As prepared for delivery.

Good afternoon, Chairman Diaz-Balart, Ranking Member Price, and members of the subcommittee. Thank you for the opportunity to discuss the Fiscal Year (FY) 2017 budget request for the Federal Aviation Administration.

The FAA’s 2017 budget request is for $15.9 billion to support the FAA’s mission to run the safest, most efficient aerospace system in the world while continuing to transform our airspace through NextGen. These budget priorities are important to us, and they also play a larger role in the long-term health of our nation’s economy.

We continue to make strides deploying key elements of our NextGen air traffic system while also welcoming new users into the nation’s airspace. NextGen is no longer some nebulous and futuristic aspiration; it’s happening today.

When I spoke to you last year, I told you we were almost finished with the installation of our En Route Automation Modernization System, or ERAM. It is now complete and is delivering the promised results as the backbone of our NextGen technology transformation. Similarly, the ground infrastructure for ADS-B is finished, and ADS-B traffic and weather broadcasts are now available across the country.

As we complete this foundation, our engagement with industry is yielding real benefits. Last week, the NextGen Advisory Committee and the FAA met in Atlanta to discuss our accomplishments and to outline our next steps. We have made significant progress in four NextGen priorities areas, including Performance-Based Navigation and DataComm. We are replacing old flight paths with more efficient satellite-based procedures, and DataComm technology is giving pilots and controllers a new, more efficient way to communicate critical safety information.

For the Operations budget, the FAA is requesting $10 billion in 2017 for day-to-day operations of our nation’s aviation system. This represents a 1 percent increase above the FY 2016 enacted level and includes the costs of providing safe, secure, and cost-effective air traffic services to commercial and private aviation.

This budget will strengthen our safety and security programs, hiring 16 new safety critical staff for the integration of Unmanned Aircraft Systems (UAS). We’ll also hire 13 new personnel in the Office of Commercial Space Transportation to support regulatory, safety, and airspace integration efforts. And we’ve boosted funding to improve the security of our most critical NAS facilities and protect the FAA from malicious insider activity.

For Facilities and Equipment – or F&E – the 2017 request of $2.8 billion maintains the capacity and safety of our nation’s airspace while we continue to modernize and transform it. The non-NextGen portion of our investment – representing almost $2 billion – will be to sustain current systems. This funding will be a down payment on our maintenance backlog, keeping systems operational and our employees safe. Further reducing the backlog will require continued commitment for several years.

Our Research, Engineering, and Development request of $167.5 million allows us to boost funding for the Continuous Low Energy, Emission and Noise (CLEEN) program to support the President’s plan to reduce carbon dioxide emissions by 32 percent from 2005 levels by 2030. It also includes $8.4 million to meet the growing demand for unmanned aircraft systems.

Our Airports budget request is for $2.9 billion. This reflects our ongoing priority of focusing federal resources on projects of highest priority and greatest benefit to aviation at smaller commercial and general aviation airports.

At the same time, the budget would allow commercial service airports to increase non-Federal Passenger Facility Charges (PFC) from the current maximum of $4.50 to $8. The PFC level has not been increased in more than 15 years. Our analysis shows that, due to inflation, this higher PFC level is needed just to provide an equivalent level of buying power. This means that large hub airports will benefit from more direct and local control over their funding and improvements.

Before we turn to questions, I’d like to take a moment to address the upcoming debate over FAA reauthorization. Last month, the House Transportation & Infrastructure Committee unveiled a proposal for how air traffic control services could be provided in the future. We are open to having this discussion. We encourage Congress to work in a bipartisan way on FAA reauthorization, consistent with recent approaches on other transportation issues.

Civil aviation contributes $1.5 trillion annually to the national economy and constitutes 5.4 percent of the gross domestic product. Aviation also generates 12 million jobs. We share an enormous responsibility to protect this mode of travel and to shape and nurture its bright future.

Thank you. That concludes my opening remarks. I would be happy to answer your questions.