Trump wants to privatize air traffic control. Is this a good idea?

In My Humble Opinion
21

As Wolfpup said, it’s the details that matter.

Sure, it might be that Trump’s proposal will favour airlines. Or it might not. It depends on the framework of the non-profit corp. In Canada, the directors can’t be union members, airline employees, or government folk. That’s meant to give NAV Can independence from all of those groups.

Sure, Trump may hand over the ATC assets free of charge. Or, he might not. In Canada, NAV Can had to pay the federal gouvernement over $1 billion (Canadian) for the assets. That was in 1996 dollars, and for a much smaller suite of assets. Will the US federal government charge the body an equivalent amount for the FAA assets? Will have to wait for the details of the proposal to come out.

As for the cost-cutting argument, that assumes that the FAA has always been fully funded without any cut-backs for political reasons, and that giving the new agency autonomy would be worse.

In other words, it assumes that the federal budget process already works well and ensures all federal agencies are fully funded as they need. Everyone who thinks that’s a fair description of the federal budget process, please put up your hand!

For example, was the FAA immune from the budget sequestration process from a few years ago? Or did it get an across-the-board cut to its budget, just like every other federal agency, regardless of the effect that might have on safety in the air?

In short, being part of executive branch doesn’t immunise you from arbitrary cost-cutting. The argument is that giving the new body fiscal powers and autonomy will lead to greater stability and more professional allocation of funds, not driven by political “flavour-of-the-month” financial policies.

Of course, whether that will happen depends on the exact structure of the new corporation and the overall regulatory framework. You need to know the details before an assessment can be made.

Finally, in response to the general scepticism that a non-profit can’t do the job as well as a federal executive branch agency, look at Richard Pearse’s comment: other countries have successfully privatised ATC, not just Canada. Is it American exceptionalism that only an executive branch agency can handle ATC in American skies, contrary to the experience of other countries?

22

How does Vladimir Putin dole out industry to his friends? This is the pattern I would be looking for.

23

He was probably temporarily held up in his private fucking jet at one time, and has been stewing about it ever since. Maybe ATC didn’t show him enough deference.

24

I think this is a proposal that’s been making the rounds for years. Trump decided to associate himself with it because it looks like shrinking the government. In the eyes of some, he gains points; in the eyes of others, it’s the policy that gets discredited because he’s behind it. :slight_smile:

25

Once the air traffic controllers are no longer on the federal payroll, the government will not need to fund their pensions and pay their wages. Therefore, those funds will be available for more tax cuts for people like Trump and his buddies.

26

And they will all be fired to save their wages, I presume.

27

If the ATC privatization can be done right it will be a major improvement. If it is done badly it’ll be a major mess.

Privatized ATC (not the whole FAA) is the way most of the civilized world is going. Meanwhile the rest of the safety oversight function remains wholly governmental. In fact the safety side of FAA would continue to exercise safety oversight over the ATC enterprise just as it does today.

The critical driving issue is funding. As a government department the budget is whatever Congress feels like spending this year. Which usually has nothing to do with the demand for services. As well, all the yearly budget shenanigans mean that lots of projects get hamstrung in sequestration or continuing resolutions or …

A privatized ATC would be a bit like the USPS. Except (if done right), Congress isn’t saddling it with silly pension demands nor micromanaging the revenue (postage rates), but not the costs.

Instead of being entirely funded by general taxation, the agency would get some minor baseline funding that way but sets user fees for the rest. Which ensures that funds to provide services tracks fairly well with demand for those services.

28

The tradeoff of course is that you’re now adding corporate profit to the equation.

29

I’m not really opposed to this idea in principle. Quasi-governmental agencies funded by user fees tend to run relatively well, since mission bloat is blunted by not have legislation allowing for additional revenue sources.

I’m opposed to Trump being the one to implement this idea, because he fucks up absolutely everything he touches.

Trump’s proposal includes a board with two commercial airline members, two union members, two regional airline members, one or two airport service members, and four at-large members chosen from the public by the rest of the board. I think there might be one more interest represented; I forget. But in any event, I think we can be fairly confident “NAV Am” is going to be a mess.

If the only problem is maintaining a static budget, why not simply make ATC a separate agency funded by user fees, rather than spinning it off entirely?

30

If they follow the Canadian or German example it may work out well. I have no confidence that Trump will follow anyone’s existing model.

31

That was supposed to say “not going to be independent.” But I guess what I actually posted works too.

32

Except it’s to be a non-profit government corp, not a private for-profit corp.
As to Trump. …

US ATC privatization has been in the works for 20 years. It’s been studied unto death. Different bills in Congress to implement it have been introduced, trapped in committee or partly passed, then died many times. Generally the airlines have been pushing this for most of the time and the bizjet crowd = corporate fatcats have been fighting it. The airlines want a responsive system with an incentive to grow capacity; the fatcats like free services provided by general taxation of the peons.

Like with so much else Trumpish, he’s merely identified something that was probably going to happen anyway due to longstanding massive efforts of other people he’s never head of, then loudly announced to the world that it was all his idea and it’s going to happen real soon because of his Power. None of those things have been, are, or ever will be, true.

But it makes a hell of a tweet.

33

Hell, I can’t imagine Trump would need any more reason than this for dumping this proposal. After all, we all know how badly Canada screwed up their health care system! :rolleyes:

OTOH, maybe a privatized FAA would require coal-fired jets…

34

That does sound problematic, if you want an independent agency

Can an executive branch agency independently raise funds on the bond market, without permission or oversight from the executive or Congress? My understanding is that’s part of NAV Can’s powers: as a non-profit corporation, it can raise funds by debt offerings, to be paid off by user fee revenues in the long-run. That’s how it pays for major capital upgrades to facilities.

Without having that corporate capacity, I doubt that a Canadian executive branch agency would have the legal capacity to go on the bond market, without getting permission from the government.

35

The USPS is apparently authorized to issue its own bonds, so I don’t see why Congress couldn’t authorize another agency to do so.

36

Independent fiscal and civil personality and standing (so they issue their own bonds, and you sue ATCAmerica, not the DoT, if you have a beef with them) is something that would have to be legislated into the creation and chartering of the corporation, if still government-owned.

As mentioned, the Devil is in the Details. Privatization per se can be done well or done badly, as can government management.

As an alternative, the government-owned “independent corporation” public sector model has a mixed track record in the USA to a great extent due to Congress/Administrations seeming organically unable to digest how can that “independent” part be as long at we technically “own” the thing (e.g. commanding the USPS to fund its pensions into the far future but retaining authority to disapprove postage increases).

Which is not to say a “private non-profit” ATC entity would be immune from having the Congress/Administration try to keep their fingers in anyway, just one step removed, through the remaining regulatory power of FAA and through the appointment of the board members (can you just imagine a POTUS simply demanding all the sitting ones quit, but then not bothering to send his replacements… or a Congress refusing to confirm because we’re close to an election).