Free the FAA

Originally published in The Boston Globe

August 11, 2011
Edward Glaeser (Glimp Professor of Economics, Harvard University)

The Federal Aviation Administration does a fine job at its main duty - making air travel safe. But it’s is also involved with a lot of things it shouldn’t be, from disputes about unionization to subsidies for rural airports. If Americans want to keep flying safely, Congress must free the FAA from obligations unrelated to preventing accidents.
The agency got back to work recently after a two-week, politically charged shutdown that had nothing to do with safety. To continue some operations related to planning and maintaining airports, the FAA needed new authorization from Congress. But the Senate initially balked at a House plan that also capped “essential air service’’ subsidies to rural airports at $1,000 per passenger. Some Senate Democrats also opposed a House plan that, by reversing a pro-union ruling last year by the National Mediation Board, would make it harder for workers on airport projects to organize.

As a policy matter, lawmakers should limit subsidies; anyone who worries about carbon emissions should be apoplectic that the government is bribing people over $1,000 each to take another flight. It’s also legitimate for Congress to question rulings by the National Mediation Board. Yet neither issue is relevant to air traffic safety, and FAA reauthorization should never be tied to such matters.
Most air travel is quite safe. Fatal accidents in air carriers now occur once in every 10 million flight hours - less than a third of the rate 20 years ago. The death rate is about 100 times higher in general aviation, which includes private planes. (Lowering that death rate would require tougher restrictions on recreational flying.) But air safety in all its forms might be compromised by a Washington donnybrook over unrelated matters. We can avoid that if the FAA becomes only a safety regulator, whose funding and operations are uncoupled from other issues of air travel.
What would a dedicated Federal Air Safety Administration look like? Like today’s FAA, it would have plenty of inspectors, who would oversee the construction and maintenance of infrastructure and equipment. It would continue to run the air traffic control system, and develop programs like NextGen, which uses new technologies to improve air safety.

But unlike today’s FAA, a safety-only agency would not subsidize airports or flying. The current budget requests over $3.5 billion in grants to individual airports. That’s unwise; let airports charge their users enough to pay their own costs. Furthermore, a safety-dedicated agency would not punish airlines for flight delays. If we want to punish airlines for bad service, let some other arm of the Department of Transportation handle that. Nor would this agency help design so-called “Aerotropolises’’ - big commercial clusters around major airports. Today, the FAA does this by helping to connect highways and airports. Let local authorities handle such planning.
The FAA also needs a new way to pay for its operations: a fee based on the cost of regulating airlines, rather than the current ticket tax. A Southwest flight creates the same risks as a flight by a more expensive carrier. Why should that discount airline pay less for safety? Instead, the FAA could charge flight fees that differ by distance, airplane size, and other factors that determine risk and cost.
Before 1978, when the Civil Aeronautics Board kept prices uniform, a ticket tax was essentially the same thing as a flight-based safety fee. But today, when there are vast differences in ticket prices along similar routes, it makes little sense to charge low-price carriers less for their safety costs. Moreover, since the ticket tax is more like a standard tax than a user fee, it encourages Congress and the public to think the FAA should, like other tax-funded agencies, do everything it can to serve the general welfare. If the FAA is funded exclusively by a cost-based safety fee, it won’t be seen as having pot of money that can be used to subsidize pet causes.
The FAA shutdown, like the near default of the United States, is a crisis that calls for institutional reforms to create a more professional, more effective government. One such reform is eliminating unnecessary distractions from the FAA, and giving it one focus - air safety - and a more stable, more sensible source of money.