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Midwest Electric Consumers Association is submitting this statement in support of the budget request for $13,335,000 for the Federal Power Commission for fiscal 1965. We believe that this amount is required to enable the Commission to protect the interests of the electric and gas consumers of this Nation adequately. We are especially interested in the requested appropriation of $2,520,000 for regulation of the electric power industry. We feel strongly that this is the minimum amount which will make it possible for the Commission to employ a staff of sufficient size to enable it to carry out its responsibilities under the Federal Power Act.

Many of our members are municipalities and have a great need for the protection which they can enjoy against excessive wholesale electric power and energy rates if the Federal Power Act is administered vigorously in the interest of the consumer as intended by Congress. A statement has been submitted to your committee by Alex Radin, general manager, American Public Power Association, in support of the requested appropriation. That statement explains in some detail the benefits municipal electric systems and electric consumers generally will derive from the effective administration in the public interest of the Federal Power Act.

We shall not lengthen this statement by repeating those benefits, but Midwest Consumers Electric Association wishes to associate itself with the views expressed in Mr. Radin's statement. We are especially hopeful that as a result of the March 6, 1964, decision of the U.S. Supreme Court in the City of Colton case, a vast number of additional consumers of electricity will be benefited by the rate protection provided for in the Federal act.

In this connection, we are concerned over the introduction of H.R. 11081 because a new subsection "(h)" proposed to be added to section 201 of the Federal Power Act would have the effect of nullifying parts II and III of the Federal Power Act and reversing the unanimous Supreme Court decision in the Colton case. This bill would destroy a protection against overcharges and inequitable contract terms which is provided by the current Commission, and leave in exchange a regulatory "gap" not covered by State commissions. Enactment of H.R. 11081 would kill or cripple meaningful regulatory control over many wholesale power transactions by private power companies, whose operations are increasingly interstate in character and national in impact.

We are not in a position to state that our membership approves of all of the action taken by the Commission in the past year. At our annual meeting, held in Denver, Colo., in December of last year, resolutions were passed deploring the proposal by the Commission staff that the Commission now, for the first time, attempt to exercise jurisdiction over rural electric cooperative borrowers. We believe that this would clearly violate the Federal Power Act and gravely impair the successful administration of the Rural Electrification Act of 1936 by the REA Administrator. A resolution also was passed condemning the action of the Commission staff in commencing proceedings which question the right of power companies to sell electricity to cooperatives at rates which will enable the cooperatives to carry out their mandate from Congress to electrify the rural parts of the Nation on an area-coverage basis at rates the rural consumers can afford to pay, if such wholesale rates are lower than rates to other wholesale customers. Our membership. also, has expressed its strong disapproval of the decision of the majority of the Commission to grant a license to a private power company to construct the High Mountain Sheep project on the Snake River in what seems to them to be a clear-cut violation of the "preference provision" of the Federal Power Act.

Although we are greatly concerned over the foregoing staff or Commission actions, we recognize that on the whole the present Commission has made vast strides forward in revitalizing its electric regulatory activities and we believe this is good news for electric consumers. We feel that the problems mentioned above can be corrected by strong guidelines for the staff being laid down by the Commission, and by the proper directives being given by the appropriate congressional committees to the Commission. None of such problems would be solved by not making sufficient funds available.

We are convinced that this committee can make a genuine contribution to the welfare of the electric and gas consumers of the Nation by recommending the requested appropriation.

Senator MAGNUSON. We are in recess until 9 a.m., Wednesday morning, with FAA.

(Whereupon, at 11 a.m.. the committee recessed, to reconvene Wednesday June 10, 1964, at 9 a.m.)

INDEPENDENT OFFICES APPROPRIATIONS FOR 1965

WEDNESDAY, JUNE 10, 1964

U.S. SENATE,

SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS,

Washington, D.C. The subcommittee met, pursuant to recess, at 9 a.m., in room S-128, U.S. Capitol, Hon. Warren G. Magnuson (chairman) presiding. Present: Senators Magnuson, Monroney, Allott, and Saltonstall.

FEDERAL AVIATION AGENCY

STATEMENT OF NAJEEB E. HALABY, ADMINISTRATOR, FEDERAL AVIATION AGENCY; ACCOMPANIED BY ALAN L. DEAN, ASSOCIATE ADMINISTRATOR FOR ADMINISTRATION; ROBERT J. SHANK, ASSOCIATE ADMINISTRATOR FOR DEVELOPMENT; DAVID D. THOMAS, ASSOCIATE ADMINISTRATOR FOR PROGRAMS; H. B. ALEXANDER, DIRECTOR OF BUDGET; JOSEPH D. BLATT, DIRECTOR, SYSTEMS RESEARCH AND DEVELOPMENT SERVICE; RICHARD B. LENG, DIRECTOR, INSTALLATION AND MATERIEL SERVICE; GEORGE S. MOORE, DIRECTOR, FLIGHT STANDARDS SERVICE; NATHANIEL H. GOODRICH, GENERAL COUNSEL; AND D. M. MUNSON, DEPUTY DIRECTOR OF BUDGET

1965 BUDGET REQUEST

Senator MAGNUSON. The Federal Aviation Agency is the only Agency other than the space agency that has not appeared before our subcommittee for their general presentation.

The space agency has not, for a very good reason: The authorization bill has not passed. It is on the Senate Calendar and will probably be taken up shortly.

I have asked Mr. Halaby and his staff to come in today and discuss in a general way the appropriations of the budget for the FAA for 1965.

(The justification statement referred to follows:)

GENERAL STATEMENT

Aeronautical services are provided by the Federal Aviation Agency under authority of several statutes, the more important of which are identified below:

1. The Federal Aviation Act of 1958 created the Federal Aviation Agency and provides for the regulation and promotion of civil aviation so as to foster its development and safety and to assure the safe and efficient use of the airspace by both civil and military aircraft.

2. Public Law 674, 76th Congress, authorizes the operation of the Washington National Airport, and Public Law 762, 81st Congress, authorizes the construction and operation of Dulles International Airport.

3. Public Law 377, 79th Congress, Public Law 211, 84th Congress, Public Law 86-72, and Public Law 87-255 provide for Federal aid in the development of public airports.

4. The International Aviation Facilities Act enacted to encourage the development of an international air transportation system adapted to the needs of the foreign commerce of the United States, of the postal service, and of the national defense, and for other purposes.

The declaration of policy for the Administrator, which is section 103 of the Federal Aviation Act, summarizes effectively the objectives we wish to attain. "SEC. 103. In the exercise and performance of his powers and duties under this Act, the Administrator shall consider the following, among other things, as being in the public interest:

"(a) The regulation of air commerce in such manner as to best promote its development and safety and fulfill the requirements of national defense; "(b) The promotion, encouragement, and development of civil aeronautics; "(c) The control of the use of the navigable air space of the United States and the regulation of both civil and military operations in such air space in the interest of the safety and efficiency of both;

"(d) The consolidation of research and development with respect to air navigation facilities, as well as the installation and operation thereof;

"(e) The development and operation of a common system of air traffic control and navigation for both military and civil aircraft.”

In performing services essential to present-day aviation and its growth, the Agency operates and maintains a national network of air navigation aids and controls civil and military air traffic 24 hours a day; regulates the use of navigable space; certifies as to the competency of airmen and airworthiness of aircraft; procures and installs improved aids to air navigation; conducts research and development to improve and modernize aviation facilities and procedures; administers a Federal grant-in-aid program for a national system of airports; promotes and regulates the mental and physical fitness of airmen; conducts aviation medical research; constructs and operates airports in the National Capital area and certain other special locations; and carries on other related activities designed to promote air commerce and safe and efficient aviation.

The enactment of the Federal Aviation Act and the creation of the Federal Aviation Agency have provided the framework and authority needed to deal effectively with the needs of aviation. The effectiveness of these measures are, however, dependent upon the continued provision of the resources required to keep pace with an ever more demanding job. Beginning in 1957, the level of appropriation for functions now carried on by the Federal Aviation Agency has been increased to provide facilities and services at a rate which has permitted substantial and encouraging progress in improving and augmenting present air navigation and traffic control systems and in rendering services essential for safety and efficiency in air operations.

Further, the role of the Federal Government with respect to research and development has been recognized and implemented with appropriations support. This concerted effort must be continued and its success is also heavily dependent on the availability of adequate resources.

Aviation is one of the major industries of the United States. The workload of the Federal Aviation Agency as generated by this industry is not controllable by the Agency but in large measure results from the requirements associated with air defense and with the growth of civil aviation. Increasing density of air traffic and the increasing use of high performance aircraft pose serions problems, and we must be continuously increasing our capabilities to handle the workload. All Agency workload indicators continue to reflect increases in 1965 over 1963. Some of the more significant of these are: an increase of 11 percent in aircraft operations at FAA towers; a 6 percent increase in IFR aircraft handled through air route traffic control centers. Another indicator of aviation activity is that of fuel consumed, as this is a reflection on the numbers of aircraft in the system as well as the size and complexity of the aircraft. This indicator reflects a 15-percent growth in 1965 over 1963. It is also expected that the public will fly 53 billion passenger-miles in 1965, which is an increase of 15 percent over 1963.

The 1965 request contains estimates for all Agency appropriations except those for civil supersonic aircraft development and for new obligational authority for Federal aid to airports. No additional funding is being requested for the supersonic program until completion and evaluation of the design phase of the program. For the grant-in-aid program, the 1965 request contains $7 million for funds to liquidate obligations incurred under contract authorization previously approved. However, no funds have been requested at this time for new obligational authority for the 1965 program. At present, enabling legislation is before the Congress which will authorize a continuation of the Federal aid to airports program for the years 1965 through 1967. As soon as this legislation is enacted, a request will be transmitted to the Congress for additional funding for the years 1965 and 1966. This would again get the Agency on a 2-year advance funding basis.

The budget presented herein is intended to meet the ever continuing demands of the aviation industry and of the military for air traffic control and navigation services. However, through the improvement of manpower utilization the Agency hopes to effect economies which will reduce to a minimum the requirements for the proper execution of responsibilities placed upon this Agency. For those appropriations for which funds have been requested in both 1964 and 1965, the Agency is requesting $16.5 million less in 1965 than was appropriated in 1964. In addition, the estimate contains a request for over 910 fewer positions than will be required in fiscal year 1964.

These estimates, which have been prepared to reflect the firm requirements for meeting the Agency's statutory responsibilities are influenced by the following principal factors:

1. Commissioning certain new facilities and services authorized for establishment under prior years' "Facilities and equipment" appropriations.

2. Savings in manpower and cost associated with the Washington staffing reduction and with planned improvements in employee productivity. 3. Implementation of the revised pay scale under phase II of the Federal Salary Reform Act of 1962.

4. Continuing effort in research, development, and testing to improve the equipments and techniques being utilized in assuring safety in aviation.

5. Establishing additional facilities in phase with the Federal Aviation Agency long-range program.

In the discharging of Agency responsibility, the Federal Aviation Agency must be responsible to the needs of the aviation activity of the Nation. The following data reflects some of the activity which has an impact upon the Agency workload and which has had an impact upon Agency estimates contained in this submission.

Recent trends in representative aviation activities, fiscal years 1959–65

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Senator MAGNUSON. The House has passed the Independent Offices appropriation bill and there are some items in it which obviously we will want to discuss with the FAA, probably when we bring all the other agencies back to discuss the action taken by the House. We are glad to have you here.

APPROPRIATIONS, ESTIMATES, AND RECOMMENDATIONS

Senator MAGNUSON. For the purpose of the record, the 1964 appropriation was $758,341,500. The budget estimates for 1965 were $831,850,000, which includes the supplementals.

The House bill recommended $775,249,000, which is a $16 millionplus over the 1964 appropriations, but $56 million under the 1965 budget estimates. That has been modified to the tune of $55,150,000. Is that correct?

Mr. ALEXANDER. Yes.

Senator MAGNUSON. Mr. Halaby has a statement and we will be glad to hear from you.

Mr. HALABY. Thank you, Mr. Chairman. May I hit the highlights?

Senator MAGNUSON. We will put the statement in the record in full and then you may highlight it, but I wish you would read the first two pages, because they are quite important.

STATEMENT OF NAJEEB E. HALABY, ADMINISTRATOR, FEDERAL AVIATION AGENCY

Mr. HALABY. Yes, sir; I will read those and then select points from the rest of it and then, if I could, show a chart which I think summarizes the funding and employment picture.

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