ADMINISTRATION SAYS HOUSE FAA PLAN CREATES FUTURE 29 PERCENT BUDGETARY SHORTFALL

ADMINISTRATION SAYS HOUSE FAA PLAN CREATES FUTURE 29 PERCENT BUDGETARY SHORTFALL

Clinton administration officials Wednesday said a House plan to reform the Federal Aviation Administration would provide too little future funding for the agency.

Secretary of Transportation Federico Pena and FAA Administrator David Hinson said a bill under consideration by the Aviation Subcommittee of the House Transportation and Infrastructure Committee does nothing to solve what they expect to be a 29 percent budgetary shortfall at the FAA in coming years."If there is not major financial reform in the immediate future, the FAA will have to take steps to cut services," Mr. Hinson told the House subcommittee in the second of its two hearings on the FAA Revitalization Act of 1995.

The bill, sponsored by a bipartisan group of House transportation leaders, would take the $12 billion aviation trust fund that relies on passenger ticket taxes, cargo waybill taxes and aviation fuel taxes, out of the federal budget process.

Taking the transportation trust funds off-budget is a primary legislative goal of Rep. Bud Shuster, R-Pa., chairman of the committee.

Aides have said the bookkeeping maneuver could free $4 billion to $6 billion in funds for capital investment in the FAA's aging air traffic control system.

But Mr. Pena said Wednesday that removing the trust funds from the budget would create financial problems elsewhere by requiring U.S. decisionmakers to find $12 billion in cuts among other programs.

Even then, "it doesn't solve the problem," Mr. Pena said. "It still doesn't, at the end of the day, come up with enough money to operate the FAA."

Instead, Mr. Pena said, the administration supports a bill it helped draft that was introduced in the Senate by Sen. John McCain, R-Ariz., a member of the Senate Commerce, Science and Transportation Committee. The Senate bill, introduced in the House by Rep. Bob Clement, D-Tenn., would let the FAA levy new user fees on airlines and air cargo services to generate revenue.

In the long run, Mr. Hinson said, he believes the FAA could become an entirely self-funded agency through the conversion of aviation taxes to dedicated user fees that would go directly to the FAA. The concept, while it has some appeal to legislators looking for ways to reduce the federal deficit, is raising concerns in the industry.

Carol B. Hallett, president of the Air Transport Association, said it supports reserving the aviation trust fund for the national aviation system by taking it off-budget.

Don Fuqua, president of the Aerospace Industries Association, which supports taking the trust fund off-budget, said: "We believe that a FAA funded solely by user fees would result in a system with no accountability or incentive to control costs . . . or make the system more efficient."

User fees would be "complex, paperwork-intensive, and subject to manipulation by bureaucrats," said Edward W. Simpson, president of the General Aviation Manufacturers Association.