Did FAA Play Politics in Applying Sequester Law?

Last week’s successful push to cancel air traffic controller furloughs has drawn cheers from the flying public, lawmakers, airlines and unions. But with the stage now set for disputes about whether other programs deserve to be spared the blunt blade of sequestration, the Federal Aviation Administration’s handling of its cutbacks and resulting flight delays bears examination.

Government Executive interviews with budget specialists of varying political leanings show a rough consensus that the Transportation Department agency had a small degree of flexibility, but that the Obama White House was calling many of the shots.

On Friday afternoon, just after the House passed a bill eliminating air traffic controller furloughs, the FAA released a brief statement saying, “Air traffic facilities will begin to return to regular staffing levels over the next 24 hours and the system will resume normal operations by Sunday evening.” Once signed into law, the bill will allow the Transportation secretary to avoid furloughs by transferring funds from the FAA’s long-term grants account called the Airports Improvement Program.

Immediately, Rep. Bill Shuster, R-Pa., chairman of the House Transportation and Infrastructure Committee, released a statement saying, “Although the FAA already had the necessary flexibility to implement the sequester in a responsible manner, this legislation ensures beyond a shadow of a doubt that the agency now has more than enough capacity to end air traffic controller furloughs, stop the pain for the traveling public, and protect the economy.”

During a hearing earlier in the week, Shuster’s counterpart on House Appropriations, Rep. Hal Rogers, R-Ky., had scolded FAA chief Michael Huerta, accusing him of ambushing the appropriations committee by not notifying it that furloughs would begin April 21. Huerta replied that as far back as February, he had told lawmakers that to cut FAA’s budget by $635 million this year, “we have little choice but to make up the rest through furloughing employees.”

Rep. Tom Latham, R-Iowa, author of the bill to stop the furloughs and chairman of the Transportation Appropriations subcommittee, also bashed the FAA. “I think we all agree the FAA and the administration have handled the sequester poorly,” Latham said. “The FAA has negotiated in bad faith with the FAA employees, the airlines, the flying public and the Congress. And the administration has played shameful politics with sequestration at the cost to hardworking American families.”

The FAA’s degree of flexibility depends on one’s interpretation of language in the 2011 Budget Control Act, which amended a 1986 law. In a scathing editorial published Wednesday, The Wall Street Journal argued that “The White House claims the sequester applies to the budget category known as ‘projects, programs and activities’ and thus it lacks flexibility. Not so: this is a political pose to make the sequester more disruptive. The White House could keep the controllers on duty simply by allocating more furlough days to those other non-essential workers.”

On the contrary, said Richard Kogan, an Office of Management and Budget veteran now a senior fellow at the liberal-leaning Center for Budget and Policy Priorities, the 2011 law “requires that each (non-defense discretionary) budget account be cut by precisely the same percentage. In contrast, the FAA bill in question permits the administration to take money from the construction account and move it into the ‘operations’ account, thus solving the immediate FAA controllers problem at the expense of other, longer-term needs.”

That transfer could not have been accomplished without the bill, he added. Patrick Lester, director of federal fiscal policy at the Center for Effective Government, agreed that the 2011 law did not grant transfer authority. It also “didn’t require furloughs, which is why there is so much variation from one agency to the next,” he said. “The real questions are whether the FAA already had limited transfer authority, which is true for some agencies; how the FAA budget accounts are structured; and what else, besides personnel costs, were in those accounts. If there are a lot of other expenses in the same accounts, then the FAA could redirect the cuts to those other cost centers.”

Steve Bell, a veteran Senate Republican Budget Committee aide now with the Bipartisan Policy Center, cautioned that the true authority lies with OMB rather than FAA. “To say OMB is apolitical is a mistake, and I can’t imagine OMB making any call without the White House,” he said. “FAA would not have done what it did, and was not compelled to do so by the law only.”

Even so, the issue of FAA’s flexibility comes down more to timing than substance, in Bell’s view. “The FAA didn’t have just one thing to do; they chose to negotiate with unions to make the furlough cuts across the board throughout all American airports,” he said. Many forget, he added, that the administration early on had warned that furloughs under sequestration must be carried out with consultation with unions and their collective bargaining agreements. “So in the end, the FAA would have had to resort to what it did, just not as early,” he said.

Scott Lilly, a former House Appropriations Committee staff director now senior fellow at the liberal-leaning Center for American Progress, said the FAA had already “stretched the limit of flexibility more than the law allowed.” The law’s definition of projects, programs and activities is “very squishy,” he said. Congressional staff wrote in “very specific definitions with respect to facilities and equipment,” however, he added, requiring the agency to spend exactly what it presented in its fiscal 2013 budget justification, which may have 100 pages of detail. The justification includes a $7.5 billion line item for air traffic operations that leaves limited flexibility to cut controller salaries, he said.

Where the FAA does have discretion, he said, is whether it should follow through with its earlier plan, permitted under the 2011 law as a separate account, to cut 149 contract control towers in smaller towns. “From a policy standpoint that’s the right thing to do,” Lilly said, “because you protect the traveling public by going after little airports that have [less] traffic.”

There are differences in opinion about the language that was passed, but based on discussions with House staffers, “I suspect Congress really gave the agency a great deal of latitude to do what they want,” he said. “Then the question is how much discretion they have in cancelling contracts, including those other than those for the contract towers. Based on what I’ve heard, the agency can go either way.”

Indeed, Professional Air Traffic Controllers Organization President Ron Taylor alerted his members that the bill -- which passed the Senate late Thursday and now awaits President Obama’s signature -- does not guarantee the restoration of the contract towers, and so his union will continue its push to head off the cuts.

Meanwhile, on Monday White House Press Secretary Jay Carney sparred with reporters over the FAA's degree of flexibility and the larger showdown over the future of sequestration. "Congress had to pass a law because it was not possible legally to simply reprogram funds," he said. He added that this "is why we have the problem, in addition to the fact that Congress seems to be unwilling -- or Republicans in Congress seem to be unwilling -- to ask millionaires and billionaires to give up some special tax breaks in order to avert the kinds of negative effects that the sequester is having now on regular folks out there."