Cspan2s book tv. Transportation secretary elaine chao testified before a Senate Committee on the future of the federal Aviation Administration and the president s proposal to privatize the air Traffic Control system. This is just over two hours. Morning. I want to welcome secretary chao back today. This is her first time beforee the committee since being confirmed. Secretary, i want to thank you for appearing before us today to discuss reauthorization of thehe faa. We arend working hard on a bipartisan basis to produce a bill, hopefully during this work period. And we appreciateld the administrations engagement. Already this year, the committee has held hearings on a range of topics underpinning this legislative effort including safety, drone policy, rural issuing, aircraft certification, consumers concerns, and infrastructure financing. One of the key governance issues we have not yet focused on this yearld but which has been discussed extensively overall the last two years and whether the United States should separatete the air traffic serve provider function from the faa and create a nongovernmental, not for Profit Corporation to do the job. Thet faa runs remarkably safe operations. But outside auditors have dinged the governments performance on deliveryry safety and efficienc upgrades prompting a debate as to the best path forward. Yesterday the president used his pulpits to join those who advocate reform. It is hard to ignore the many independent studies and reviews that documentri the flaws with y current structure. Immi looking forward to a robu discussion today on the merits of the reform proposals as well as ways the administration will seeke. To address concerns of k stakeholders especiallyek those with a rural i perspective. While atc reform has garnered much of the attention this weekt there are plenty of other important issues that require the consideration of thess d. O. And this committee. R the department administers severalry key programs includin essential air Service Program and is responsible for consumer production oversight for the aviation industry. Last month, aviation subcommittee chairman blunt and rankedpa member cantwell held a hearing on recent consumer issues. And im interested to hear directly from the secretary on what stepsps the department has taken to address these matters. In addition, as we craft our faa bill we will continue to focus on certification treform, the integration of drones into the Airport Infrastructure development,o aviation safety, and rural air service. There is still a lot of work to be done. And i i look forward to working with the administration and all of myy colleagues throughout th process. With that i reiterate my thanks to secretary chao for being here and turn to ranging member nelson for his Opening Statement. Thank you, mr. Chairman, and thank you to the committee in the way that it is so interested in this subject and with which we dispatched this subject matter last year in an exceptionallywa bipartisan way d anan almost unanimous way. Madam secretary, welcome. The current extension ofte the a set to expire at the end of september, im hopeful that we are going to have ami bipartisa and a long term reauthorization bill ready to go in the coming weeks. And what i had expressed my preference to you just a few minutes ago, a bill somewhere in the range of five years, to give you certainty over time that you had thexe authorization with whh you need to execute the executiveh branch of government. I remindf our committee that we passed this oneyear extension with a lot of substantive stuff in it. 953ar in the senate. And at the ntime, the chairman and i focused on areas of agreement. This i resulted in legislation that addressed the safe integration of drones in the National Airspace, significant reforms to the faa certification process, and w broad ranging aviation a consumer issues. This was a win for aviation stakeholders as well as the traveling public, which was reflected in that overwhelming vote. Now, any further progress on that bill was thwarted in the house by the proposal of privatization of air Traffic Control. So we l now operate just on a oneyear bill with a new looming deadline. Madam secretary, i understand that you will present the administrations support for the shiftingty atc services from th faa to an independent entity that will be governed in part by the airlines. My views on this matter i have already shared with you, are the sames as i expressed rather vigorously last year when this subject was up for debate. Why . Because we have the safest air Traffic Control system in the world, why would we risk that by handling the whole thing over to an colleagues on the other side of the aisle, which really is not so much applicable to this committee as it is to the full senate had not rallied behind this proposal because they understand the potential harm to general aviation as well as to small and Rural Communities. And a fundamental break up of the faa cannot advance when there is such Strong Division among aviation stake holders and in congress. So this entire discussion over atc privatization distracts from legitimate matters which must be doctorsed by the congress on the part of faa reauthorization. Now its no secret that the traveling public is frustrated and i want to grant what the chairman has said about this matter. There are certainly ways that w. We are right at the point of handing over a lot of the communication via radar to the gps satellite system. That, as i understand it, is going to occur in about three years. Whereas the remaining implementation over of the entire next generation is going to be over a dozen years. That can certainly be made more efficient and effective and indeed it will save time and fuel and money for the traveling public as well as the airlines. If you can go from point a to c instead of having to go a route because of a radio beacon from a to b to c and you can cut off that dog lag with a bline straight to your destination, then it save as lot of time, fuel and money. And thats the point of next gen plus having Situational Awareness in the cockpit so that you know at all times because you have a much improved Communications System in the cockpit what is around you. At the same time the traveling public is frustrated. Look what we are seeing. Every day theyre frustrated. They cant check their bags or board flights with increasingly shrinking sizes of and or over booked seats without paying fees. So one of the airlines is ordering a whole new set of boeing 737s. And instead of 31 inches between the seats in tourist, in fact theyre going to get it down to 29 inches because they are going to put in this new boeing 737 an additional 12 seats in the same amount of cabin space. Passengers are expressing their frustration. Theyre frustrated that airlines wont design their websites that clearly communicate their fees and policies. Theyre frustrated that failing airline i. T. Systems result in cancelled and delayed flights for days on end and i see a lot of our members with very interested expressions on their faces because its happened to us as well. So this is why this years faa reauthorization legislation must once again include strong Consumer Protections to address these growing frustrations. Afterall, if the airline cant even manage their own i. T. Systems, you can imagine if you took and put all of that into air Traffic Control, that doesnt give us a very good result. So lets deal with the real problems like the way passengers are treated as valuable customers, which the arlz obviously want to do. Lets dont go around trying to find a solution in search of a problem thats not a problem. So lets keep the focus on a bipartisan long term and id say fiveyear comprehensive faa reauthorization bill and lets try to do it and show that actually in this congress we can get something done and passed and passed in a bipartisan way. And so as usual, madam secretary, all of us look forward to working with you. Youre an excellent public servient. You have given yourself to Public Service over the years and we are appreciate that very much. Thank you. That know ynk you, senator n. A lot to chew on there. We look forward to hearing from you and if youll proceed with your opening remarks and well open it to the panel. Thank you very much. Ranking member nelson and members of the committee, thank you for inviting me to testify before this committee and the future of the federal averation administration and the faa reauthorization relegislation. Nearly a century has passed since the federal government started navigating the nations airspace. Weve come a long way. Light towers and huge concrete arrows painted yellow. In the decades since, a progression of congressional and president ial initiatives has resulted in the air Transportation System we know today and altered the Regulatory Framework along the way, sometimes quite dramatically. To keep up with it technology, new regulatory entities were created and old ones were restructured to make more effective use of our nations airspace and improve aviation safety. We can all take pride in the tremendous gains that have been achieved. Technological change has increased dramatically over the past several decades. At the same time the traditional model is making it more and more difficult to keep up. Air Traffic Control is perfect example. Despite billions of dollars of taxpayer investments, the implementation of state of the art air Traffic Control technology is not where it needs to be. So this administration has taken a bold step and joined many of our counterparts world wide by separating air Traffic Control operations from the oversight functions of the f a, a. This administrations proposal will create a separate, nongovernmental, nonprofit cooperative to operate our country pfs air Traffic Control system. The new entity would be a fully capitalized, financially self sustaining entity funded by users of its services. All surplus revenues would be reinvested back into the system. Because just because its not profit, doesnt mean that it doesants accumulate surpluses. Mie mindful that the key to any organizations success is its employees, it proposes that the new entity honor existing labor agreements and that employees transfer from the faa would be kept whole in terms of pay and benefits, although they would no longer be federal employees. This will accelerate new technology which is so critical to managing the National Airspace with more precision, thereby enhancing safety. Passengers will benefit because these reforms will speed up technology that will reduce delays and congestion. Air Traffic Controllers will benefit because these reforms will insure that they have the most up to date tools and technology. And i want to single out and thank these dedicated professionals who are indeed the best in the world. Theyre true heroes, keeping the flying public safe every day. And taxpayers will benefit because a system will be fully financed with user fees. 100 of the surplus will be able to be reinvested back into the system. We also believe the proposed new entity is necessary for the dramatic increase in passengerer traffic over the last decades and to integrate new entrance into our airspace such as commercial space and commercial space operations. My written testimony contains more detailed information on the proposal and of course legislative language to be submitted will contain many more details. It is worth noting that over the past 20 years more than 60 countries have successfully managed similar atc air Traffic Control reform efforts. Each country is different. We recognize that. And we also recognize that the u. S. National airspace is the biggest and most complex in the world. Nevertheless there are lessons to be gleamed from the experience of other countries and we need to embrace transformational reform. Innovation and the ability to chapg with changing times is one of the hallmarks of our country and part of aviation history. The proposed reforms will insure that the United States remains the worlds leader in aviation Going Forward into the it future and this is an industry that we pioneered. So thank you for the opportunity to appear before you today and ill be happy to take any questions that you may have. Thank you, madam secretary. As i mentioned in my Opening Statement there have been many concerns raised regarding recent proposal s for atc reform and te potential impact on Small Community airspace. I was glad to see the principals continue the need to maintain access for rural kmupt communities. How do you see this proposal, n insuring there are such safeguards in place for Rural America . The administrations proposal will enhance safety, improve access, and also increase efficiency. All of these features will help make the system better. As we have already heard the congestions and delays we are seeing in our airspace can be alleviated by a different governing structure. The tardiness with which we are implementing technological advances can be addressed through taking this air Traffic Control entity out of bureaucratic Government Procurement rules. We have the best and safest system in the world. We want to maintain that and to enable the system in the future to maintain its supremacy, we need to have a much needed technological advances. We need to have a different way for the air Traffic Control system to be able to space airplanes, for example and on the rural front, im very concerned boit access for Rural America. Currently the rural areas are most hurt by the status quo in terms of air Traffic Control towers, many of which are the first to be cut in any budgetary cutbacks. So Rural America, if it were, would actually the be enhanced if the air Traffic Control system were taken out of the bureaucratic budgeting and procurement processies. As you would understand look at the composition of this committee. There are a lot of people that represent rural states and people with smaller airports where general aviation is important and i, like you, share a concern that rural kbrareas b treated fairly. My question is to what safeguards in the Administration Proposal in what ways would they are go about insuring rural areas would continue to have access and that would be affordable . So if you have maybe you havent at this point, since theres no legislation to look at, sort of gained that out. But thats something a lot of people would be interested in o knowing about. There were editorials that echoed the president s call to spin out the atc function from the faa and noted the basic concept has enjoyed support by republicans and democrats at different times. What would you say, for instance, to those that argue reforming the atc system will actually slow down the modernization process . Well, we respectfully disagree. The men and women who work on next gen are doing their very, very best and we do not want to criticize them, but next gen effort has been going on for quite a while. It has expended billions of dollars and facing many procurement issues, delays that existed decades ago. I was Deputy Assistant of transportation in 1989. Coming back in 2017 i am hearing the same arguments, the same descriptions of the problem as i did then. The procurement issues are real and we need to make sure that hard working men and women who man our air Traffic Control system have the latest technology. Right now the air Traffic Control system is still operating from vacuum tubes and paper strips at an age when we have Digital Technology available. So we need to again equip our air Traffic Controlests with the best tools they have going into the future. Senator nelson. Thank you. Madam secretary. Well just have a disagreement on this and i appreciate the position you have to articulate for the white house and entirely respect you as you go about your duties. I would point out that one of the reasons for the delays on the next gen implementation is lack of money. Yeah. And lack of money also gets in the way a lot of rural airports are covered by contract towers. Theyre not faa. And we went through that drill a couple of years ago and had to really get with it because some of the contract towers were being cut out simply as savings. A lot of the rural airports that dont do have them now would like the have contract towers. But its a function of money. I dont think when you compare that to the organization of the implementation that is a reason why you suddenly turn all of the government assets over to a private entity. That is my opinion and we will certainly in the crusable of debate proceed and see where it comes. I want to give most of my time to the other members. Its pretty well known where i am. I just want to give you another topic for your consideration. Takata airbags have been linked to 180 injuries and 11 deaths. Several of those have occurred in my state. Last week we released data from an independent monitor that showed after two years of the nation wide recall, 2 3 of the cars out there still have not been repaired. And it appears since you were sworn in the national Highway Safety administration has not taken any further action