(July 17 edit – apparently the House is postponing consideration of this bill until they get the vote count together Majority Leader McCarthy did not mention it on Friday afternoon when he gave out the floor schedule for this week. However, the Rules Committee has not withdrawn the amendment deadline of noon today, and amendments continue to trickle in. Original article follows.)

July 13, 2017

The House of Representatives may consider the Federal Aviation Administration reauthorization bill (H.R. 2997) as early as next Wednesday since the House Rules Committee has announced an amendment schedule for the bill. The bill would split up the FAA and turn air traffic control (ATC) provision over to a private, non-profit corporation.

Any members of the House who intend to offer amendments to the FAA bill must draft those amendments to this modified version of the bill and must submit the amendments to the Rules Committee by noon on Monday, July 17.

This expedited schedule allows the House Budget Committee, the House Science Committee and the House Ways and Means Committee to abdicate their formal role in shaping their parts of the legislation in exchange for the Rules Committee “self-executing” changes in the legislation according to the wishes of the committee chairmen. Here are the changes made in the Rules Committee Print that differ from the bill as amended and reported from the T&I Committee on June 27:

• House Budget Committee. The Budget Committee insisted on jettisoning the amendment by Lou Barletta (R-PA) adopted in the T&I Committee markup to section 101 of the bill that had increased annual contract authority for the Airport Improvement Program above the Congressional Budget Office’s discretionary spending baseline. And to make the Shuster bill fit into the larger budget scheme, the Budget Committee also added section 643 of the bill, which lowers the Budget Control Act spending caps in 2021 (the last year the caps are scheduled to take effect under current law) by the “amount of discretionary budget authority appropriated for fiscal year 2020 for air traffic control under the [FAA Operations, Facilities and Equipment, and Research, Engineering and Development] discretionary accounts…” ( Note: This last bit is odd language – it doesn’t say who is responsible for determining the precise dollar amount of Operations funding dedicated to ATC, which at a granular level is a bit of a judgment call).
• House Science Committee. The Science Committee has jurisdiction over the FAA’s research and engineering program, so title VII of the bill has been added authorizing funding for FAA RE&D, creating a new Associate FAA Administrator for Research and Development, and making many other changes in the bill related to RE&D. Title VII is summarized in the new section-by-section analysis of the Rules print here.
• House Ways and Means Committee. The Rules Committee print adds pro forma Ways and Means provisions extending current law Ways and Means taxes and Trust Fund authority through the end of fiscal year 2023. However, the Ways and Means title also adds section 803, which dodges the issue of how to change the current aviation tax system to fund a post-ATC federal role. The provision added by the Rules print lowers every existing federal excise tax on aviation by 20.0 percent in 2021, 20.1 percent in 2022 and 20.23 percent in 2023. But after September 20, 2023, the taxes (if extended by future legislation with a simple date change) snap back to the pre-2021 rate. The title of section 803 is in fact “Taxes temporarily modified after September 30, 2020.” The temporary nature of the tax reductions may be about the Congressional Budget Office score of the whole bill (making sure that the revenue baseline for 2024-2027 reflects the current tax rates). But it also indicates that the Ways and Means Committee has not yet made the hard decisions about how they will adjust the excise tax system once air traffic control is removed from the federal budget (i.e. what segments of the aviation system should be taxed, and at what levels, just to pay for the Airport Improvement Program?).

Yesterday, the Congressional Budget Office released its score of H.R. 2997 as approved by the T&I Committee. The score is obviously incomplete in that it does not include the effects of the tax reductions, discretionary spending cap reductions, and research authorizations added by the Rules Committee Print. However, the big issue with the CBO score is a conceptual one. Even though the bill clearly says that the proposed ATC corporation would not be a part of the federal government and is not subject to the budget and accounting provisions of title 31 U.S.C. (see page 59 of the Rules Print), CBO says that doesn’t matter:

Although the proposed corporation would be independent and autonomous, in CBO’s view it would effectively act as an agent of the federal government in carrying out a regulatory function. Hence, in keeping with guidance specified by the 1967 President’s Commission on Budget Concepts, the proposed corporation’s cash flows should be recorded in the federal budget. More specifically, fees charged by the proposed corporation should be recorded as federal revenues, and its expenditures should be classified as federal direct spending.

The Office of Management and Budget disagrees with this conceptual judgment call and scores the cash flow of the corporation as part of the government. (See this background piece in ETW from three months ago explaining the conceptual issue.)

In the last Congress, the T&I Committee approved a similar FAA bill but it never got as far as the Rules Committee scheduling a hearing. The fact that Speaker Ryan and Majority Leader McCarthy have scheduled this year’s FAA bill for floor consideration may mean that T&I chairman Bill Shuster (R-PA) has the votes to bring up and pass the bill this time – or it may simply mean that the initial whip counts are close enough to the 218 votes necessary to pass a bill that party leaders think (hope) that they can convince enough Republicans to support the bill between now and Wednesday that they, together with a handful of Democrats who support the legislation, can get to 218.

The White House is actively lobbying Republicans to support the legislation – The Hill reports that National Economic Council director Gary Cohn was on Capitol Hill yesterday pitching ATC reform to skeptical supporters of general aviation.

Opposition to the bill comes from a variety of groups: the general aviation lobby that likes the generous financial deal they get from the ATC system the way it is; rural interests who worry that a corporation might affect the unprofitable ATC services at their airports; FAA labor unions (other than the air traffic controllers union, which supports the bill); the House and Senate Appropriations Committees who don’t want to lose jurisdiction over the bulk of the FAA; and people who are resistant to the concept of privatization in general.

The details of the pending legislation (as well as the Senate FAA bill, which does not split up the FAA), as well as the full 40-year history of the idea of separating air traffic control from safety regulation, can be found on Eno’s FAA Reform Reference Page at www.enotrans.org/faareform