How AIR-21 Took Off

By Jeff Plungis

President Clinton's mid-October signature on the fiscal year 2001 transportation spending bill with its record $3.2 billion for the Airport Improvement Program - coupled with a 50 percent increase in the Passenger Facility Charge (PFC) authority secured earlier in the year as part of the FAA reauthorization bill - means the cash is about to start flowing and aviation matters will surely receive new national attention.

In the midst of all this excitement, it's easy to forget that this outcome not too long ago was far from a foregone conclusion.

Before the Aviation Investment and Reform Act for the 21st Century (AIR-21) cleared this March, lawmakers had dithered over the issues for years. Aviation programs limped by on a series of short-term extensions that did nothing to address the major issues. The questions of how much to fund airports and whether the Airport and Airway Trust Fund should be insulated from the regular federal budget process were entangled in serious congressional in-fighting. Airlines and airports tangled about PFCs and the proposals to increase the local fee. At several points over the past two years, it looked like the fight for airport funding would be lost.

The airport lobbying success owes a lot to a major effort by the industry's two main trade associations, the American Association of Airport Executives (AAAE) and Airports Council International-North America (ACI-NA). The two worked closely together throughout the two-year effort and have now officially merged their government relations departments (see related story on Page 24 of this issue).

"When it looked like there might be problems, AAAE and ACI went into high gear," said Jimmy Duncan Jr. (R-Tennessee), the chairman of the House aviation subcommittee. "I could sense a shift of direction. Members were coming to me, asking about the bill and asking how they could help."

Lawmakers and congressional insiders attribute the huge payoff for airports to a combination of enlisting key allies, successfully navigating the shoals of conflicting congressional factions, consistency and honesty in their message - and fortuitous timing, in the form of a record federal budget surplus.

The first decision the airport groups made was one of their most important - joining forces with House Transportation and Infrastructure Committee Chairman Bud Shuster (R-Pennsylvania) - to wage a campaign to "unlock" the Airport and Airway Trust Fund.

Shuster Legacy

Shuster saw the aviation bill as an essential part of his legacy as chairman. He had secured record levels of highway funding in 1998 with the passage of the Transportation Equity Act for the 21st Century (TEA-21). A cornerstone of that bill was its guaranteed spending levels, tied to the receipts generated by federal gasoline taxes in the Highway Trust Fund. Shuster wanted similar guarantees for the aviation trust fund, a result that would greatly increase spending for the Airport Improvement Program.

AAAE and ACI-NA were key elements of a coalition Shuster built and managed to push AIR-21. Dozens of other aviation groups, like the Air Transport Association (ATA) and the Aircraft Owners and Pilots Association (AOPA), also joined. The airline industry agreed with Shuster's goal of taking the aviation trust fund "off-budget." The construction industry that had championed TEA-21 - through groups like the Associated General Contractors and the American Road and Transportation Builders Association - were other key players.

Shuster employed the same techniques that had worked on the highway bill: harness the grassroots power of the trade groups' members, whose personal contact is much more influential with lawmakers than that of Washington lobbyists. "The airports did a good grassroots effort," said Jack Schenendorf, chief of staff of the Transportation and Infrastructure Committee. "Members heard from their airports, and there is no substitute for that."

One lawmaker who heard from the airports in his district, Ray LaHood (R-Illinois), related how he became convinced of the importance of AIR-21. Executives from the Peoria and Springfield airports talked to him about the jobs airport expansion could create and the benefits of increased air service to the regional economy. They pressed the need for increased funding (both AIP and PFCs) for runway extensions at the two facilities. "These airports have become an economic development engine almost unlike anything else in the community," LaHood said. "And they could never have done [these investments] on their own."

Airports managed the difficult task of being part of Shuster's coalition without angering his many enemies in both chambers of Congress - especially appropriators, who would be making final decisions about AIP when the annual spending bill was written.

Budget Hawks

Shuster's penchant for spending on transportation projects ran smack into the fervor of GOP budget hawks like House Budget Chairman John R. Kasich (R-Ohio) and Majority Whip Tom DeLay (R-Texas). Appropriators of both parties saw the concept of dedicated trust funds as an intrusion on their power to control spending. And a bloc of senators who would be on the other side of the negotiating table in conference committee were still seething from being outmaneuvered on TEA-21.

But in Shuster, the airports were working with one of the shrewdest players in Washington. He defeated Kasich and DeLay on the highway bill, managing to pick off some members of the revolutionary class of 1994 who had fervently followed the leadership of House Speaker Newt Gingrich (R-Georgia). Many of the young fiscal conservatives were pragmatic enough to support Shuster's offer of infrastructure investments in their districts.

But Kasich, DeLay and other House heavyweights like Appropriations Chairman C.W. "Bill" Young (R-Florida) and Ways and Means Chairman Bill Archer (R-Texas), were looking for a rematch. They thought the aviation bill would be a tougher sell to the members than the highway bill, since not as many projects were involved.

The conflict came to a head on the House floor, when appropriators from both parties pleaded with the House to maintain the integrity of the budget process. The senior Democrat on the Appropriations Committee, David R. Obey of Wisconsin, said it would be wrong to put airports ahead of all other budget priorities, like health research, veterans' benefits and education. "Airports are high priorities," Obey said in a floor speech, "but I don't see why we should insulate them from cuts and require deeper cuts in other programs."

The House battle was won hours afterwards, when a 248-179 majority rejected an amendment sponsored by several of the House's most powerful members to strip the budgetary protections of the trust fund from the bill. The bill passed on a surprisingly lopsided 316-110 vote.

But the real success for the airport groups was winning that kind of vote by that kind of margin without making enemies. "They knew it was a big risk," one House Appropriations aide said. "They knew if they were too close to Shuster and Shuster failed, we would have cut their program to ribbons. They were really good at staying out of fights that weren't theirs," said another congressional insider. "It was always clear why they were where they were."

Other groups did not fare as well. For example, according to one observer, the AOPA offended a number of appropriators with an editorial in their magazine that was perceived as being too gushing in praise for Shuster. Some of the group's highest spending priorities received no funding in the House version of the spending bill.

PFC Politics

Airports and the airline industry worked together on the trust fund issue, but they were bitterly at odds with each other over a key airport priority, an increase in the PFC.

Here again, airport groups managed to work through the tricky politics of the issue. The better-funded airline industry and its trade group, the ATA, suffered from internal divisions and misjudgments that cost them dearly, according to key participants.

In the view of the airlines, a PFC increase was a triple-whammy: it could raise the price of airline tickets; the airlines would have to do a lot of administrative work for money that would go to airports, and airports could use the money to build gates and improve facilities to foster competition that some of the airlines opposed.

But the airlines were overconfident of their case. They did not believe a Republican Congress would ever allow a PFC increase in an election year. They described it as a tax, but they offended lawmakers by criticizing them if they disagreed. "The airlines tried to steamroll the opposition, but they didn't have the horsepower," said a Senate aide.

The airlines further suffered from internal divisions and, at times, a confused message. When the ATA made an attempt to back a compromise on PFCs, Continental went on its own to House Majority Whip DeLay to say that any PFC increase would never be acceptable. Lawmakers and their staff picked up on the confusion among the airlines, and it made support difficult even for their natural allies.

To counter the airlines well-funded effort on the PFC issue, airport groups stepped up their legislative presence. ACI-NA hired additional consultants, lobbyists and public relations professionals to help match the airlines. "ACI-NA deserves a lot of credit for making the financial commitment necessary to bring significant additional outside help to secure the PFC increases and AIP funding," said Todd Hauptli, senior vice president for AAAE/ACI-NA legislative affairs.

Senate Opposition

Meanwhile, opposition to Shuster's plan was growing in the Senate in the early months of 2000. Senior Republicans like Budget Chairman Pete Domenici (R-New Mexico) thought that an aviation plan that included spending guarantees would blow a hole through the budget blueprint Congress had just approved.

In March, Shuster moved to close the deal. He knew that once the spending bills started being written, his chances of getting an aviation bill with a $2.7 billion increase for fiscal 2001 would slip away.

Fortunately for airports, Senate Majority Leader Trent Lott (R-Mississippi) decided to make the bill a top priority. He personally would negotiate a deal with key senators, including Domenici, Appropriations Chairman Ted Stevens (R-Alaska), transportation appropriations subcommittee Chairman Richard Shelby (R-Alabama); Commerce Committee Chairman John McCain (R-Arizona), and aviation subcommittee Chairman Slade Gorton (R-Washington).

Lott and Shelby came to see that their spending priorities were similar to Shuster's. They liked making capital investment programs like AIP and the FAA's facilities and equipment account the top priority - a reversal from past aviation spending plans put forward by the Clinton administration, which focused on operations funding. That laid the groundwork for a deal.

There was enough money in the trust fund to ensure a huge funding increase for the capital programs but not enough to cover all of the FAA's operations needs. By limiting the guarantees to the trust fund money, appropriators could retain some control over the rest of the budget.

With the help of the AAAE and ACI-NA lobbying efforts, many senators saw that the increased airport spending could help them back home. And eventually, appropriators in the House learned to adapt to the new realities of AIR-21. The transportation spending bill includes earmarks for AIP for the first time - 162 specially requested projects that will enable individual House members to win praise back home.

But with all the factors coming together for airports this year, there is no guarantee the federal largess will flow forever. The budget dynamics could quickly change if federal surpluses disappear or attention on flight delays causes a shift of attention to air traffic control. The AIR-21 spending guarantees are not iron-clad: 51 votes in the Senate would overcome the bill's protections on the trust fund.

"You and I cannot afford to rest on our laurels," Senator Jay Rockefeller (D-West Virginia) told attendees at AAAE's annual conference this past May in Baltimore, Maryland. "There are still just too many uncertainties and too much work to be done. We have no choice but to turn our attention immediately to the long-term task of creating an even better, safer and more efficient air transportation system."

Jeff Plungis is a Washington, D.C.-based journalist who tracked the AIR-21 legislative process for Congressional Quarterly.