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January 08, 1999, Friday, Final Edition

SECTION: FINANCIAL; Pg. F03

LENGTH: 656 words

HEADLINE: Shuster Wants FAA Separated From DOT; Lawmaker Plans Aviation Overhaul

BYLINE: Don Phillips, Washington Post Staff Writer

BODY:

Rep. Bud Shuster (R-Pa.), chairman of the House Transportation and Infrastructure Committee, said yesterday that he will propose legislation this year to make all or part of the Federal Aviation Administration independent of the Department of Transportation and the White House.

The legislation would be part of a package of aviation bills this year, including what Shuster said is his top legislative agenda -- freeing money in the aviation trust funds from budget restrictions that limit spending, even when funds are technically available. Shuster is fresh from a victory last year in effectively taking the highway trust fund "off budget."

The various aviation trust funds had $ 4.3 billion in unspent funds at the end of last year and are projected to have $ 9 billion at the end of this year. The highway fund ended 1998 with $ 12 billion unspent. Shuster, who proved an effective advocate for his positions in the last Congress, outlined his legislative agenda for the upcoming Congress in a meeting with reporters. He was vague on some specifics but in other cases said he would pull bills off the floor if he doesn't get his way.

On aviation, Shuster said his committee will complete work on a bill reauthorizing the Airport Improvement Program by late February. The committee approved a short-term bill yesterday to carry the expiring program of airport grants another six months.

The FAA also must be reauthorized this year. Shuster said it is important that the FAA be freed of political restraints and given the power to move forward with air traffic control modernization and other vital programs. To help accomplish that goal, he said, he will push for air traffic control, and perhaps the whole FAA, to be made an independent agency modeled on the National Aeronautics and Space Administration.

"You take it out from under the Transportation Department," he said.

The independence would stop short of "privatization," he said, although he indicated he might consider transforming air traffic control into a private company in the future. He offered no other specifics.

A Transportation Department spokesman, Bill Schulz, said the department is strongly opposed to removing the FAA from the department. "We believe very strongly an increasingly integrated transportation system needs a cohesive Transportation Department," Schulz said.

Shuster's most uncompromising statements involved surface transportation. He said he will block any legislation to reregulate the trucking industry and railroads. The breakdown in rail service in the West in the past two years has led to calls for increased regulation, especially in the Senate.

"If I get rolled on truck and rail reregulation, I will pull the bill," he said. "There will be no bill."

If the Senate passes such a bill, he said he might be willing to negotiate on some points, but "we're not going to reregulate transportation."

Shuster also strongly hinted that he also would take legislative action if some railroad unions and other interests succeed in persuading the White House not to renominate Linda Morgan as chairman of the Surface Transportation Board (STB), which considers railroad mergers and oversees the little remaining regulation of the rail industry.

Shuster's lengthy and effusive praise of Morgan led a reporter to remind him that the Senate is in charge of confirming presidential appointees. "I'm in charge of the reauthorization bill," he said.

Asked if Morgan's demise would influence the shape of the upcoming STB reauthorization bill, he replied, "It certainly could." How, he was asked? "Not good," he said.

Shuster said the committee also may make some adjustments to the six-year highway-transit bill passed last year. He said the Transportation Department had asked for the bill to be reopened for unspecified reasons. But he said the committee will not entertain any policy changes. BUD SHUSTER

GRAPHIC: Photo, The Washington Post

LOAD-DATE: January 08, 1999