Is the FAA Talking Themselves into Inconveniencing Travelers as Part of the Budget Showdown?

Lots of stories out about how the impending budget sequester will lead to delays in travel mostly as a result of furloughs to air traffic controllers.

Here are the cuts that the FAA says it will make if the sequester goes into effect.

In a letter to trade groups, Transportation Secretary Ray LaHood and FAA administrator Michael Huerta outlined these steps that DOT will take to save $600 million from March 1, the date the sequestration would take effect, to Sept. 30, the end of the fiscal year:

– “Furlough the vast majority of the FAA’s nearly 47,000 employees” by about one day per pay period.

– “Eliminate midnight shifts in over 60 towers across the country.”

– “Close over 100 air traffic control towers at airports with fewer than 150,000 flight operations or 10,000 commercial operations per year.” That would be 427 flights or 27 commercial flights a day.

– “Reduce preventive maintenance and equipment provisions and support for all NAS equipment.” (NAS = National Airspace System.)

Back in September I wrote that we didn’t need to worry about the sequester as travelers, that there wouldn’t be major air traffic disruptions. Instead, the FAA would defer capital investments in NextGen air traffic control.

It’s the logical thing to do, and I figured they would make the best decisions for their mission.

The alternative is to make good on the threat to furlough air traffic controllers, to make the point that the sequester is “Really. Really. Bad” and that it “affects real people.” They’re making cuts part of the parade of horribles, which doesn’t mean it’s the actual decision that must be made, to do layoffs rather than defer capital investment.

That the FAA has detailed its plans to airline lobbyists only underscored for me that the threat of furloughs and other travel-related scary delays was political posturing.

But I do wonder if in making specific claims about what they will cut, they lock themselves into those plans and find themselves forced to carry them out.

Update: Let me make my assumptions clearer here. Many of the comments on this post purporting to disagree with me are simply offering a different set of assumptions rather than confronting mine directly. I assume that’s my fault for not being clear enough about my suppositions. I am not simply ignoring the sequester mechanism of proportional cuts across an agency’s appropriation. Rather I’m contending that the mechanism carries less force than assumed.

  1. My argument is that agencies have greater discretion than is assumed as far as what to cut. It’s far less of an exercise of executive authority relative to Budget Control Act (as amended) language than is regularly exercised by recent Administrations.
  2. That agencies could use discretion to best carry out their missions without significant challenge, or at least without Court intervention. And that plausible arguments about what projects are a part of which ‘bucket’ could be made for legal purposes. That’s just the formalism. An agency that chose to borrow from its capital budget, or reclassify expenses to draw down that budget, would survive scrutiny. The Treasury has taken ‘extraordinary measures’ to avoid the debt ceiling…
  3. In fact, what appears to be strict language in the Budget Control Act about the way cuts need to apply equally across the board isn’t that strict at all. As the Washington Post‘s Wonkblog explains,

    What room there is comes from defining exactly what is meant by “programs,” “projects” and “activities.” “There is not a standard definition,” Stan Collender, a longtime Congressional budget hand currently at the PR firm Qorvis, explains. “It’s not something that exists anywhere else in nature.”

    ..accounts aren’t programs, projects or activities, and OMB still hasn’t laid out what programs, projects and activities are subject to the sequester… Which set of definitions you use has major implications for how much flexibility administrators get, and yet Congress has laid out none of them.

    Not everyone sees this level of flexibility, but the FAA is choosing not to see it.

  4. Fundamentally the FAA is choosing to suggest cuts would be made that are highly visible — inconveniencing travelers ensures news coverage, costing money to the airlines and informing the airlines’ lobbyists of this elicits corporate pressure on Congress, and threatening worker furloughs mobilizes government employee unions.
  5. Threats to visible programs, to elicit public and political support, box the agency into a position where they’re more likely to actually make those cuts. What seems like strategic talk could turn out to have real consequences.

It’s perfectly fair to disagree with these positions. But simply saying an agency must cut proportionally does not answer my argument that such a requirement is not a binding constraint — but that choosing to see it as a binding constraint is a political calculation, with real world consequences.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. You’re just wrong – the whole post is wrong.

    The sequester was written so that bureaucrats have zero discretion on how or where to cut. See: http://bipartisanpolicy.org/sites/default/files/The%20Sequester-%20Mechanics%20and%20Impact.pdf

    Takeaway quote: “Sequester cuts happen at “program-project-activity” (PPA) level” meaning that it is illegal for the FAA to cut NextGen to keep air traffic control running. All projects/departments have to be cut equally.

    There is zero manipulation and fake parade of horribles happening here. The FAA is cutting exactly as the law requires.

  2. From press reports, LaHood’s announcement today definitely sounded a lot like political grandstanding and was partisan in nature.

  3. I actually think you’re wrong about this, Gary. The way the sequester is written is that agencies don’t have the authority to “move money around.” Couple that with 12 months worth of cuts (a fiscal year) over 7 months (March 1 through September 30), and you’ve achieved your “parade of horribles.” This is not limited to FAA. All federal agencies are preparing for doing more with less, but without the actual ability to plan ahead in advance. While having FAA announce its plans first may be political posturing, I don’t question for one minute that FAA has to furlough employees and there is going to have to be a corresponding reduction in services provided. Add CBP and TSA furloughs, and yes, air travel will be quite annoying in a few weeks, provided no agreement is reached.
    http://www.businessinsider.com/repercussions-of-sequestration-2013-2
    And Secretary LaHood gave a press briefing at the White House, so the airline lobbyists aren’t the only ones to receive this information from the Department of Transportation.
    http://www.washingtonpost.com/local/trafficandcommuting/lahood-warns-of-long-waits-flight-delays/2013/02/22/a4d1b0b0-7d17-11e2-9a75-dab0201670da_story.html

  4. Surprised eliminating wheelchairs wasn’t first.

    There has to be a name for this sort of budget cut spite.

  5. Just eliminate all Members of Congress and the United States Senate’s salaries until they do their jobs and come to a compromise.

  6. There *is* a name for this sort of budget cut threat. It’s called the Washington Monument Ploy. Google it.

    State and local governments use this tecnique all the time: Vote for a tax increase or we’ll cut schools, road repairs, police services, and fire stations. There’s never a threat to cut spending that has low perceived value.

  7. So you’re saying that the department heads would rather furlough people, which of course will affect consumer spending and reverberate throughout the economy, and in doing so take on public sector unions, arguable the #1 ally of the Democratic party, just to score political points?

    And you support this position by pointing out that they’re speaking to lobbyists? Who ELSE would they speak to? Go on Oprah or something?

    I dunno, man. Granted I work for a federal agency so I’m a little biased, but your point doesn’t really make sense to me. These things aren’t so simple. For example, since we’re already almost halfway through the fiscal year, grants have already been allocated, and cannot be clawed back. That may be applicable to R&D funding in this context.

    I mean… I know you hate the bureaucracy. That doesn’t mean that everything is some big conspiracy. If it is, what’s the objective here? And if this was a big political game, wouldn’t the furloughs be targeted towards certain constituencys?

  8. Frankly, if they don’t make the cuts painful to the public, Congress will shrug and say “look we cut wasteful spending”. The squeaky wheel always gets the grease in Washington.

  9. @Kevin the FAA is already prioritizing. My analysis was buttressed by a former congressional budget staffer and a carer transportation analyst if you click through the links. And surely such prioritizing is less of an exercise in executive discretion than the current administration’s unilateral actions on illegal immigration in contravention of congressional intent or the last administration’s signing statements. That it would choose not to act similarly here is a political choice.

  10. Sorry Gary, that’s the point of sequestration. It’s a machete that was never supposed to be used. Contes didn’t allow any discretion for prioritizing the cuts. This is why DOD is going to furlough employees even though they have plenty of capital programs that could absorb these cuts. And, that’s why Congress has considered giving DOD direction to prioritize the cuts. Sequestration affects every agency’s budget categories proportionately.

    The airline lobbyists are the only group (within the TSA scope) that might be able to pressure Congress to do their job and pass a budget.

    As terrible as TSA is, this isn’t their fault. Time for you to issue a mea culpa. There’s plenty of legitimate things to lynch TSA on.

  11. I would listen to your readers, because they are right. Typically controllers were exempt during government shutdowns because they were classified as essential. This sequestration is different. I am an air traffic controller at a enroute center. The news today said controllers will face 11 furlough days until September. The FAA miscalculated and it sounds like it could be 16 days now (coming from union officials). I think the major hubs will be impacted…especially on the east coast. At my facility, we are not allowed to sit at a scope for more than 2 hours. Some facilities are short staffed, and if 15% of controllers are furloughed on top of that…..that means less sectors will be open and less traffic to be permitted into that same space. To reduce saturation they will reroute planes or implement ground stops/EFCs.

  12. Good catch. However, wrong acronym group, same point. FAA is even more analogous to DOD. It’s how sequester works.

  13. Gary,

    Your argument that FAA could avoid operational cuts by deferring capital investments in NextGen air traffic control doesn’t hold up. Per OMB sequestration cuts must be applied proportionally across an agency’s annual appropriations. Because FAA is funded across four accounts (operations, facilities & equipment, Airport Improvement program, and research and development) the cuts must be spread equally among those four accounts. FAA had no discretion to concentrate their sequestration in research and development.

  14. There is a movement afoot in Congress to give the President flexibility to implement the sequester — basically move cuts from one program to another. This would be a brilliant political move because it would put the burden on the President not to cut truly essential government services (like make sure there are enough air traffic controllers). And it would prevent the President from effectively offering up doomsday scenarios. Honestly, requiring gov’t managers to trim some fat in their budgets would be a good idea. It’s routinely done in the private sector.

  15. I work for DOD and the issue is that once you fence off Milpay, Retirement Annuities, Tricare, and Civpay net of furloughs, the cuts are pretty draconian, and we still don’t have appropriations past March.

    What is frustrating to me is that we are not cutting nearly enough from our travel budget in my AO and are doing so at the expense of soldier readiness. General Officers and their staffs are still criss crossing the globe, while at the same time we are parking our helicopters and tactical vehicles.

  16. @Carl. This is, of course, exactly what all organisations do everywhere. Look after No. 1 first and ensure that all decisions are oriented that way. Because there are no effective commercial pressures on Government and, conversely, it’s particularly suited to playing political games, Government organisations’ decisions defy even more logic than those of corporations. Hence, they cut lots of teachers rather than a handful of senior managers…

  17. @SC Parent and others are correct and your post is wrong Gary. Every single agency has furloughs as part of the cuts because they must absorb cuts in the civpay O&M bucket. They could also RIF (reduction in force) some personnel instead, but that actually ends up being more disruptive and costly in the end. Investment funds (R&D and production) dollars and operations dollars cannot be exchanged one for the other so agencies can’t just take more of a hit to investment funds and not O&M funds.

    But all of that aside, your “advice” in the first posting in Sep that we don’t need to worry about any travel impact was mis-informed and hasty…whether you agreed or disagreed with FAA’s plans, it was obvious they would be happen if sequester hit. To have predicted otherwise was foolish. Now that the stuff is going to hit the fan, you’re looking to cover your bad assurances with a misunderstanding of the law.

  18. As an accountant, one thing of which I am certain, no matter how a law/accounting principle is written, the intent and how it is executed are not necessarily the same thing. Because it is about numbers people believe accounting to be black and white. The reality is accounting is far more gray than most people believe. Good post Gary. Whether people agree or disagree with you, at least you have shared another point of view!

  19. It really only rolls back the budget to 2011 spending. How they cut is propaganda. It shows how addicted they are to spending money we don’t have.

  20. “choosing to see it as a binding constraint is a political calculation, with real world consequences.”

    Or could be a legal interpretation – if the OLC says that PPA means that FAA has no flexibility but the FAA violates, dollars to donuts you’d have a post about how corrupt the FAA is given that they went against OLC.

    Moreover, PPA has to mean something. If we broadly interpret it to the category of “current air traffic control” how would you propose to cut that budget by 10% for the rest of the year? Probably by doing a lot of the things the FAA just proposed!

  21. It isn’t peculiar to this administration. To get the scare stories out there, they find it convenient to make the cuts where they will create the most damage, rather than the least. It’s dishonorable at best, politics as usual at worst. I think a lot of people are tired of these permanent government crises. Stop kicking these things 60 days down the road, and get serious.

  22. Well. The comments criticizing Gary are true to an extent. Except…. OMB and OPM are telling departments to prepare two versions of the sequester budget, one with no flexibility and one with total flexibility. Some departments are telling their agencies to assume the flexible version for now, although it does need Congressional approval. And, contrary to several posts here, not all agencies will have furloughs if they’re allowed to use the flexible version of the sequester. So, the White House has a way out of many of the furloughs and is planning on the executive branch using that way out. They just want to grandstand till the last minute, hoping the GOP will take the blame.

  23. @27 Autolycus

    No, that’s because there is a bill in Congress to give flexibility to the sequester. The two versions contemplate the possibility of it passing or not.

    Fact is, if no new legislation, BY LAW sequester has to be implemented with no flexibility.

  24. “The way the law is written” is a bunch of hooey. The law requires the government to pass a Federal budget every year, and none has been passed since Obama was first elected. The law requires Gulf of Mexico oil leases to be given out, but the Obama administration refuses to do it. The law requires that interim appointments be made only when Congress is in recess, but the NLRB has two members appointed when not in recess, and the Courts have ruled that their appointments were illegal, but that board keeps on meeting and passing new rules and judgments. The law requires that ileagal immigrants be deported, but Obama simply gave an Executive Order to stop that from being done. He could just as easily give an Executive Order to maintain full staffing for ATCs as a matter of public safety. Is the DOJ going to take him to court over that?

    So what is forcing the FAA to reduce ATC staffing instead of cutting hours for senior managers and paper shufflers? How about closing down some of those airports that have a dozen passengers a day instead of cuts at ORD and JFK? It’s obvious, the Administration wants to make this as painful as possible for as many people as possible, to ensure public pressure to return every single tax dollar for them to spend.

    They will cut back ATC hours way before they will cut back senior managers travel to international conferences and other assorted boondoggles. As DaninSTL pointed out above, we are only talking about cutting spending back to 2011 levels, which was much higher than 2010 levels, which was much higher than 2009 levels, etc. No reason the government can’t operate on the inflated spending levels of just 2 years ago.

    The real fear here is that spending can easily be cut back to the levels of just a few years ago, and everything will go on just fine. Governments are tax dollar addicts and don’t want to give up any of it. Try to take away even a dollar from them, and they will make it as painful for the general public as possible, hoping to get every single wasteful tax dollar back.

  25. “From press reports, LaHood’s announcement today definitely sounded a lot like political grandstanding and was partisan in nature.”

    Partisan? You know that LaHood is a Republican, right?

  26. Gary, your non-political posts are much better than your political posts. If your goal is to get lots of comments on a post, then I can see why you’re writing the political posts. But if your goal is to make this blog a valuable resource for readers, I’d suggest sticking to the non-political stuff.

  27. @Rob my goal is what it has always been .. to write about what seems interesting to me. In this case I got an email question and I decided to blog my answer.

    And for what it’s worth I really don’t think of the post as ‘political’ in the sense of being for or against any political party. And it’s very much about what to expect in upcoming travel, that just happens to be influenced by policy.

  28. “You know that LaHood is a Republican, right?” But I’m a Democrat, and I hate everything Obama stands for. It’s not about “party’s” it’s about philosophy.

    Some “liberal” Republican hacks are pro-government dominance, aka RINO, republican in name only. Some Blue Dog Democrats are pro-freedom in the traditional sense.

    I am a Conservative, ie what the Constitution originally meant. I understand some of you are playing political “our team vs their team”, but I’m not on a team. I am pro Constitution, pro-capitalist, pro-individual freedom. Life is too short for these political power games.

  29. If there is major disruption at airports, I wonder whether Congress will consider re-privatizing security screening. Private screening has the advantage that the responsible organization is to some degree responsive to customer complaints. A government agency: not so much.

  30. @nsx – Privatizing would be great, but that would be a good business/customer service decision. Congress wouldn’t do that 🙂

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