Chao’s Background Could Give Her Outsized Role in FAA Reauthorization

By Stephanie Beasley

Dec. 1 — Elaine Chao, President-elect Donald Trump’s pick for transportation secretary, is expected to easily win Senate confirmation. But once she crosses that hurdle, she could find herself in the crossfire of debate over whether the FAA should retain its authority over the nation’s air traffic control system.

Air traffic control (ATC) privatization is a central issue in Federal Aviation Administration reauthorization talks. Spending authority for the FAA expires Sept. 30, 2017, making reauthorization one of the first priorities for the next Congress and one of the first policy challenges the Department of Transportation could face under Chao’s leadership.

Chao has not taken a position on ATC privatization, but lawmakers say her extensive experience in aviation could give her more influence on the issue. Chao helped shepherd through an FAA reauthorization in 1990 while deputy transportation secretary under President George H.W. Bush. She was also a member of the Northwest Airlines board of directors prior to the company’s acquisition by Delta Air Lines.

State of Play

Proponents of privatizing ATC point to the FAA’s sluggish pace implementing its NextGen transition from a radio- to satellite-based navigation system, which has been a focal point for lawmakers in both chambers.

Sen. John Thune (R-S.D.) is pressing the FAA to provide an update on its efforts to modernize the nation’s ATC system following a series of federal audits that show the agency is not implementing new technologies in a timely or efficient manner.

Thune, chairman of the Senate Commerce Committee, said in a Dec. 1 letter that the FAA must improve its record of working with stakeholders and the pace at which it is adopting technologies and policies for its NextGen transition.

The letter comes on the heels of a recent report from the Department of Transportation inspector general’s office that found the FAA continues to face challenges implementing NextGen, despite investing $3 billion in programs to help with the process.

In the wake of that report and other federal audits, Thune said the FAA should provide lawmakers with progress reports for each of its four core NextGen programs; summaries of actions taken in response to recommendations from the Government Accountability Office and other watchdog agencies; and an estimate for the total cost of implementing the En Route Automation Modernization computer system.

Thune requested the FAA address 12 areas of concern in total by Dec. 15.

Shuster Could Find Ally With Chao

House Transportation and Infrastructure Committee Chairman Bill Shuster (R-Pa.) has used findings from those same audits to fuel his argument that the FAA should not retain oversight of the ATC system.

Shuster introduced a proposal earlier this year to remove air traffic control from the FAA and hand oversight over to a nonprofit corporation run by national airspace users, including airlines and air traffic controllers. The House Transportation and Infrastructure Committee approved the proposal but it but never made it to the House floor.

Shuster said he plans to reintroduce the proposal in the next Congress. And allying himself with Chao, given her experience in aviation policy, could be critical to advancing an ATC privatization plan.

Shuster said shortly after Chao’s nomination was announced that he had been hopeful that Trump would select someone with the public and private experience needed to oversee a “bold agenda to transform America’s transportation and infrastructure systems for the 21st Century.”

A committee aide told Bloomberg BNA that Shuster called Chao on Nov. 30 to personally congratulate her for getting the nod. Policy issues were not discussed, the aide said.

Industry Sees Chao as Fresh Opportunity

Chao also worked alongside Airlines for America (A4A) President and CEO Nicholas Calio during both Bush administrations. The group has been one of the biggest supporters of Shuster’s ATC spinoff plan.

Calio said he is looking forward to working with Chao to modernize the nation’s “antiquated” ATC system.

“She’s uniquely qualified because she understands the complexity of the issues and the complexity of the political process and how to maneuver through that to get positive results,” Calio said in a statement to Bloomberg BNA.

The National Air Transportation Association (NATA), which has opposed the ATC privatization plan, said it is hopeful that Chao will listen to all players before taking a position on a potential overhaul of the system.

“We have someone who is deeply, deeply experienced in the workings of the department and its role,” William Deere, NATA’s vice president of government affairs, said. “And she is someone who is deeply experienced working with Congress, and I think someone who is going to have a good feel for what can be done and what can’t be done going forward.”

Runway to Nowhere?

Deere said NATA senior officials met with FAA Administrator Michael Huerta recently and that he told the group that questions about how to move forward with implementation of new technology would only be resolved once funding issues were addressed. Though Huerta has not taken an official position on an ATC overhaul, he has urged lawmakers to think carefully about how removing ATC from the FAA would affect the national airspace.

Advocates for creating a nonprofit, user fee-based ATC organization say the plan would not only pluck ATC out of the FAA’s bureaucracy, but also keep the system from being impacted by government shutdowns and federal budget cuts.

Deere said that even with a Washington veteran like Chao in discussions, he worries that difficulties developing a workable ATC overhaul plan and continued disagreements between lawmakers could sideline FAA reauthorization talks next year.

Roads, bridges and highways appear to be the main focus of a $1 trillion infrastructure plan being developed by Trump. It’s very likely that if FAA reauthorization talks get too complicated, Congress will punt on the issue and pass a stop-gap measure instead of a multiyear bill, Deere said.

To contact the reporter on this story: Stephanie Beasley in Washington at sbeasley@bna.com

To contact the editor responsible for this story: Paul Hendrie at phendrie@bna.com

Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.