Click here for video of this hearing.
The witnesses were:
Chairman Stevens'Opening Statement and Q&A
TSA FY2006 Budget Hearing
April 26, 2005
I think there are a few extra-curricular activities going on around here today, but we’d like to start the hearing if we may. We want to welcome back the witnesses who were scheduled to appear on February 15th. Today’s focus will be on the effect of the Fiscal Year 2006 Transportation Security Agency budget request on the aviation industry and the American economy. Now, sometime ago, fifteen members of our Committee signed a letter to the Appropriations Committee requesting that the passenger fee increase not be included in the Homeland Security Appropriations bill. Chairman Gregg is aware of our concerns and has raised similar issues in Appropriations hearings. We look forward to learning more about the impact of this proposal from our witnesses.
Q&A – Round One
Chairman Stevens: Thanks very much to the two of you for returning. I know that was a difficult time in the first hearing and you sat with us patiently, but we appreciate your taking your time to come back and complete the hearing. Mr. Barclay, have your people worked on the Registered Traveler and the Transportation Worker Identification Credential programs? Are you working with the TSA on that?
Mr. Barclay: We are, Mr. Chairman, and together with Jim and his folks and most of the people in the industry, we couldn’t agree more with the necessity to get a program like that going in order to know more about people willing to volunteer information on themselves. It helps us do a much better job of spreading resources. If I could just pass on too, we have a number of important partnerships with TSA, one of which is on the background checks of the airport workers – of airport and airline workers. One of the things that’s happened since 9-11 is that good news has not been news. And, we’ve worked together with TSA to do background checks on 1.6 million workers. Pre-9-11 that process used to take 52 days to do the check on a worker, now it takes four hours to do it. And, that’s a success story that’s saved hundreds of millions of dollars for the industry. It’s a success story that we’ve worked together with TSA on and we think there are more partnerships like that, with Jim’s organization, with ours, and with TSA on programs like Registered Traveler that can greatly benefit the system
Chairman Stevens: Are you familiar with the GAO Report concerning that adequacy of security of airport perimeters and the various access controls? You’re familiar with that aren’t you?
Mr. Barclay: Yes, sir.
Chairman Stevens: Have airports and TSA done enough to meet the comments of GAO, to respond to that report?
Mr. Barclay: Airports, again, have local law enforcement there are each airport and if we can get some consistent rules on how we want those local police departments to operate, you’ll find very, very good compliance out there among local governments. So, we are working with TSA to respond to the specifics on that. On access control, we’re way ahead of all other industries because virtually every major airport already has a highly developed access control system to and from the secure areas of airports. We need to add biometrics to that, but we have to get standards out of the government before we can add those biometrics, so we don’t have to do it twice, and there is more we can do, but airports are determined to do that in the future.
Chairman Stevens: Are you satisfied there is a sufficient worker identification credential program? Is there one in place right now?
Mr. Barclay: Well, there is at each airport and we’re doing criminal history record checks as I say with the Federal government. I do think there’s more that needs to be done there. We, for example, when you run checks even after you run people through the FBI process, with a criminal history record check, you’ll still find about five percent of people whose name won’t match their social security number and their address. Now, folks that are not telling you the truth about who they are might be in the – that’s a risk group I want to take a very, very close look at, as opposed to somebody who simply has been guilty of a crime when they were in college. We need to and airports want to do more on these checks, particularly of our workers, but many of those same concepts apply to security in the system in general.
Chairman Stevens: Do we need to go further to mandate TSA to work with your industry on these issues – access, worker security, and basic transportation security?
Mr. Barclay: We have proposals on that Mr. Chairman we’d like to share with the Committee that we do think that would be helpful. It would be helpful for TSA and DHS. It would be helpful for us. And they build on the example of successful partnerships I was mentioning earlier.
Chairman Stevens: Well, there seems to be some disconnection, so we’d like to have those. I’m sure the rest of the Committee would too, would like to have a chance to look at those. With regard to the airlines themselves, we have some problems about passenger fees. I think that’s the subject here, but why does the industry take the position that with the current economy that these fees would really be a greater detriment to travel. Is that your position?
Mr. May: Well, sir, I think our position is that one, aviation security is national security and ought to be paid for accordingly. Two, we are already contributing $3.2 billion annually to the TSA. On top of that we have about another $2 billion in out-of-pocket expenses that according to the enabling legislation were to have been reimbursed that have never been reimbursed – issues like cargo security, catering screening, and a whole range of other activities. So, we don’t feel like we’re not paying our fair share, since we’re the only people paying into DHS or TSA of any industry. And, I think that needs to change. And the idea that you’re going to levy another $2 billion on an industry that just finished losing $10 billion last year, $33 (billion) over the last three years and expect us to pass it through to the passenger in an environment where we literally don’t have any pricing power is just wholly unrealistic. It’s going to come directly from the bottom line. Our carriers have done a terrific job of managing the costs they can manage. The ones they can’t are the taxes and the fees and the price of oil.
Chairman Stevens: Last question, as I understand it, this fee, if we approved it, would not increase the amount of money available to TSA, it would just replace some of the current sources of funds. Now, what if we said, okay, we’ll approve the fee, but it all has to go to TSA. Do you think it’s needed?
Mr. May: I think TSA would have to prove that they have a real use for that money that it’s going to substantially improve aviation security, number one. And they’re going to have to demonstrate that they’ve got a functioning management team that knows what they’re doing, number two. And, I don’t think those two hurdles can be achieved.
Chairman Stevens: Thank you.
Q&A – Round Two
Chairman Stevens: I am told that fees now collected – $2.3 billion – would support about $23 billion in bonding, but that assumes you don’t have any of the screening processes for passengers. I was going to ask the question whether there would be the opposition to the fees if we dedicated them to the payment of bonding for the new baggage screening concepts that are before us.
Mr. May: I expect you might have a difference of opinion at the table here on that. Senator, we very firmly believe that we’re at the max of what we’re paying into the TSA right now. We don’t disagree that they need to have more equipment and they need to have higher volume and they need to be able to handle greater size of packages going through for cargo in particular, and greater inline EDS screening, but we very firmly don’t believe that that ought to come out of the hides of the airlines.
Mr. Barclay: Mr. Chairman, let me add that there wouldn’t be a disagreement. We do, again, think the first place we want to look to for the funding source for building inline are the people who are going to get the savings in the cost of their personnel, because that savings more than pays back the cost of building them in. So, we really should look for a creative financing mechanism within government because government is going to earn that savings and it’s going to be real and valuable to them in very short order. And, airports will use their capital financing capabilities to make it even easier for government to do that.
Chairman Stevens: That would be alright if we could find what portion we could take away from TSA now to dedicate to those bonds. Perhaps the next version of the Aviation News Network will give us a solution. Thank you very much.
Witness Panel 1
Chip BarclayPresidentAmerican Association of Airport Executives