That reform model has solid free market credentials. It was the brainchild of Reason Foundation co-founder Bob Poole and was backed by free market transportation analysts at CEI, the Cato Institute, American Enterprise Institute, National Taxpayers Union, and numerous other organizations, along with every airline other than Delta, numerous former secretaries of transportation, every former air traffic control chief operating officer, FAA controllers and pilots unions, House Republican leadership, most independent academic researchers, and consumer and business groups such as the Business Roundtable and U.S. Travel Association. The plan was first sketched out by Poole in a 1982 Heritage Foundation study at the request of the Reagan White House.
Critics say they oppose spinning off the FAA’s Air Traffic Organization into an independent nonprofit, which is modeled on the highly successful Canadian reforms from two decades ago. They argue that the air traffic controllers’ union, which is supporting these badly needed reforms, is insufficiently hosed. But the purpose of this legislation isn’t to bust unions—it’s to make major institutional changes to enable adoption of new technologies and practices. As the Cato Institute’s Chris Edwards has noted, it is “perplexing” that these conservatives are in effect favoring a unionized government agency over a unionized private corporation.
The latest critic is the National Right to Work Committee, which describes itself as a “single-purpose citizens’ organization” that “combats compulsory unionism through an aggressive program designed to mobilize public opposition to compulsory unionism and, at the same time, enlist public support for Right to Work legislation.”
In its June-July 2016 newsletter, National Right to Work Committee Vice President Matt Leen makes a number of basic factual errors and threatens to oppose air traffic control reform legislation by “mobilize[ing] massive public opposition to prevent H.R.4441 from reaching President Obama’s desk if necessary.”
Below I discuss these errors and offer corrections. The text in bold is a direct quote from Leen’s newsletter article. My response follows.
A genuine privatization of ATC akin to Canada’s could reap huge savings for taxpayers and air travelers.
Unfortunately, the pseudo-privatization provisions in H.R.4441, the so-called “Aviation Innovation, Reform, and Reauthorization Act of 2016,” would take domestic ATC in the wrong direction by expanding the monopoly privileges of National Air Traffic Controllers Association (NATCA) union bosses.
H.R.4441 would spin off ATC, now part of the Federal Aviation Administration (FAA), into the “ATC Corporation,” a new not-for-profit monopoly.
Unfortunately, H.R.4441 explicitly provides that the hierarchy of the National Air Traffic Controllers Association (NATCA) union will continue for the foreseeable future “as the exclusive representative” of ATC Corporation employees on matters related to their pay, benefits and work rules.
In fact, these reforms are based on the Nav Canada model and noncontroversial international best practices, from the proposed governance structure to fee schedule to labor relations. Nav Canada is a nonprofit air navigation service provider governed by a board of stakeholders that manages Canada’s airspace. The proposed U.S. ATC Corporation would also be a nonprofit governed by a board of stakeholders that would manage the National Airspace System. Nav Canada controllers are represented by a union, and so would America’s ATC Corporation controllers during the three-year transition period, with the option of decertifying that union in the future. It is not clear what fundamental differences between Nav Canada, which the Committee claims to support, and the proposed ATC Corporation, which it opposes, seem troubling.
The so-called “privatization” would thus leave in place a pro-Big Labor 1996 law through which then-President Bill Clinton and an out-to-lunch GOP Congress dramatically expanded the scope of NATCA bosses’ monopoly-bargaining privileges.
Two years later, NATCA bosses exploited this new power to secure, at taxpayers’ expense, the most lavish pensions and benefits in the world, while perpetuating inflexible controller scheduling and inefficient work rules and red tape.
The Committee is referring to a change made under the 1996 FAA reauthorization that granted controllers additional bargaining powers relative to other federal workers in an attempt to attract and retain higher-quality employees. However, given that the ATC Corporation would be a private entity, what the Committee is complaining about here is that ATC Corporation controllers would be covered much like they are today, which is closer to the private sector unionism model. The implication here is that the Committee wants Congress or regulators to determine the pay and benefits of a private corporation, something that is neither free market nor conservative.
Incredibly, H.R.4441 would render the 1996 monopoly-bargaining scheme even more anti-taxpayer and anti-air passenger by requiring “binding arbitration” in the case of an impasse in negotiations.
That would give the final say regarding union-boss compensation demands and work rules to arbitration boards that are typically stacked with Big Labor partisans instead of a presidential appointee who is accountable to the public.
It is true controllers would have binding arbitration under the previous proposal, just as they do in Canada. However, this is functionally the same as the status quo. The main difference is that current law allows the FAA to impose a final contract if an impasse is reached. However, the last time this power was executed under the George W. Bush administration, it was reversed less than three years later by the Obama administration. The politicized nature of this “tool” is what makes it so ineffective.
Further, it is clear the Committee failed to read the bill, because arbitration board selection is hardly dominated by union interests. Under the AIRR Act proposal, the union and management would each select one arbitrator, and those two would then select a third arbitrator from a pre-drawn list of candidates recommended by both management and the union. Not only that, but the AIRR Act would keep in place a current prohibition on strikes, a prohibition not found elsewhere in the private sector.
Another union special privilege that H.R.4441 would entrench is wasteful “official time.” This is contract language authorizing current FAA and future ATC Corporation employees who are also union officers to do union business on the dime of taxpayers and air travelers.
According to Diana Furchtgott-Roth, former chief economist at the U.S. Labor Department and now a senior fellow at the Manhattan Institute, in 2012, the latest year for which data are available, “19 air traffic controllers, 18 of whom earned six-figure salaries, were on full-time official time” — union work.
“Simply removing the ‘official time’ provisions in the NATCA boss-negotiated contract would save taxpayers and air travellers (sic) over $3 million annually, but H.R.4441 would make that impossible for years to come,” noted Matthew Leen, vice president of the National Right to Work Committee.
Official time is indeed wasteful and ought to be eliminated (like many government functions), but let’s put this figure in context. $3 million sounds like a lot of money, but it is dwarfed by the nearly $7.5 billion spent by the FAA’s Air Traffic Organization every year. That $7.5 billion would be taken off the backs of taxpayers under the reform plan. The Committee here is devoting its resources to stop badly needed free-market reforms because it thinks the ATC Corporation needs to shave less than five one-hundredths of 1 percent off of its budget—and if it doesn’t get its way, it would prefer taxpayers pay billions of dollars that they otherwise would not and keep air traffic control within the government. What a terrible trade-off.
In contrast, air traffic control corporatization can result in dramatic savings for customers. Since Canada undertook a similar reorganization 20 years ago, the inflation-adjusted user fees paid by aircraft operators are more than 30 percent lower than the user taxes they replaced.
Strangely, the Committee’s myopic position on air traffic control reform sounds very close to the positions of government employee unions American Federation of Government Employees and the American Federation of State, County and Municipal Employees.
“Yet another illustration of this legislation’s extreme pro-Big Labor monopoly bias,” Mr. Leen continued, “is that it would give NATCA union officials seats on the ATC Corporation’s board of directors, effectively positioning union bosses on both sides of the bargaining table.”
H.R.4441, sponsored by union boss -appeasing Congressman Bill Shuster (R-Pa.), has already been rubber-stamped by a U.S. House committee, and could come up for a floor vote soon after this Newsletter goes to press.
Contrary to Leen’s claims, the proposed governance structure actually expressly forbids NATCA union officials from holding positions on the ATC Corporation board (See Section 90306(e)(2)(D)(i)). The actual proposal calls for a 13-seat board. The controllers union is granted just one seat. Airlines are granted four. General aviation is granted three. The Secretary of Transportation is granted two. And the largest airline pilots’ union, aerospace manufacturers, and the CEO of the ATC Corporation each have one seat. This is very similar to the composition of Nav Canada’s board of directors and it has worked out extremely well.
Unfortunately for the cause of reform, the AIRR Act will not pass this session. But air traffic control reform will be revisited in 2017. The government status quo is not viable. Just the other day, another Department of Transportation inspector general report underscored the need for immediate reform, finding that “[u]ntil FAA has a clear vision for the future configuration of NextGen, the Agency will continue to face challenges in identifying and coordinating its R&D needs with other Federal agencies.”
The need for reform is rather urgent. We urge the National Right to Work Committee to reconsider its opposition to this worthy reform plan.