Chairman Mica, Congressman DeFazio, Members of the Subcommittee, thank you for the opportunity to appear before you today to discuss the Administration’s proposal to reauthorize our aviation programs.  Before I begin my substantive statement, I would like to acknowledge the new Ranking Democrat of the Subcommittee, Congressman Peter DeFazio.  Although new to the position of Ranking Democrat, Congressman DeFazio has been an active Member of this Subcommittee for many years and has been an aggressive advocate of aviation safety.  I would also like to say that, although this is my first appearance before the Subcommittee in my capacity as Administrator of the Federal Aviation Administration (FAA), I have worked with you when I was Chairman of the National Transportation Safety Board (NTSB).  I look forward to building on the relationships that we established when I was Chairman and to working closely with you as Administrator on reauthorization and other important safety, efficiency and capacity issues.

On March 25, 2003, Secretary Mineta transmitted to Congress the Administration’s reauthorization proposal.  I can’t help but feel the presence of the Secretary as I speak today, but I assume that has something to do with his portrait hanging just over my shoulder.  I would very much like to thank both Secretary Mineta and Deputy Secretary Michael Jackson for their tireless efforts in the development and clearance of this proposal and for their overall commitment to safety.  I am especially grateful for their dedication and input, and that of Under Secretary Jeff Shane and his Policy office since, when my tenure as Administrator began, the consideration of a reauthorization proposal was already under way.  I think you will find that the Administration’s proposal will serve as an excellent basis for the development of reauthorization legislation.  It goes without saying that I stand ready to work with you and industry stakeholders as Congress develops its own proposal.

When the Wendell H. Ford Aviation Investment and Reform Act for the 21st Century (AIR-21) was passed almost three years ago, it contained some truly innovative provisions that improved safety, airport development and system efficiency.  It was landmark legislation that has provided a firm foundation upon which to build.  The Administration’s reauthorization proposal does just that; it takes its direction from AIR-21 and proposes a four-year authorization that would continue investment in safety, air traffic control modernization and operations, airport capacity improvements, and environmental stewardship. 

Let me take a moment to describe for you the substance of our proposal.

Continued investment in the aviation system is critical.  Although the devastating events of September 11th continue to impact the number of people flying in this country, recovery of the system is inevitable.  The temporary downturn in air travel affords us a great opportunity to continue to focus on increasing airport capacity without unacceptable disruption to the system.  Under AIR-21, the annual authorized levels for the Airport Improvement Program (AIP) increased substantially, and FAA’s other accounts also received appreciable increases.  The funding levels the Administration recommends for AIP, Facilities and Equipment (F&E), and FAA Operations will support the achievement of several goals.  They maintain the level of investment for major airport capacity projects that provide great benefits to the National Airspace System (NAS).  They enable us to continue to update the NAS infrastructure, expand air traffic control automation and communications tools, and implement needed operational capability and risk-mitigating precision landing navigation.  They support implementation of FAA’s Operational Evolution Plan (OEP) and efforts to accelerate airspace redesign, sector reconfiguration, and chokepoint solutions. 

Although the proposed funding level for Research, Engineering and Development represents a decrease from current levels as a result of the transfer of security technology responsibilities to the Transportation Security Administration (TSA), it reflects our continued focus on safety in FAA’s research program.  FAA also benefits from a significant amount of forward-looking research funded by the National Aeronautics and Space Administration (NASA) that is aimed at improving the long-term safety, security, and efficiency of the national airspace.

I believe these funding recommendations are sound and represent a strong signal that investment in safety and in the NAS is critical to a healthy economy and the future of the country.

With respect to the AIP, the Administration proposes a restructuring of the formulas and set asides to allow more funds to be targeted to those airports with the greatest dependence on Federal assistance.  In fiscal year 2004, our proposal would transfer $87 million more than in fiscal year 2003 to small airports – those facilities essential to the vitality of the NAS that have limited funding options other than Federal assistance.  We also recommend simplifying the grant formulas by eliminating unnecessary or outdated set asides.  For example, the set aside for the Military Airport Program was created to ensure funding when it was a new concept and it was unclear if it would compete well for grant dollars.  Today, the program is well established and its airports routinely receive more than the amount guaranteed by the existing formulas.  The changes we propose will have the effect of increasing the amount of discretionary funding available, which we believe is essential to help fund the key capacity projects we all agree are necessary to prevent future gridlock.

While FAA’s primary mission is to ensure a safe and efficient NAS, we also take our environmental responsibilities quite seriously.  The environmental initiatives in this proposal will contribute to continued success of our investment in safety and capacity projects by reducing undue delays in the environmental review of projects while continuing to exercise strong environmental stewardship.  This proposal is not only consistent with the President’s Executive Order on Environmental Stewardship and Transportation Infrastructure Project Reviews, but also previous streamlining proposals developed by this Committee and industry.  

We also propose new initiatives to mitigate the impacts of aviation emissions and noise.  For example, we propose to establish voluntary programs to reduce aviation emissions by converting airport infrastructure, airport vehicles, and airport-owned ground-support equipment to new low emission technologies.  In addition, our noise initiatives include using some of the AIP noise set-aside for research aimed at reducing community exposure to aircraft noise or emissions. We also hope to increase prospective homebuyers’ awareness of areas near airports that are exposed to aircraft noise by requiring Federal lenders to inform prospective homebuyers of properties within airport noise contours. 

The aviation insurance program authority in chapter 443 of title 49 is scheduled to expire at the end of 2003.  In the past, reauthorizations of the program were enacted periodically and if the program lapsed between authorizations, the lapses were brief and without incident.  In the current climate, however, a lapse in the defense and foreign commerce related program could have extreme consequences.  To avoid that future possibility, our bill would repeal the periodic renewal requirement of that portion of the program, thereby making it permanent.  The provisions that enable DOT to offer insurance to airlines flying within the United States would be extended for a two-year period, and would be subject to the reauthorization process at that time.  Of course, the actual provision of insurance will remain at the discretion of the President, based on a Presidential Determination Order.

Title V of our proposal will be familiar to you.  In response to this Committee’s concerns, my predecessor testified before you suggesting certain structural reforms that could assist in agency efforts to transform air traffic control and its supporting functions into an effective, performance-based Air Traffic Organization (ATO).  I agree that these reforms would be helpful and urge you to include them in your reauthorization bill.  To remind you, there are five structural changes proposed:  modify the Management Advisory Council (MAC) by creating a stand-alone Air Traffic Organization Board (Board) that is separate from the Council, and add the Administrator as Chairperson of the Board to provide leadership;  modify the Board’s existing approval authority and involvement in ATO’s budget to reflect the Executive Branch’s authority in these areas;  enable the Secretary to nominate members of the MAC by eliminating the requirement that original MAC positions be filled by Presidential nomination;  modify the statutory responsibilities of the Chief Operating Officer (COO) to make them consistent with standard COO responsibilities rather than CEO responsibilities;  and finally, consistent with the practice applied to other DOT modal agencies, make the FAA Deputy Administrator a Secretarial appointment.  This would eliminate the need for Senate confirmation.

The proposal also contains provisions that affect programs that are the responsibility of the Office of the Secretary (OST).  In the bill, the Department is proposing, consistent with the President’s FY 2004 budget, major restructuring of the Essential Air Service (EAS) program in order to administer the program more efficiently and to add flexibility.  With the proposed reforms, the Department would direct program resources to the small communities that need it most to maintain access to the national air transportation system.  Under this proposal, for the first time, communities would be stakeholders in their transportation service.  Although there is a modest contribution requirement, which we believe will invest and incentivize local communities, it also provides communities with greater flexibility to use the money to tailor a program that works best for each situation.

The funding levels of our proposal will enable us to continue our critical safety oversight of the industry.  Our challenge is to maximize our inspector workforce to make the most of our resources to ensure that unacceptable compromises are not being made by the airlines.  We redirect our surveillance resources to areas of concern that have been identified through an analysis of our inspectors’ observations, industry data bases and consideration of the airline’s overall financial and management condition.  This is a proactive approach to make sure that airlines have safety built into their operating systems and also ensure compliance with safety regulations that will improve upon our excellent safety record.  I believe this approach will serve us well through the challenges, known and unknown, that lie ahead.

As part of being pro-active in our safety oversight, I feel very strongly that meaningful safety improvement will only be attained if we focus our efforts on making FAA a data driven, performance based organization.  Our safe system can become even safer if FAA can get in front of accidents by using data to detect problems and disturbing trends.  In our system safety approach we are identifying hazards, assessing and analyzing risks, prioritizing actions, and measuring and documenting results.  This is a continuous, data driven approach that places an emphasis on information gathering and sharing.  We need as much data as possible to make informed decisions, which is why FAA is committed to programs like the Flight Operational Quality Assurance (FOQA) and Aviation Safety Action Program (ASAP).  AIR-21 contained a provision on FOQA that has greatly assisted us in our data collection efforts.  Data analysis plays an important part in our Safer Skies initiative, which is all about taking actions that will achieve the greatest benefits in preventing accidents.  When we started this initiative several years ago, the goal was to reduce the accident rate by 80% by 2007 and we are on track to do that. 

In addition to the critical safety role we play here in the United States, I want to increase FAA’s international profile.  Aviation safety should be one of our most important exports.  FAA is broadening our network of partnerships with civil aviation authorities, as well as promoting our relationships with regional safety organizations.  We are in a position to be very helpful in providing technical assistance to those countries that want to improve aviation safety oversight or air traffic control services.  We must also guard our position as a world leader in aviation safety, air traffic, and environmental issues.  The world is getting ever smaller and if FAA can help improve safe air travel for U.S. citizens and citizens of the world no matter where they travel, we should embrace that role. 

Toward that end, I recently created a separate International Office and hired Douglas Lavin to head it up and work on my goal of increasing our international profile.  Doug comes to the FAA with extensive private and public sector experience.  Most recently, Doug was Vice President of Portfolio Management Group for American Express where he managed the company’s strategic venture capital portfolio.  I am confident he will provide the leadership I am looking for in this important area.

The Offices of Policy and Environment & Energy are under the able direction of Sharon Pinkerton, and I only hope that Chairman Mica will forgive me for depriving him of her services after ten years.  In her new role as Assistant Administrator, she will be helping to coordinate the agency’s efforts on reauthorization, so will not be a stranger to this Committee.

Finally, because for the past 18 months Congress, and particularly this Subcommittee, has appropriately focused on security matters, I would like to note that the shift of FAA’s former security programs to the Transportation Security Administration (TSA) was a smooth one.  FAA continues to wor k closely with TSA even as TSA transitioed from the Department of Transportation to the  Department of Homeland Security.  Although FAA’s role with respect to security has changed, we remain defenders of the Homeland in a very real sense.  Security remains a vital component of safety.  The current threat level means we all have a role to play in protecting our country.  On behalf of the FAA, I am committed to continuing to work closely with TSA to protect our country from having aviation used against us as a weapon of mass destruction.

In conclusion, this year marks the centennial of the Wright Brothers’ historic flight at Kitty Hawk.  The flight was marked in feet, not miles or time zones, yet it is hard to measure the impact of that moment on the way the world has evolved since that momentous day.  When you look back on those early days of aviation and how dangerous air travel was compared with other modes of transportation and compare them with today when aviation is the safest way to travel, it is easy to pat ourselves on the back and feel content with how far we’ve come.  While we can and should marvel at all that we and our forbears have accomplished in the past 100 years, complacency has no place in aviation.  We must continue to set and work to achieve goals with respect to safety, capacity and efficiency.  I want to know that I was part of the unimaginable advancements in aviation that will take place in the next 100 years and I want you to know that I stand ready to work with you to take those first steps in the second century of flight to make our world a better place.