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"FAA Funding Bill Runs Into Air Traffic Controller Issue"



Thursday, August 14, 2003

FAA Bill Runs Into Air Traffic Controller Issue
Bond Buyer - The American Banker


Airport and aviation industry lobbyists called on Congress yesterday to
approve a four-year, nearly $60 billion bill to renew and expand funding for
Federal Aviation Administration programs, including $14.2 billion for the
airport improvement program, despite Democrats' vow to block the bill
because they say it leaves open the possibility of privatization of air
traffic controller's jobs.

"Both airports and airlines see the larger picture and agree that it is
critical for Congress to approve this bill," said Charles Barclay, president
of the American Association of Airport Executives, at a press conference
yesterday.

The bill would replace the current three-year, $40 billion air travel
funding authorization bill known as the Aviation Investment and Reform Act
for the 21st Century, or AIR-21, which expires Sept. 31, the end of the
fiscal year.

The measure would contribute a "$14.2 billion down payment on the capital
needs of airports" over four years, said Stephen Van Beek, a senior vice
president for policy with Airports Council International-North America, who
also noted that every $1 billion in investment in airport infrastructure
creates about 47,000 jobs.

The pending legislation, known as the Vision 100-Century of Aviation
Reauthorization Act, also includes a provision that would allow airports to
use a portion of their passenger facility charges to pay down debt service
on municipal bonds.

The measure would also provide $500 million per year in grants to help
airports defray the costs of implementing security measures, such as
permanently installing explosives detection equipment. Of the $500 million,
$250 million would have to be appropriated and $250 million would be
automatically provided. The funds would come from the current $2.50-per-leg
passenger security fee.

ACI-NA estimates that it will cost about $5.5 billion to integrate
explosives detection equipment into the behind-the-scenes baggage systems at
airports. Failure to pass the bill could place a dark cloud over the
nation's airports' financial picture, since airports would have to pass the
security costs on to financially embattled airlines.

However, House and Senate Democrats, who oppose a provision in the bill that
could permit the privatization of air traffic controllers at 69 airports
around the nation, disagree that airport's security funding would be
disrupted -- at least in fiscal 2004 -- and intend to oppose the bill.

"There would be no impact on existing planned airport improvement projects,"
said Rep. James L. Oberstar, D-Minn., ranking member of the House
Transportation and Infrastructure Committee, in a conference call yesterday
with labor officials. "The effect of not passing the current authorization
would be for fiscal years beyond 2004."

Democrats "will work vigorously to defeat this partisan bill when we
reconvene in September," Oberstar said.

The bill's detractors believe that farming out air traffic controllers' jobs
to the private sector would jeopardize safety. "I consider the controller
work force the equivalent of a fifth branch of the military,"said Sen. Frank
R. Lautenberg, D-N.J., who was also on the call.

Lautenberg, who intends to oppose the measure in the Senate, believes that
passage of the bill would be tantamount to "paying the ransom and forgetting
the hostages."

Democrats contend that the privatization provision is the result of a
compromise between House and Senate Republicans and the White House, which
had threatened to veto the bill because it originally prohibited the
privatization of controllers.


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