The committee will come to order. I now recognize mr. Loviondo for a motion. Pursuant to rule 1 a 1 on transportation infrastructure, i move that the chairman be authorize today declare recess during todays hearing. Question on the motion, all those in favor signify with saying aye. The ayes have it and the motion is agreed to. I want to thank everybody for being here today. This is an important hearing were having here today talking about what i consider extremely important legislation and i believe everybody on the committee, both sides of the aisle, believe that the reauthorization of the faa, reforming it to make it a better system for all americans is extremely important to all of us. The way america travels, moves goods and conducts Business Today depends on an efficient syst system. This is especially true of our Aviation System. The fact is the fccs infrastructure is increasingly obsolete and its technology is still cemented in the last century. To just quote my colleague, my esteemed colleague from oregon in a hearing we had not too long ago, he said that the faa is the only agency of government worse at procurement than the pentagon. Congress has tried to reform it. It didnt stick. We got to try to Something Different to get it to be more agile, to give us 21st century equipment, software we need. Then theres the shape of the fcc bureaucracy. Congress back in 1986 gave the fcc license to reform practices to deal with the decisionmaking process but that didnt take either. He goes on to propose a 21st century make it selffunding, selfsufficient and not subject to appropriations for shutdowns or anything else that a Congress Might imagine. I think we can see by that statement and as we talk here today we agree there is a problem. There is a solution at hand, its just a form that were going to debate vigorously on what we think is the best outcome. But assau a result over these p 30 years, the shocking amount of taxpayer dollars that weve wasted over the last three and a half decades, over 50 billion. Thats why this is one of my highest priorities this year is a comprehensive fcc reform and reauthorization bill. So far this year weve held reauthorizations looking at air transportation, manufacturing, airports and new innovations. Today well focus on the need for air Traffic Control reform, divesting the High Tech Service 24 7 Service Business from government and shifting it to an independent, not for profit entity. Its appropriate we are holding this hearing during infrastructure week. No other single infrastructure reform has as much potential to improve travel for the average american flier or to ensure our hard earned leadership in aviation. Although our Aviation System is safe, the fcc structure in how air traffic is managed have been broken for decades. The decision we make in the reauthorization bill this year will either move us toward a 21st century Aviation SystemAmerica Needs or do moom us to repeating the failures of the past. Everyone should be reminded of what happens if we choose the status quo. It means our system will be subject to more budget con trains, sequestration, and threats of Government Shutdowns. Sequestration isnt gone. In 2013, sequestration led to furloughs and reduced operations, controller hiring and training suffered, and fcc bureaucrats tried to shut down contract towers. Fiscal constraints continue in the federal budget and thats not going to change any time soon and it may get worse. We continue to rely on the unstable, dysfunctional annual appropriations cycle. We have had no standalone transportation appropriations bill since 2006, and over that time Period Congress has passed 42 continuing resolutions to keep government doors open. The fcc also relies on authorizing legislation and it took congress 23 shortterm extensions over five years before it passed previous longterm fcc authorization bill. Under these conditions, the fcc bureaucracy has been trying to undertake a high tech modernization of air Traffic Control systems for over three decades. Its not working. Its never going to work. Sadly, in todays digital age, our controllers still manage planes with paper strips which of course i have brought a few to remind people of that. If anybody hasnt been in a control tower, they ought to go into a control tower and see it. Some argue that the latest attempt to modernize next gen showing some signs of progress. We know any progress is incremental at best and only in locations where the fcc partnered with the private sector. Lets remember the name next gen was really just a rebranding of the faas failed efforts to modernize the system. Its just a marketing term, not an Actual Technology or innovation, but it sounds catchy so congress will fund it year after year. The bottom line is there should be far more progress by now. Congress has provided more than 7. 4 billion for next gen since 2004. According to the faas own calculations, the return on taxpayer 7. 4 billion invested has only been about 2 billion in benefits and weve still got a long way to go. According to the dot Inspector General in 2014, the projected initial cost for next gen was 40 billion but theyve said it could double or triple and be delayed another decade. Over the years the faa has described next gen as transformation of americas air Transportation Network and said it would forever redefine how we figure the system. In 2015 the National Research council confirmed what was already becoming painfully clear, according to the nrc, the original version of next gen is not what was being implemented. It is not broadly trance forational and is not fundamental change in the way the faa handles air traffic. Only in the federal government would such a dismal record be considered success. While the faa continues to fall behind, the rest of the world is moving on with new technologies without the United States involvement. Nothing less than americas leadership is at stake. In an industry weve pioneered and led since kitty hawk. Starting in the 1980s, since 1995 Congress Passed various reforms to allow the faa to run more like a business. Procurement reform in 1995 to develop a more flexible Acquisition Management system. Additional forms in 1995 exempt the faa from most federal personal rules and alaw them to implement more flexible rules for hiring, training and societsociet assigning personnel. Additional reforms in 1996 allow the faa to negotiate pay. Organizational reforms in 2000 to establish a coo position. Additional reforms to allow greater pay so the faa could recruit good candidates, particularly for a coo position. Additional reform in 2000 by the executive order to create the air traffic organization. Organization reforms in 2003 to establish the joint planning and Development Office to better coordinate next gen. Reforms in 2012 to establish the chief next gen officer. Property management reforms in 2012 to allow a Better Process for realignment and consolidation of facilities, all have failed to result in the faa being run more like a business. The faa has always performed like a massive bureaucracy and will continue to. It is the only dot agency that serves as both Transportation Service provider and safety regulator. Regulating itself is an inherit conflict of interest and separating the two functions is simply good government. Its time for reform thats truly transformational. Real change can be difficult. Weve learned that over the years. But the broader lesson over the last several decades is that the true risk lies in doing nothing. Last years bill will serve as a framework for new legislation, but we are open to change. We want to talk to people and get their ideas and thats what we hope here today. As we continue to move forward, our air traffic reform proposal will be based on the following principles. Create an independent, not for Profit Corporation to provide air Traffic Services. Fund the new Service Provider by fees assessed for air traffic service. Free the new Service Provider from governmental dysfunction, political interference and the uncertainty of the federal budget process. Create a government structure thats right sized and balanced and fiduciary responsibility. Thats a legal term. If youre on a board of directors in the United States and you have fiduciary responsibility, its not to who the board. Its to the organization. Thats the law, not some pie in the sky. People can be removed and prosecuted if theyre not doing their fiduciary responsibilities. Ensure connectivity, access to the air space and the continuity of air services for general aviation, small and Rural Communities, and airports that serve them. Let me for the record remind people, im from a rural district. I have one very small airport. I doubt i have more than a handful of people that work for the Airline Industry, but i have several hundred ga pilots. So if anybody thinks that i want to harm the ga or Rural Communities, they just dont know who i am and where im from, because im committed to make sure what we do protects small and Rural Communities and protects the ga community. The ga community is over a billion dollar industry. Why in the world would i want to harm an industry that produces so much good for this country . We want to ensure full access to air space and air services to support our Armed Services and their National Security mission. Free the air Traffic Control business from the faas bureaucratic procurement process and the appropriation cycle. End the federal governments decades long pattern of costly delayed failed management of modernization. Give the new Service Provider the ability to Access Financial markets, Leverage Private funding for multiyear Capital Projects needed to modernize the system. Allow the faa to focus on its Safety Mission and certification mission. Ensure continued oversight of the air Traffic Services by the faa, dot and congress, and of course lots of people are out there saying that thats not what were going to do. Let me be clear, the faa, the department of transportation and congress will still maintain vigorous oversight to the air space of this country. And ultimately allow all users of the system including Airline Passengers in the general public to realize the significant benefits of modern air Traffic Control systems including decreases in delays, flight times and congestion. Previous efforts to reform the faa and modernize the system teach us that the only real way to these benefits is to get the government out of the way. As president Ronald Reagan said, government is not the solution to the problem, government is the problem. And we see all over the world people turning to the private sector, whether its europe or asia, australia, new zealand, canada, look around the world. Countries, governments, are looking to partner with the private sector because they see they do it better. Since the introduction of the air act over a year ago, this has been an ongoing process of education and discussion. Weve held over 130 meetings with stakeholders including both supporters and opponents of the air act. Weve had numerous meetings with members of the house, the senate, the white house and other committees. These meetings have been extremely productive and give us new ideas to improve the legislation. As i said, i want to hear the same thing from todays witnesses, what are your ideas that we can build upon on the principles that ive outlined. Weve also gone to canada to see their system first hand and we will go again with more members and i would encourage any member that wishes to go on may 25th, well be heading up to canada and coming back on may 26. Again to go up there not so we can imitate their system but to learn from the lessons of their system, to learn to fix our own broken structure. Over 60 countries have followed this kind of reform and it has worked in each case. Opponents of reform either ignore the evidence or must believe we are less capable than the other 60 countries, and for me thats a bit outrageous. Were the United States of america. We can do this. We can do this better than anybody else so its time for us to take a look and to move forward. Air Traffic Control is not inherently a government function. Its a 24 7 technology service. For those who worry that the system is too complex, i would say this. The most complex thing in the air space is not the air Traffic Control system. Its the airplane. Its the people at boeing and airbus and cessna and the people that build these aircraft. Thats the most complicated thing in the system. The faa already oversees those highly sophisticated private sector, aircraft and maintenance at arms length. We dont build airplanes today, the government does and thats the most complex thing in the system. Overseeing air Traffic Control is not going to be more complicated than anything else that the faa already does. This transformational reform will fix our obsolete and dysfunctional air Traffic Control structure, move beyond the wasteful status quo and benefit all the users of the system. Ultimately reform will give the american flyer a safe, efficient Aviation System using 21est century technology, using more direct routes, less fuel which will be better for the environment and less wasted time on the tarmac. Ladies and gentlemen, again, i thank the witnesses for being here and i will yield to the Ranking Members for Opening Statement. Thank you, mr. Chairman. Jim would have been proud. Thats the longest Opening Statement since former chairman jim overstar, but you only did it in one language. We could have had a translation. Thanks for the time, mr. Chairman. First off, i spent over an hour with dr. Dillingham from the gao who i would say is the foremost expert and the longest term critic of the faas procurement process and moving toward a 21st century system. Im not aware that any other member of the committee has spent time with him and he has not been invited to testify. He has a different story to tell today. He thinks it will be a mistake and im paraphrasi paraphrasing but we are now on the cusp of a 21st century system that will be the envy of the world, and he and other experts say a massive change now where you cleave the faa into parts, you leave the most vital thing to our manufacturers certifications subject to appropriations, sequestrations and shutdowns, you leave the most vital thing that is most important to the American Public which is safety and oversight of safety subject to sequestration, shutdowns and political meddling. The only thing that gets moved is the ato, and the ato would be moved and essentially effectively controlled by the airlines. I know the airlines arent here today, perhaps because they havent looked so great recently in public. And id also note that the airlines themselves have had outages 36 times, major outages 36 times since 2015. Im not aware that the national air Traffic Control system has had a major disruption, with the exception of deliberate sabotage by a contractor who knew how to get the system and the backup system. But the airlines on their own with no sabotage have managed to melt down their dispatch and their reservation systems 36 tim times, stranding millions of people, so they can do it better, right . Thats an interesting question. So i think that members of this Committee Want to be educated on this, should take and maybe we can invite them here and spend that hour with dr. Dillingham and hear the story of how things have changed and the progress were making and the potential for disruption at this point in time. In terms of funding, the faa is currently projected over the next decade to be 97 selffunded. Unfortunately, the way our colleagues around here and the budget process works, despite the fact theyre selffund, they can be sequestered or shut down. Thats a simple, simple fix. Take it off budget. Make it into a trust funded program. They are raising the revenues. Thats a simple fix. No, were going to cleave it in half, put vital functions over here, still subject to sequestration shutdown and take this one part and here, still subject to sequestration shutdown. How are though going to sell it . The airlines have told me time and time again they hate the ticket tax. They say thats our money. I say no its not your money. I buy a ticket, i pay the tax. The tax goes to the government its not your money. That affects the price of the ticket and competition and everything else. Its a horrible thing. If they do away with the 2ik9 tax, there goes 70 of rev hew. Cau congress will have no say over that. There will be a board and a construct which is well show here for the person running t