CONGRESS - For Shuster, There's Turbulence Ahead

By Mark Murray, National Journal
© National Journal Group Inc.
Saturday, July 10, 1999

	      Since becoming chairman of the House Transportation and 
Infrastructure Committee four years ago, Rep. Bud Shuster, R-Pa., 
has turned into a larger-than-life figure on Capitol Hill by 
winning last year's enormous highway spending increase, rewarding 
his supporters with pork barrel projects while punishing his 
detractors, and frustrating his own party's leadership. After the 
House passed his sweeping bill last month to reauthorize the 
Federal Aviation Administration, his reputation has grown even 
more. ''This guy is a power unto his own,'' Rep. Ray LaHood, R- 
Ill., told The Washington Post. ''The real king of the House,'' 
wrote syndicated columnist Robert D. Novak. 
	     But in the next few weeks Shuster will be facing one of 
his greatest challenges. Before his aviation bill is written into 
the law books, it still has to clear three formidable hurdles: 
the radically different bill in the Senate drafted by Sen. John 
McCain, R-Ariz.; angry appropriators and budgeteers who'll be 
sitting on the conference committee; and a Clinton Administration 
that has already threatened to veto his legislation. All will be 
tough battles, even for King Bud. 
	     Despite the opposition, congressional aides and aviation 
lobbyists speculate that Shuster may cut some deals during the 
conference committee to push his measure over the top. For 
starters, he might use the same tactic he unveiled during last 
year's highway bill debate--a budgetary fire wall compromise--to 
soothe some of his critics. And he could wheel and deal with 
McCain, the chairman of the Senate Commerce, Science, and 
Transportation Committee, by giving the Arizona Republican what 
he really wants: more flights into Washington's Reagan National 
Airport. But the bad news for Shuster is that his critics in the 
Senate might also have a trick or two up their sleeves. 
	     Shuster's Aviation Investment and Reform Act for the 21st 
Century, which passed the House, 316-110, on June 15, spends $ 57 
billion from 2001-2004 to improve the nation's aviation 
infrastructure--$ 14.3 billion more than was called for in the 
GOP's budget agreement. It also promotes more airline competition 
by eliminating the restrictive slot systems at Chicago's O'Hare 
Airport in 2002, and at New York's LaGuardia and John F. Kennedy 
airports in 2007. And the bill opens up six additional flights 
(or slots) at Reagan National. 
	     The centerpiece of Shuster's bill, however, is taking the 
Airport and Airway Trust Fund off-budget to pay for this huge 
spending increase. This fund, which consists of revenue from 
taxes on airline tickets and aviation fuel, finances the FAA's 
operations, aviation programs, and airport construction grants. 
Shuster's committee points out that the trust fund has 
accumulated large cash reserves, which have been used to offset 
other federal spending rather than to pay for aviation 
improvements. 
	     By taking the trust fund off-budget, these funds would be 
used only for aviation spending--no longer affecting the bottom 
line for the rest of the federal budget. ''We pay a tax every 
time we fly, and now we will have those taxes invested in making 
our skies safer and our airports more efficient,'' Shuster has 
said. Moreover, the chairman wants the general fund (made up of 
federal income taxes) to help pay for the FAA's operations. 
	     This off-budget move is also the bill's most 
controversial provision. Appropriators, budgeteers, and the 
Administration argue that unlocking the trust fund would result 
in huge increases in aviation spending, and thus would require, 
under the Balanced Budget Act of 1997, large offsetting cuts in 
domestic programs or tax-reduction plans. (Indeed, Shuster had 
admitted that his bill would cut into the GOP's $ 778 billion tax- 
cut proposal. But now, with the Congressional Budget Office's 
larger surplus projections, he said that his off-budget move 
won't affect the tax plan.) In addition, they charge that 
Shuster's plan throws billions of dollars more at the FAA, which 
has mismanaged its funds in the past. Furthermore, appropriators 
contend that taking the trust fund off-budget would cause them to 
lose their important role of oversight of the FAA and its 
programs. An amendment by House Appropriations Committee Chairman 
C.W. (Bill) Young, R-Fla., and House Budget Committee Chairman 
John R. Kasich, R-Ohio, to roll back Shuster's off-budget plan 
was defeated, 179-248. 
	     McCain, whose own FAA reauthorization bill awaits Senate 
floor action later this month, also opposes Shuster's effort to 
unlock the trust fund. Unlike Shuster's expensive proposal, 
McCain's bill slightly increases aviation funding only through 
fiscal year 2000. 
	     The Administration has threatened to veto Shuster's off- 
budget plan. ''Off budget is just a nonstarter,'' Transportation 
Secretary Rodney E. Slater told National Journal. Administration 
officials like to point out that Shuster's victory over the 
Young-Kasich amendment shows that his off-budget initiative is 
not veto-proof. 
	     The Transportation Department, meanwhile, has proposed 
financing the FAA and its programs through a combination of new 
user fees, an increase in the cap on the Passenger Facility 
Charge, and funding for airport construction grants. Slater says 
that this plan provides a record level of investment within the 
budget caps, but many Hill observers believe that this proposal-- 
particularly the user fees--isn't being seriously considered. In 
addition, the Administration wants to eliminate the slot systems 
at O'Hare, LaGuardia, and JFK by 2004. 
	     Because of this opposition to Shuster's off-budget 
crusade, many observers believe he will unveil a compromise that 
worked for him last year: the fire wall. During the debate over 
the $ 218 billion highway bill (formally called the Transportation 
Equity Act for the 21st Century, or TEA-21), Shuster wanted to 
finance huge increases in transportation spending by taking the 
highway trust fund off-budget. But faced with the same kind of 
opposition this year--irked appropriators and veto threats from 
the Administration--Shuster opted to keep the highway trust fund 
''on budget,'' thus allowing that money to keep propping up the 
federal budget balance. Yet he also placed a fire wall around the 
trust fund, ensuring that a minimum amount of the fund would 
finance increased highway spending. 
	     During an interview in May, Jack Schenendorf, Shuster's 
chief of staff on the committee, explained that reaching for the 
fire wall compromise is a likely solution to the off-budget 
objections during negotiations with the Senate and 
Administration. ''We already have a TEA-21 model out there for 
budgetary treatment,'' he said. ''So while (negotiations are) not 
going to be easy, there's a light at the end of the tunnel.'' 
	     But such a compromise won't placate everyone. Although 
the Administration acquiesced last year to the fire wall, Slater 
noted that the White House's commitments to shoring up Social 
Security and Medicare make it unlikely that the Administration 
would support increased spending under a fire wall. Moreover, 
Senate Appropriations Committee Chairman Ted Stevens, R-Alaska, 
Senate Budget Committee Chairman Pete V. Domenici, R-N.M., and 
Senate Budget Committee ranking member Frank R. Lautenberg, D- 
N.J.--all of whom are expected to sit on the conference 
committee--have (at the least) serious questions about a fire 
wall. And other observers point out that while Shuster got his 
highway fire wall last year, he had to give up the general fund 
contribution--something he's adamantly opposed to losing this 
time around. 
	     Besides the fire wall, Shuster has another strategy at 
his disposal: He can cut a deal with McCain. While Shuster's bill 
is based on the off-budget move, McCain's priority is opening up 
48 slots at Reagan National Airport. Shuster's bill opens just 
six. Dayna Cade, director of government affairs at the Airports 
Council International, which supports Shuster's legislation, 
explains that McCain might compromise with Shuster on the budget 
treatment if Shuster meets McCain halfway on Reagan National. 
''It's only natural to think they may make a trade there,'' she 
said. 
	     But there's some speculation that Senate Majority Leader 
Trent Lott, R-Miss., and the Senate leadership are planning to 
take away Shuster's leverage with slots. According to one GOP 
House aide, Senate leaders are considering whether to remove the 
competition measures from McCain's legislation, making it a 
numbers-only bill. There's also speculation that these leaders 
might divide McCain's bill into two bills--one that funds the 
FAA's programs and the other that addresses competition. ''I 
can't imagine that McCain would do it, but the Senate is looking 
for a way out,'' the aide said. Meanwhile, Senate leaders keep 
delaying a vote on McCain's bill, which cleared the committee in 
February. 
	     In handicapping the endgame, some Capitol Hill oddsmakers 
predict that Shuster will not be able to duplicate last year's 
highway success. For one thing, some congressional observers 
point out that Shuster's plan doesn't have the same kind of 
appeal that the highway bill did because not all members have 
large airports in their districts. They also note that Shuster's 
bill doesn't have the pork with which he was able to tantalize 
members during the highway negotiations. 
	     The cash-heavy major airlines are another potential 
roadblock for Shuster. They're disappointed that his proposals 
and those of the Administration seek to increase the Passenger 
Facility Charge, which they view as an additional tax. Even 
though the airlines support taking the trust fund off-budget, 
some believe that they might lobby to pass just a one-year 
reauthorization extension. 
	     Nevertheless, virtually everyone agrees on one thing: 
never underestimate Bud Shuster. As Cade noted, Shuster has a lot 
of momentum from his lopsided victory in the House last month. In 
addition, said one congressional staffer, Shuster knows more 
about the politics of the aviation trust fund than any of his 
adversaries on the conference committee--including McCain, who's 
busy running for the GOP's presidential nomination. ''The only 
one that has taken the time is Bud Shuster. It gives him a huge 
advantage,'' said the staffer. 
	     And while Shuster's bill currently has no pork in it, 
some say they wouldn't be surprised if he pulls out a few 
earmarked projects--such as airport terminal renovations or 
additional runways--to get the budget treatment he desires. ''If 
it were anyone else but Bud Shuster, I would say that this thing 
will get kicked down the road,'' said another staffer who works 
in the Senate. ''You just can't discount this guy.''