaps representing the 
airlines, what would prohibit me in this language from making a 
motion to choke of a--access to a general aviation airport that 
we knew I had potential customers flying into, so as to give a 
competitive advantage to selling more airline seats.
    And then, during the break, for the record, I will mention 
that group's--stakeholders of all sides came and offered 
language I didn't find on point to my example. That is, from 
everything I am reading here, I can, in fact, make such a 
motion. And if it is voted unfavorably, it then moves to a 
different section of the bill, section 90501, called ``Safety, 
Oversight, and Regulation of the Corporation,'' and that is by 
the FAA.
    So this does move to the FAA for final approval, my motion, 
my successful motion. And--but the problem is it is only looked 
at by the FAA under this proposal for safety. So that is to say 
that if--as long as that choking off of the GA airport doesn't 
adversely affect safety, the language says in section 3 on page 
74, ``The Secretary shall approve the proposal.''
    Then it further goes on to say in this language, on page 
76, that if I am an aggrieved party on the board--not on the 
board of the general public--and I want to fight that approval 
and take it to court--starting on page 76, line 11--the court 
may overturn my motion, the approval of the Secretary, only 
upon the finding of clear error or abuse of discretion. A very 
high standard.
    On the other hand, if my motion failed on this board, and 
the airlines, for example, wanted to go--and this--it is not an 
antagonistic example, I am trying to get us, Mr. Chairman, a 
path forward here--but if I lost the motion, and I was 
interested in having that motion approved to choke off, for 
example, that GA airport, and I took it to court, I get to have 
a trial de novo. That means the court is not bound by any 
deference to the Secretary or anybody else, the exact almost 
opposite standard that abuse of discretion is.
    So the scales aren't even here. And I guess what my example 
illustrates is that when you have natural competitors in the 
same place on the same board, this is very hard to adjudicate 
for board governance purposes. And when we are talking about 
national assets, treasures, really, whether it is our airspace 
or parks or whatever else that have different users for 
different reasons, it makes this kind of leadership that is 
exemplified in this bill--again, leadership that I applaud--
very hard to get done. But I am committed to try to do that.
    Another thing that was--another issue that was brought up, 
and I was--testimony that was made I completely disagree with--
is that there are no user fees for GA. There are user fees for 
general aviation. And, Mr. Poole, for the record, he is 
furrowing his brow right now, and that is because Mr. Poole 
equates general aviation with nonprofit, non-revenue-generating 
activities. And that, in fact, is not the case. This language 
specifically blesses fees for a segment of general aviation 
that generates revenue, and I would certainly argue not always 
makes profit, just as Nick says about the airlines. I mean I--
so this is a user fee system that we are proposing here for 
general aviation.
    Finally, in my first round of questioning I asked about 
fiduciary duty and so on and so forth, and it goes to my 
earlier comment about how can you operate this board 
effectively with such--with these different stakeholders and 
users who have directly conflicting interests sometimes--
perhaps day to day, perhaps longer. And it was said that, well, 
no, the fiduciary duty is to, in fact, the Corporation, not the 
people you are supposed to be representing on this board, 
which, if that was really the case, Nick or GA or anyone else 
wouldn't have any problem with how many people were on the 
board, I would guess. But the fact is they are representing 
their interests, that is why they are there.
    And, in fact, on page 47 there is an exemption that says an 
entity that has a material interest as a supplier, client, or 
user of the Corporation's services can be on the board if the 
board unanimously determines with the concurrence in writing of 
a majority of the nominating members that such material 
interests would not likely or adversely affect in a material 
way the individual's ability to discharge the individual's 
obligations as a director.
    So, you know, this kind of language says that that--those 
conflicts do exist, and they are real, and we ought to treat 
them this way and figure out a way, using this language as a 
base to get us where we want to go, to maintain the safety of a 
system, to make it more efficient, to leverage the technologies 
that we have that we know are available, so that we can remain 
competitive and win in a 21st-century world. I yield back.
    Mr. Shuster. Yes, Mr. Rokita, just--you brought up a couple 
of interesting points. I think we may have some solutions 
there.
    The first you pointed out was--I believe you said it was 
for safety, but then it goes on to say, ``and otherwise 
consistent with the public interest.'' That is something we can 
certainly sit down and look at and try to strengthen that, take 
that off the--maybe have a--more peace of mind on that 
particular part of it.
    The other thing was the board member--that had to do, when 
we looked at that, of--as--if somebody had some kind of 
technical expertise that we might want to make an exemption 
for. But again, if that is something that we can talk about, we 
may be able to strengthen that to take away some of those 
objections or concerns that you have.
    Mr. Rokita. The chairman missed my mention that I will have 
a few amendments.
    Mr. Shuster. What is that?
    Mr. Rokita. The chairman missed my earlier comment that I 
am going to have a few amendments.
    Mr. Shuster. Well, the chairman knows his Members. I knew 
you would have a couple of amendments.
    [Laughter]
    Mr. Shuster. But anyways, those couple things you 
mentioned, I think we might be able to work through those, I 
think, and we will be looking at your amendments, also.
    So, with that, Mr. Sanford? You are done? I guess it looks 
like we are done for the day.
    I want to thank everybody for being here. Mr. Bolen, Mr. 
Poole, Mr. Rinaldi, Mr. Calio, thanks for being here. Again, I 
look at all the folks at that desk there, they have--everybody 
there has been there for 20 years or so, some more than others.
    And you know we have been talking about this and talking 
about this, and we have got a system that just hasn't been able 
to modernize the way we think it should, it hasn't been able to 
modernize the way other countries--I still come back to that--
when I learned this--a couple weeks ago that Canada, by the end 
of 2017, is going to be fully deployed, a worldwide GPS system, 
it is not America, it is the Canadians doing it, and I think 
that is--you know, one of the things that I think the Canadians 
look at, in talking to them, is they need more planes in their 
system to continue to drive down the cost. And that is exactly 
what they are going to do.
    And it is--again, it would be wrong for us, especially on 
our watch, to let another country become the gold standard, the 
leader in worldwide air traffic control. So, again, I am 
committed to try to find a way forward on this, to do what is 
right, what I believe is right for the country, what is right 
for Americans, and keeping the safest system in the world.
    So again, thank everybody for being here. This is 
adjourned.
    [Whereupon, at 1:42 p.m., the committee was adjourned.]
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