[Senate Report 107-154]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 383
107th Congress                                                   Report
                                 SENATE
 2d Session                                                     107-154
_______________________________________________________________________




                         AIRMEN AGE LIMITATION

                               __________

                              R E P O R T

                                 OF THE

           COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                                   on

                                 S. 361

                             together with

                            ADDITIONAL VIEWS




                  May 22, 2002.--Ordered to be printed

                               __________

                    U.S. GOVERNMENT PRINTING OFFICE
99-010                     WASHINGTON : 2002

       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
                      one hundred seventh congress
                             second session

              ERNEST F. HOLLINGS, South Carolina, Chairman
DANIEL K. INOUYE, Hawaii             JOHN McCAIN, Arizona
JOHN D. ROCKEFELLER IV, West         TED STEVENS, Alaska
    Virginia                         CONRAD BURNS, Montana
JOHN F. KERRY, Massachusetts         TRENT LOTT, Mississippi
JOHN B. BREAUX, Louisiana            KAY BAILEY HUTCHISON, Texas
BYRON L. DORGAN, North Dakota        OLYMPIA SNOWE, Maine
RON WYDEN, Oregon                    SAM BROWNBACK, Kansas
MAX CLELAND, Georgia                 GORDON SMITH, Oregon
BARBARA BOXER, California            PETER G. FITZGERALD, Illinois
JOHN EDWARDS, North Carolina         JOHN ENSIGN, Nevada
JEAN CARNAHAN, Missouri              GEORGE ALLEN, Virginia
BILL NELSON, Florida
                     Kevin D. Kayes, Staff Director
                       Moses Boyd, Chief Counsel
                      Gregg Elias, General Counsel
      Jeanne Bumpus, Republican Staff Director and General Counsel
             Ann Begeman, Republican Deputy Staff Director
                                                       Calendar No. 383
107th Congress                                                   Report
                                 SENATE
 2d Session                                                     107-154

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



 
                         AIRMEN AGE LIMITATION

                                _______
                                

                  May 22, 2002.--Ordered to be printed

                                _______
                                

      Mr. Hollings, from the Committee on Commerce, Science, and 
                Transportation, submitted the following

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                         [To accompany S. 361]

    The Committee on Commerce, Science, and Transportation, to 
which was referred the bill (S. 361) to establish age 
limitations for airmen, having considered the same, reports 
favorably thereon with amendments and recommends that the bill 
(as amended) do pass.

                          Purpose of the Bill

  The purpose of this legislation, as reported, is to increase 
the Federal Aviation Administration's (FAA) regulatorily 
mandated retirement age for commercial airline pilots from 60 
to 63 years of age while clearly maintaining the FAA's 
authority to take steps it deems appropriate to ensure the 
safety of air transportation operations.

                          Background and Needs

  Federal aviation regulations prohibit any air carrier from 
using the services of any person as a pilot, and prohibit any 
person from serving as a pilot on a commercial airplane, if 
that person has reached his or her 60th birthday. See 14 C.F.R. 
121.383(c). The FAA adopted the regulation, known as the Age 60 
Rule, in 1959 because of concerns that a hazard to safety was 
presented through the utilization of aging pilots in air 
carrier operations.
  Prior to September 11, 2001, according to media reports and 
some aviation industry representatives, there was a shortage of 
qualified commercial pilots. Post September 11, 2001, the 
airline industry has experienced a number of layoffs, including 
many pilots. However, as the industry begins to recover, with 
several airlines already having recalled pilots laid off in the 
aftermath of September 11, the pilot shortages may reoccur. 
While the major airlines, with lucrative pay scales, have had 
little difficulty attracting pilots, regional and on-demand 
carriers are typically hard hit by an evaporating labor pool. 
Because regional and on-demand carriers tend to provide much of 
the air service for smaller communities, individuals and 
businesses in those areas would be impacted if flights by 
smaller carriers are canceled due to a lack of available 
pilots. In addition, congressional testimony submitted by the 
Department of Transportation to the House Transportation and 
Infrastructure Committee suggested that the pilot shortage 
issue affects, to some extent, the ability of Essential Air 
Service carriers to provide service. Given the importance of 
air service to many rural and remote communities, any loss of 
service, even on a short-term basis, can have a significant 
negative economic and social impact.
  S. 361 is intended to diminish the scope of the pilot 
shortage problem. Again, prior to September 11, 2001, there 
were several indicators of a shortage of regional airline 
pilots. For example, regional airlines were hiring pilots with 
800 hours of flight time, while several years ago, they would 
not have hired a pilot with fewer than 2,000 hours. 
Furthermore, the regional airlines frequently hire flight 
instructors from pilot training schools. As a result, some 
schools have been running out of instructors, which in turn, 
affects the pipeline for future pilots. The supply of qualified 
pilots has also been negatively affected by the decline in the 
number of ex-military pilots seeking employment.
  In the more than 40 years since the Age 60 Rule was 
established, life expectancies have increased and medical 
science has advanced considerably. In addition, piloting today 
is a different experience than it was in 1959, especially with 
the advent of modern, highly automated jet aircraft. 
Nevertheless, proposals to change the Age 60 Rule have been 
controversial, and there are divided opinions on the matter 
among pilots, policy makers, and others within the aviation 
community. Many of those who support the rule as a safety 
standard believe it is still a reasonable determination of the 
time when there is a general decline in health-related 
functions and overall cognitive capabilities which may affect a 
pilot's performance. However, the Committee also received 
testimony from witnesses countering claims that there are no 
reliable tests available to identify those aging pilots who 
are, or will become, incapacitated or whose performance will 
decline to an unacceptable level.
  Opponents of the Age 60 Rule argue that it is an arbitrary 
and unfair standard without substantial evidence that pilots 
over the age of 60 are a safety risk. Because pilots already 
must pass routine medical and competency checks, opponents of 
the rule believe there is little reason to deny piloting 
privileges to someone who is otherwise fit to fly according to 
medical and compentency checks. Some pilots believe the rule 
constitutes age discrimination.
  Twenty-five European countries recently increased their 
mandatory retirement age for pilots to 65. Many Asian nations 
have also raised their retirement ages. Foreign airlines that 
fly to the U.S. with pilots over the age of 60 must require 
those pilots to relinquish command to younger pilots when they 
approach U.S. airspace.

                          Legislative History

  On February 15, 2001, Senator Murkowski introduced S. 361, a 
bill to increase the mandatory retirement age for pilots from 
60 to 65 years of age. The bill was cosponsored by Senators 
Inhofe and Enzi. Senators Bond, Feinstein, Grassley, and Thomas 
subsequently cosponsored the bill.
  On March 13, 2001, the Committee on Commerce, Science, and 
Transportation held a hearing on S. 361 and the Age 60 Rule. 
Representatives from the FAA, the Air Line Pilots Association, 
the Pilots Against Age Discrimination, and the medical 
community testified about the issues regarding the mandatory 
retirement age for airline pilots. On March 15, 2001, the 
Committee, without objection, ordered S. 361 reported with an 
amendment offered by Senator McCain.

                            Estimated Costs

  In accordance with paragraph 11(a) of rule XXVI of the 
Standing Rules of the Senate and section 403 of the 
Congressional Budget Act of 1974, the Committee provides the 
following cost estimate, prepared by the Congressional Budget 
Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                    Washington, DC, April 25, 2001.
Hon. John McCain,
Chairman, Committee on Commerce, Science, and Transportation,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed estimate for S. 361, a bill to establish 
age limitations for airmen.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Mark Hadley 
and Kathy Ruffing.
            Sincerely,
                                          Barry B. Anderson
                                    (For Dan L. Crippen, Director).
    Enclosure.

S. 361--A bill to establish age limitations for airmen

    Summary: S. 361 would increase the mandatory retirement age 
from 60 to 63 for pilots employed by air carriers. CBO 
estimates that implementing new regulations under the bill 
would cost less than $500,000 a year, subject to the 
availability of appropriated funds. S. 361 would reduce outlays 
for Social Security benefits in the near term if significant 
numbers of pilots who would otherwise retire instead worked 
until age 63. CBO estimates that such near-term savings could 
total up to $5 million a year through 2011, but that those 
savings would be offset by higher net Social Security costs 
after 2011.
    The Joint Committee on Taxation (JCT) estimates that S. 361 
would affect taxable pension benefits of certain pilots and 
taxable income of employers of certain pilots, but that overall 
there would be a negligible effect on federal revenues. Because 
the bill would affect receipts, pay-as-you-go procedures would 
apply. S. 361 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would have no impact on state, local, or tribal 
governments.
    Estimated cost to the Federal Government: By increasing the 
mandatory retirement age from 60 to 63 for pilots employed by 
air carriers, the bill would decrease Social Security outlays 
and increase revenues. In addition, S. 361 would require the 
Federal Aviation Administration (FAA) to issue new regulations.

Spending subject to appropriation

    Subject to the availability of appropriated funds, CBO 
estimates that issuing new regulations would increase the costs 
of the FAA by less than $500,000. Subsequent monitoring by FAA 
would also cost less than $500,000 a year.

Direct spending

    S. 361 would slightly reduce outlays for Social Security 
benefits in the near term if significant numbers of pilots who 
would otherwise retire instead worked until age 63.
    Eligible people can file for Social Security retirement 
benefits beginning at age 62. For each month that they delay 
filing, their eventual benefit increases; that actuarial 
adjustment is meant to give retirees approximately the same 
lifetime benefits regardless of their age at filing.
    A hypothetical pilot, because of his or her high lifetime 
earnings, probably has a primary insurance amount (PIA, the 
figure on which all Social Security benefits are based) at or 
near the maximum. In 2002, that PIA will be about $1,800. A 
pilot who reaches 62 in 2002 could collect 77.5 percent of 
that, or about $1,400 a month. But if he or she delays filing 
for a year, the monthly check would be 83.3 percent of PIA, or 
about $1,500, even before Social Security's annual cost-of-
living adjustment (COLA). For that pilot, the first-year 
savings to the Social Security program would be about $17,000 
and annual costs thereafter about $1,200.
    There is little information, though, with which to 
determine how many of the roughly 1,400 pilots who would 
qualify each year resemble that example. Many of them would 
still file at 62, attracted by the combination of $17,000 in 
Social Security benefits plus their airline pension. Others 
would want to keep working in aviation, though not as pilots, 
deferring their Social Security benefits until ``normal 
retirement age,'' or NRA. (Until that age--which will be 65 
years and 6 months for people who reach 62 in 2002--Social 
Security benefits are reduced or erased when a worker has 
substantial earnings.) Neither of those groups would have 
reason to change those plans is S. 361 were enacted.
    Male workers who do not face mandatory retirement 
overwhelmingly file at either age 62 or NRA. Only about 20 
percent file between those ages. (Research suggests that 
retirees who apply at 63 and 64 were often waiting for 
something--such as a company pension or a spouse's retirement--
before filing.) CBO assumes that, if S. 361 were enacted, about 
20 percent of pilots would likewise delay filing until age 63. 
Thus, for each group of 1,400 pilots affected, about 300 would 
postpone filing for Social Security. Their total Social 
Security benefits would be lower by about $5 million in the 
first full year but about $400,000 higher each year thereafter. 
Those amounts would increase gradually because of COLAs. Over 
the 2002-2011 period, total savings would be between $3 million 
and $5 million annually (see table). In the long run--well 
beyond CBO's 10-year horizon--Social Security savings would be 
zero, because the savings and the costs would offset each 
other.

                       ESTIMATED EFFECT OF S. 361 ON OUTLAYS FOR SOCIAL SECURITY BENEFITS
----------------------------------------------------------------------------------------------------------------
                                                     By fiscal year, in millions of dollars--
                                 -------------------------------------------------------------------------------
                                   2002    2003    2004    2005    2006    2007    2008    2009    2010    2011
----------------------------------------------------------------------------------------------------------------
                                           CHANGES IN DIRECT SPENDING

Retired-worker benefits:
    Gross savings...............      -2      -5      -5      -6      -6      -6      -7      -7      -8      -9
    Offset cost.................       0       *       1       1       2       2       3       4       5       5
      Subtotal..................      -2      -5      -4      -4      -4      -4      -4      -4      -3      -3
Auxiliary benefits \1\..........       *      -1      -1      -1      -1      -1      -1      -1      -1       *
      Total outlay changes......      -3      -5      -5      -5      -5      -5      -4      -4      -4      -4
----------------------------------------------------------------------------------------------------------------
\1\ Benefits to eligible spouses, children, or survivors of retired workers.
* =Less than $500,000.

Note.--Components may not sum to totals because of rounding.

Revenues

    As a result of small and offsetting effects, S. 361 would 
have a negligible net effect on federal revenues. The taxable 
pension benefits of pilots are reduced when pilots retire 
before the mandatory retirement age, currently age 60. By 
increasing the mandatory retirement age to 63, S. 361 would 
reduce the taxable annual pension benefits for pilots who 
retire before age 60 more than under current law. The reduction 
in taxable annual pension benefits would result in a slight 
decrease in federal revenue. However, employers' pension 
liability would be reduced and employers may decrease the 
amount of deductible contributions made to their defined 
benefit pension plans. As a result, some employers may have a 
higher taxable income under S. 361 than under current law. The 
increase in employers' taxable income would result in a slight 
increase in federal revenues. S. 361 also would have an 
additional negligible effect on federal revenues because some 
pilots may choose to postpone retirement after age 60, thereby 
postponing taxable pension distributions that otherwise would 
have been made under current law mandating retirement for 
pilots at age 60. However, once pension distributions 
commenced, the annual benefit would be greater than that made 
under current law. Overall, total pension benefits would be 
actuarially equivalent under current law and under the bill. 
Therefore, there would be a slight reduction in federal 
revenues in the early years after enactment of this proposal as 
some pilots would postpone taxable pension distributions, but 
there would be a small and offsetting increase in federal 
revenues in the later years after enactment as those pilots who 
postponed retirement would receive larger taxable pension 
benefits than under law.
    Pay-as-you-go considerations: The Balanced Budget and 
Emergency Deficit Control Act sets up pay-as-you-go procedures 
for legislation affecting direct spending or receipts. JCT 
estimates that S. 361 would affect taxable pension benefits of 
certain pilots and taxable income of employers of certain 
pilots, but that overall there would be a negligible effect on 
federal revenues. Spending for Social Security, however, is 
specifically excluded from pay-as-you-go rules.
    Intergovernmental and private-sector impact: S. 361 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would have no impact on state, local, or 
tribal governments.
    Estimate prepared by: Federal Costs: Mark Hadley and Kathy 
Ruffing; Revenues: Robert Taylor; Impact on State, Local, and 
Tribal Governments: Victoria Heid Hall; and impact on the 
Private Sector: Jean Talarico.
    Estimate approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis and G. Thomas Woodward, Assistance 
Director for Tax Analysis.

                      Regulatory Impact Statement

  In accordance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee provides the 
following evaluation of the regulatory impact of the 
legislation, as reported:

                       NUMBER OF PERSONS COVERED

  Under section 1, former pilots who have been forced to retire 
because of the current mandatory retirement age, but are 
younger than 63 years of age, would no longer be subject to the 
prohibition and would potentially be eligible to fly as a 
commercial airline pilot. Pilots under the age of 60 would 
eventually have the option to fly for a longer period of time.

                            ECONOMIC IMPACT

  Due to section 1, some older pilots may decide to continue 
flying beyond their expected Age 60 retirement dates, and thus 
continue to earn a salary. Some younger pilots may not be 
promoted as quickly if more senior pilots continue flying. 
Airlines may incur the additional costs of employing some of 
their most senior pilots, who have the highest pay scales, for 
a few additional years. Those additional costs would be offset, 
at least in part, when the airlines are able to forego the 
costs of training younger pilots to replace those who otherwise 
would have retired because of the Age 60 Rule. If a pilot 
shortage were to affect small and rural communities, section 1 
may economically benefit those communities by increasing the 
supply of pilots.
  Section 2 may cause air carriers to incur the costs of 
additional or more stringent medical, cognitive, or proficiency 
testing for pilots who have reached the age of 60 if the FAA 
determines that such testing is necessary to ensure the safety 
of air transportation. This section may also cause air carriers 
to incur costs associated if the FAA sets crew pairing 
standards that, for example, limit the number of individuals in 
a flight crew who are over the age of 59.

                                PRIVACY

  within the air transportation system, the overriding need to 
ensure safety has long been settled with respect to pilots' 
expectations of privacy. Pilots who choose to fly beyond their 
60th birthdays may be subjected to additional certification 
testing or crew pairing standards if the FAA determines that 
such measures are necessary to ensure the safety of air 
transportation operations.

                               PAPERWORK

  Under section 1, the FAA would incur additional paperwork 
associated with the change in the current age limit. In 
addition, under section 2, air carriers and the FAA may have 
additional paperwork if the FAA decides to impose crew pairing 
standards or additional certification testing for pilots who 
have reached the age of 60.

                      Section-by-Section Analysis


Section 1. Age and other limitations

  Section 1 would increase the regulatory age limit imposed on 
commercial airline pilots from 60 years of age to 63 years of 
age. Currently, federal rules prohibit air carriers certified 
under part 121 of the Federal Aviation Regulations from using 
the services of a pilot who is 60 years of age or older and 
prohibit pilots who are 60 years of age or older from flying 
part 121 aircraft operations. See 14 C.F.R. 121.383(c). Part 
121 sets the operating requirements for commercial, civil 
aircraft (with more than nine seats or 7,500 pounds payload). 
This section would go into effect six months after the 
enactment of this Act to give the FAA time to accommodate this 
change.

Section 2. Reservation of safety authority

  Section 2 makes it clear that the Act does not change the 
authority of the FAA to take steps to ensure the safety of 
airline operations involving pilots over the age of 59. For 
example, the FAA could require that pilots who have reached the 
age of 60 undergo additional medical, cognitive, or proficiency 
testing and that crew pairing standards are set for crews with 
such pilots.

                      Rollcall Votes in Committee

  In accordance with paragraph 7(c) of rule XXVI of the 
Standing Rules of the Senate, the Committee provides the 
following description of the record votes during its 
consideration of S. 361:
  Senator McCain offered an amendment to change the maximum age 
limit for pilots to 63 years of age and to make it clear that 
the increased age limit does not change the FAA's safety 
authority. On a rollcall vote of 13 yeas and 8 nays as follows, 
the McCain amendment was adopted.
        YEAS--13                      NAYS--8
Mr. McCain                          Mr. Hollings
Mr. Stevens                         Mr. Inouye
Mr. Burns\1\                        Mr. Rockefeller
Mr. Lott                            Mr. Dorgan
Mrs. Hutchison                      Mr. Wyden
Ms. Snowe                           Mr. Cleland
Mr. Brownback\1\                    Mrs. Boxer
Mr. Smith\1\                        Mr. Edwards
Mr. Fitzgerald
Mr. Ensign
Mr. Allen\1\
Mr. Kerry
Mr. Breaux

    \1\By proxy

                        Changes in Existing Law

  In compliance with paragraph 12 of rule XXVI of the Standing 
Rules of the Senate, the Committee states that the bill as 
reported would make no change to existing law.

  ADDITIONAL VIEWS OF SENATORS HOLLINGS, INOUYE, ROCKEFELLER, DORGAN, 
                 CLELAND, BOXER, EDWARDS, AND CARNAHAN

  During the Executive Session on February 15, 2001, several 
issues were raised during the consideration of S. 361. We would 
like to state our concerns about the legislation approved by 
the Committee and express our interest in working to change the 
legislation prior to Floor consideration of S. 361.
  The bill as drafted poses two major issues. First, should 
Congress repeal the FAA regulation known as the Age 60 Rule (14 
CFR 121.383(c)) and establish by law a new mandatory retirement 
age of 63 for airline pilots? Second, is there an effective 
protocol to determine which pilots over the age of 60 are fit 
to fly given the knowledge that the aging process causes a 
decline in cognitive functions that affect piloting skills?
  We do not believe that Congress should repeal the FAA 
regulation known as the Age 60 Rule (14 CFR 121.383(c)). The 
Age 60 Rule was promulgated by the FAA pursuant to its 
statutory authority to issue and enforce regulations governing 
air safety. Congress has vested air safety regulatory authority 
in the FAA, and over the years, the agency has exercised its 
authority in a prudent and impartial manner to ensure the 
safety of air transportation.
  In this case, the FAA has devoted time, resources and 
expertise to explore exhaustively the aeromedical issues 
associated with the Age 60 Rule. For instance, in 1995, after 
concluding an exhaustive rulemaking process for regional 
(commuter) air carriers, the FAA applied all part 121 air 
carrier safety rules, including and particularly the Age 60 
Rule, to regional carriers. More recently, the Senate 
Appropriations Committee directed the FAA to conduct a study 
(Senate Report 106-55 on the Department of Transportation and 
Related Agencies Appropriations Act for FY 2000) of all 
available non-scheduled commercial (and noncommercial) data 
concerning the relative accident data correlated with the 
amount of flying by pilots as a function of their age for 
pilots age 60 to 63 and comparing it with all 4-year groupings 
of scheduled commercial (and noncommercial) pilots declining 
from age 60. In addition, it directed the FAA to compare 
discernable groups in their entirety and track accident 
frequency as a function of age. The findings were reported to 
Congress on March 7, 2001 and reaffirmed earlier conclusions 
that a ``U''-shaped relationship exists between the age of 
pilots and accident rate. The findings were similar to 
Golaszweski's conclusions (1983, 1991, 1993) that accident 
rates decrease for younger pilots as they age, then level off 
in the middle years, then begin to increase as they age. In 
this study, conducted by the FAA's Civil Aeromedical Institute 
(CAMI), the accident rates for pilots between the ages of 60 
and 63 were higher that immediately preceding age cohorts per 
100,000 flight hours.
  Congress should rely on the agency's safety judgement as 
sound and authoritative. The action by the Committee to change 
and codify this regulation only serves to undermine the 
authority of the FAA to administer the air safety regulations. 
The federal courts in several cases over the past two decades, 
most recently in PPF v. FAA, 118 F. 3d 758 (D.C. Cir. 1997), 
have upheld the FAA in its decisions regarding this particular 
regulation, and have never found the agency's decision-making 
process to be arbitrary and capricious.

                                  

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