The committee will come to order. I now recognize mr. Lobiondo for a motion. Pursuant to rule 1a1, i move that the chairman be authorized to declare a hearing on todays hearing. All those in favor signify by 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. And were talking about what i consider extremely important legislation. And i believe everybody on the committee, both sides of the aisle, believes reauthorization of the faa, reforming it, is extremely important to all of us. The way america travels, moves goods, and conducts Business Today depends on an efficient transportation network. And in order to remain competitive, we need a 21st century infrastructure with modern 21st industry technology. This is especially true of our Aviation System. But the fact is the faas infrastructure is increasingly obsolete and its technology is still cemented in the last century. To quote my colleague, my esteemed colleague from oregon in 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 Something Different to get it to be more agile, to give us 21st Century Equipment and software we need. Then theres the issue of the actual sort of shape of the faa bureaucracy. Congress in 1986 gave the faa license to reform personnel practice, to deal with midlevel management bulge, but that didnt take either. And he goes on to propose a 21st century constitutionally chartered corporation to accomplish these goals and make it selffunding, selfsufficient, and not subject to appropriations or shutdown or anything else that Congress Might imagine. As we talk here today, we agree there is a problem. There is a solution at hand. Its just the form that were going to debate vigorously on what we think is the best outcome. But as a result, over these past 30 years, the shocking amount of taxpayer dollars that weve wasted over the last 3 1 2 decades, over 50 billion, thats why this is one of my highest priorities this year, is a comprehensive faa reform and reauthorization bill. So far this year weve held reauthorization hearings looking at air transportation, manufacturing, airports, and new entrants and 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 forprofit entity. Its an appropriate were 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 hardearned leadership in aviation. Although our Aviation System is safe, the faas structure and how air traffic is managed have been broken for decades. The decision we make in the faa reauthorization bill this year will either move us toward a 21st century Aviation System america needs, or doom us to repeating the failures of the past over and over again. Everyone should be reminded of what happens if we choose the status quo. It means our system will be subject to more government restraints, sequestration and threats of Government Shutdown. Sequestration isnt gone. In 2013, sequestration led to full l furloug furloughs. Fiscal constraints continue to be tight in the federal budget. Thats not going to change anytime 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 faa also relies on authorizing legislation, and it took congress 23 years before it passed a long term faa bill. We have been trying to undertake a high tech modernization of the air Traffic Control system for over three decades. Its not working and its never going to work. Sadly, in todays digital age, our controllers still manage planes with paper strips, which ive brought a few to remind people of that. If anybody hasnt been to a control tower, they out ght to to a control tower and see of this some argue that nextgen is showing signs of progress. But we know that progress is incremental is best and only in locations where the faa partnered with the private sector. The name nextgen was just a rebranding of failed efforts to modernize the system. Nextgen is just a marketing term, not an Actual Technology and innovation but it , but it catchy to congress will fund it year after year. Money has never been the problem. Congress has provided 7. 4 billion for nextgen since 2004. Results of the problem. According to the faas own calculation, the 7. 4 billion invested has only yielded 2 billion in benefits. According to the d. O. T. Inspector general, the projected initial cost for nextgen was 40 billion. But theyve said it could double or triple and be delayed another decade. Over the years the faa has described nextgen has transformation of americas air transportation network. Theyve said it will redefine how we manage the system. But in 2015, the National Research council confirmed what was already becoming painfully clear. According to the nrc, the original version of nextgen is not what was being implemented. It is not broadly transformational 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 a 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 that we pioneered and have led since kitty hawk. Some have proposed targeting reforms to fix the faas problems. But thats an approach we have already tried many, many times. Starting in the 1980s. Since 1995, congress has passed many reforms to allow faa to run more like a business. Procurement reform for a more flexible Acquisition Management system. Additional reforms in 1995 exempt the faa from most federal personnel rules and allow the faa to implement more flexible rules for hiring, training, compensating, and assigning personnel. Procurement reforms in 1996 developed a Cost Accounting system. Additional personnel reforms in 1996 allowed the faa to reorganize pay. Additional reforms to allow greater pay to 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. Organizational reforms in 2003 to establish the joint planning and Development Office to better coordinate nextgen. Reforms in 2012 to establish a chief nextgen officer. Property management reforms in 2012 to allow a Better Process for realignment and consolidation 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 d. O. T. Agency that serves as Service Provider and safety regulator. Regulating itself is an inherent complication of interest. Its time for reform that is truly transformational. Real change can be difficult. Weve learned that over the years. But the broader lesson over the last several decades is the true risk lies in doing nothing. Last years bill that passed out of committee 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 to hear today. As we continue to move forward, our air Traffic Control 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 governance structure that is right sized and balanced and a board with sole fiduciary responsibility to the association, and i need to repeat that, fiduciary responsibility, thats a legal term. If youre on a board of directors in the United States, and you have the fiduciary responsibility, its not to who pointed you to the board. Its to the board, to the organization, who youre responsible for. Thats the law. Thats not pie in the sky. People can be removed and prosecuted if theyre not doing their fiduciary responsibilities. Ensure connectivity, access to the airspace, and the continuity of air services for general aviati aviation, small and Rural Communities, and airports that serve them. Let me for the record remind people, i am 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 committee to make sure that we do protects small and Rural Communities and protects the ga community. The ga community is over a billiondollar 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 airspace 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 appropriations cycle. And the federal governments decadeslong pattern of costly delay, failed management of modernization. Give the new Service Provider the ability to 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, d. O. T. , and congress. Of course lots of people are saying thats not what were going to do. But let me be clear, the faa, the department of transportation, and congress will still maintain vigorous oversight to the airspace of this country. And ultimately allow all users of the system, including Airline Passengers and the general public, to realize the significant benefits of modern air Traffic Control system including decreases in delays, flight times, and congestion. The only way to realize 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 its asia, its 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 witness witnesses. What are the ideas that we can build upon, upon the principles that ive outlined . Weve gone to canada to see their system firsthand, and i encourage any member who wishes to go, may 5th, thursday, in the afternoon, well be heading up to canada and coming back may 26th, to again, go up there, not so we can imitate their system, but to learn from the lessons of their system, to learn to help to fix our own broken structure. Over 60 countries have followed this kind of reform and its worked in each case. Opponents of reform either ignore the evidence or must believe we are less capable than the other 60 countries. To 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 governmental 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 airspace is not the air Traffic Control system. Its the airplane. Its the people at boeing and airbus and the cessna, the people that build these aircraft. Thats the most complicated thing in the system. And the faa already oversees those highly sophisticated private sector aircraft, manufacturing, and Maintenance Operations at arms length. We dont build airplanes today. The government does. Thats the most complex thing in the system. Overseeing air Traffic Control is not going to be more complicated than anything else the faa already does. The transformation reform will fix our obsolete air Traffic Control structure, move beyond the wasteful, inefficient status quo, and benefit all the users of the system. Ultimately, reform will give the american flier a safe, efficient Aviation System using 21st Century Technology to ensure more ontime departures, more direct routes, using 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. With that i will yield to the Ranking Member for an Opening Statement. Thank you, mr. Chairman. Jim would have been proud, thats the longest Opening Statement since chairman jim oberstar, but he only did it in one language. We could have a simultaneous translation, perhaps. Thanks for the time, mr. Chairman. First off, i spent about 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 Movement Toward a 21st century system. And im not aware that any other members of the committee has spent that time with him, and he has been invited to testify. He has a different story to tell today. And he thinks it would be a mistake, and im 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, mitre corporation, others, say a massive change other will cleave the faa into parts. You leave the most vital thing to our manufacturers, certification subject to appropriations, sequestrations, and shutdowns. You leave the most vital thing that is important to the american public, which is safety and oversight of safety, subject to sequestration, shutdowns, and political meddles. 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 i would 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 reservations systems 36 times, stranding millions of people. So they can do it better, right . Thats an interesting question. So i think that members of this committee who want to be educated, maybe we can invite him in here and spend an hour with dr. Dillingham and hear about the process were making and the potential for disruption at this time. In terms of funding, its projected over the next decade to be 97 selffunded. Unfortunately the way our colleagues around here and the budget process works, despite the fact that theyre selffunded, they can be sequesterd or shut down. Thats a simple fix. Take them off the budget. No, were going to cleave it in half, put vital functions over here still subject to sequestration and shutdown and take this one part and put it over here and say that somehow theyre going to selffund. The question is how are they going to selffund. The airlines tell me time and time again, they hate the ticket tax, they hate the ticket tax, they say, its our money. I tell them, its not your money, i pay the ticket tax, it goes to the government. They say, no, it affects the price and competition. So if they do away with the ticket tax, there goes 70 of the revenues. What will they put in its place . A per operation charge. We dont know. Congress will have no say over this. Now, there will be a board, if i could have that slide, and a construct which is well show here for the person running the slides, if you could put up come on, come on could you put up this slide, please. And this is the new construct. Anything that affects competition will go through this proces