grants-in-aid for airports, $75 million, is included in this comparison. The comparisons exclude any provision for civil supersonic aircraft development in either year. Also included in 1965 is $7 million to complete the liquidation of contract authorization provided under the Federal Airport Act.

Agency position totals also show a decrease-46,192 positions for 1965 compared to the 47,111 authorized for 1964. Although the total budget reflects these decreases, provision is made for the operation and maintenance of new air traffic control and air navigation facilities authorized under facilities and equipment appropriations of prior years and provides additional funds for employee pay increases authorized for 6 months only in the fiscal year 1964.

OPERATIONS

The estimate includes $547.6 million for the operations appropriation which finances the cost of the continuing programs of the Agency as well as the program direction and administrative support costs of the Federal airport program, the facilities and equipment program, and the research and development program. The 1965 estimate is $19.6 million higher than the 1964 appropriation. This increase is partly attributable to the expenses associated with the expected commissioning of facilities now being constructed under prior years' appropriations for facilities and equipment and partly to meet the costs of the January 1, 1964, pay increases authorized by the Salary Reform Act of 1962, and other salary adjustments made pursuant to law. Included are the funds needed to finance within-grade promotions and certain changes in the classification of air traffic control positions, primarily to reflect the higher level of traffic being handled by our air traffic control centers and our busier towers.

The cost of operating and maintaining the new facilities added to the air traffic control and navigation system is substantial. Many new equipments and installations are being installed from funds appropriated in 1964 and prior fiscal years. As they are readied for use the Agency must provide for their operation and maintenance, for essential supplies, and for utilities. These unavoidable expenses must be met if new facilities are to be commissioned. We are making offsetting reductions to compensate for the continuing costs of the facilities added priod to 1965. While it is true that outmoded or unnecessary facilities are constantly being removed from the system, it is doubtful if the savings from decommissioned facilities will ever offset the cost of new additions to the system due to the increasing complexity of new equipments. Therefore, we are striving to minimize increasing costs by every economy measure we can devise consistent with the maintenance of an adequate level of safety and efficiency in aviation.

There is another operational consideration which has become more important in recent years-the question of Government liability as a result of accidents involving aircraft. As air traffic increases and the FAA exercises more control over aircraft and the airspace environment, the potential liability of the Government increases even in situations where the FAA is not at fault or where it does not have legal responsibility. At the yearend 1963, we had 371 suits pending against the Government for a total claimed liability of $153.6 million. Approximately 104 suits arose out of the 1960 New York midair collision, an accident wherein the CAB found the probable cause did not rest upon FAA but with the operation of the aircraft. Since we were last before your committee. 64 of these cases have been settled, with FAA's share of the liability in excess of $1.7 million. We estimate that by the time the remainder of the cases arising out of this one accident are settled, FAA's total liability will be in the order of $3.5 million. If we should reverse or delay further the modernization and improvements of our system, if we do not have the right people with the right skill and spirit in the right place at the right time working with modern equipment, our liability in such cases can obviously be enormous.

FACILITIES AND EQUIPMENT

We are requesting $75 million for the facilities and equipment appropriation, which is $25.2 million less than the amount appropriated for fiscal year 1964. The bulk of this appropriation-$65.5 million-is for the procurement and installation of new equipment required for the improved utilization of the national airspace. The largest single item is $40 million for equipment that will electronically display the identification and altitude of aircraft on radarscopes used by traffic controllers. This is a major step in the installation of the equip ment called for by the Project Beacon report of 3 years ago. By the use of this

equipment we expect to improve significantly the effectiveness, safety, and reliability of the air traffic control system.

Another $7.5 million will finance the second stage of the modernization of the National Aviation Facilities Experimental Center. Last year the Congress approved $5 million to permit the Agency to initiate a program for the replacement of inadequate facilities constructed more than 20 years ago.

As I indicated earlier in my statement, we have been able to achieve a significant reduction in the level of this appropriation in 1965, first by a reevaluation of projects previously approved and, secondly, through completing the funding of certain major portions of the air traffic control and navigation system. Whether this lower level of appropriation will suffice in future years is doubtful, for the actual requirements in the years to come will depend heavily upon the progress made in the research and development aimed at the increased automation of the air traffic control system and other improvements. The $65.5 million requested for air navigation and traffic control equipment amounts to only about 5 percent of the value of assets in place in the National Airspace System, and this seems to me a most conservative level considering the rapid change in aviation technology.

RESEARCH AND DEVELOPMENT

The estimate includes $42 million for the research and development appropriation, an increase of $2 million over the amount appropriated for the fiscal year 1964. The Federal Aviation Agency must engage in research and development activities since aviation is a dynamic industry largely dependent upon advances in technology. FAA is responsible for the national air navigation and traffic control system and as such the Agency is charged with the efficient operation of this system and the assurance of safety in flight. We are obligated, therefore, to assure that our system keeps pace with the needs of our national defense, the aviation industry, and the traveling public. We must assure ourselves that the aircraft, the men who fly them, and the operators of the airspace system meet the standards set by the Congress, the Federal Aviation Act and regulations. Our research and development program is starting to produce hardware and procedures that are being implemented in our air traffic control and navigation system. One of the major Agency systems modernization programs to be initiated in fiscal year 1965 has been previously discussed under the facilities and equipment program. It is the result of a successful development program and will pave the way for the implementation of a more effective and efficient hardware system.

Future efforts will be devoted to developing equipment needed to permit more flexibility in the display of radar information, the automatic prediction of conflicts in flight paths, and the performance of other services designed to relieve the individual traffic controllers of manual computation and leave them more time to make the critical decisions which cannot be done by machines. It is our goal to have a fully operational and modernized air traffic control subsystem of the national airspace system in being by September 1966.

More effort will be directed to the development of equipment which will permit landings and takeoffs under near zero visibility conditions at major airports throughout the Nation. Other projects will be aimed at the development of lower cost landing aids for smaller airports and improvements in the accuracy of existing instrument landing system components. Success in these projects will not only significantly improve the reliability of aircraft schedules and eliminate many costly flight postponements, cancellations and reroutings due to weather, but will increase safety under all bad weather conditions. Our schedule indicates that our research and development work on the low-cost instrument landing system should be completed in fiscal year 1965. Both Government and the aviation industry will reap the benefits of this program in the near future. The estimates include $5 million for an aircraft safety program. This program will point the way to improved safety standards of aircraft construction and operation, as well as to new developments in vehicles and components. This program includes efforts in fire prevention, crash impact survival, improved noise criteria, and lightning protection. The $1.8 million for aviation medicine will finance exactly the same number of employees approved for the 1964 program and will support long-term projects begun in prior years.

The total research and development appropriation amounts to less than 6 percent of our budget estimate, and is less than 4 percent of the value of the capital plant operated by the FAA. We are convinced that the appropriation requested is the minimum research and development level required to keep the

airspace system and aviation safety abreast of the needs of an expanding industry. The level of effort appears reasonable in comparison with amounts expended by industrial ventures engaged in expanding technological fields.

GRANTS-IN-AID FOR AIRPORTS

The amended budget includes $75 million for grants for airport construction and improvements in 1965, and, in accordance with the forward funding principle established by the Congress in 1963, an equal amount for 1966 to be appropriated now. During the 2-year period covered by these appropriations, requests for aid by local sponsors are expected to exceed $300 million, or about twice the amount of Federal funds requested in this appropriation. We are also requesting $7 million to complete the liquidation of obligations incurred under the contract authority authorized for the grants-in-aid program through the 1962 fiscal year. The money will thus be used to pay bills which constitute legal obligations for the Government.

OPERATION AND MAINTENANCE, NATIONAL CAPITAL AIRPORTS

The estimate includes $3,631,000 for operation and maintenance, Washington National Airport; and $4,619,000 for operation and maintenance, Dulles International Airport. The estimate for Washington National Airport would provide for the operation of a new sewage pretreatment plant and an in-runway lighting installation on the major north/south runway. An additional 29 positions are included for Dulles International Airport, principally for maintenance and operation of new buildings and for services being conducted for the first time in fiscal year 1965. In addition, the completion of Dulles International Airport and its becoming fully operational require a shift in the allocation of costs of consolidated functions between the Washington National Airport and Dulles International Airport appropriations. A corresponding shift of funds is reflected in the estimates. These functions include overall airport direction, accounting, payroll, procurement, engineering and other services performed on a common basis for both airports in the interest of economy and efficiency.

The committee will recall that during our last hearing, it expressed concern as to the adequacy of taxi service at Washington National Airport. While contractual limitations prevented our unrestricted opening of the airport to independent taxi operators as recommended by the committee, we have implemented the committee's alternative suggestions calling for prominent signs advising the public of their privilege to utilize whatever transportation is readily available. In addition, we have prevailed upon our contractor, through his sidewalk dispatchers, to assist the public in hailing equipment operated by others. We are most grateful for the committee's suggestion, for since implementing this program public complaints relating to this service have been all but eliminated.

CONSTRUCTION, NATIONAL CAPITAL AIRPORTS

The budget provides $1,800,000 for the replacement of hangar No. 10 at Washington National Airport. The old hangar is designed in such a way that its usefulness in handling modern aircraft is limited, with the result that its earning capacity is sharply limited. The new hangar will be self-supporting over its useful life and will produce a net revenue to the Government. An additional $200,000 is being requested for financing improvements at Dulles International Airport of internal roads used for emergency vehicles, snow removal. police patrol, and similar purposes. Present unfinished roads need a hard, allweather surface for proper utilization.

CIVIL SUPERSONIC AIRCRAFT DEVELOPMENT

There is no item in the 1965 budget for this program. In view of the recent special hearing on the status of this program, we have no additional comments at this time.

SUMMARY

Last November 1, the FAA observed its fifth anniversary; 5 years after the Congress established the Agency at a time which might have become—had yet not acted so decisively-a full crisis in air transportation. There were fire "high boost" building years; expensive, sometimes contentious, but productive years. There was nearly a decade of technological foot dragging on moderniz

tion of the Nation's airways to make up for, while at the same time, trying to keep ahead of the jets, which were then beginning to streak the high altitudes. With the money and men you made available to us during this building period, we have very nearly completed the foundation-the centers, towers, long-range radars and navigation subsystems-the expensive base of the national airspace system. The men, and women, who came to us in great numbers in those years have matured in their technical skill, their management capacity and philosophy, their determination to use intelligently, and in the broadest public interest, the resources entrusted to them.

With the buildup period mostly behind us we were able in 1965 to stop the upward trend in total appropriations and manpower. The budget transmitted to you by the President reflected downward trends in both dollars and yearend employment from amounts approved by you in fiscal year 1964. We could see ways to accomplish this without disturbing the smooth functioning of the traffic control and navigation systems or downgrading of other safety programs. We need the resources requested in that budget to move into the next stage of development which will permit our meeting increased workload without additional people and perhaps in the future to further reduce our resources as the system becomes more nearly automated.

One final word about my budget philosophy. I have tried since becoming Administrator to recommend to the President and to present to the Congress estimates which sincerely reflect my best judgment as to what the Agency will need to do the job set forth in the Federal Aviation Act and other mandates. I do not believe in padding a budget or stuffing it with "cut insurance." I have taken this position out of respect for simple honesty and because I believe that the Congress will quickly detect the difference between a fat and a tightly constructed fiscal program.

This year as the result of the Agency's rapidly improving management systems we have been able to come before the Congress with a budget which calls for less positions and less money. It is a budget on which I personally, as well as the career men, have labored long and hard. I am supporting what is asked for because I know how hard it is going to be to meet our productivity improvement goals and to stay on schedule in modernizing the national airspace system-even if all that has been requested is approved.

I appeal to the committee to recognize what we in FAA have done by selfdenial and discipline to lay out a plan to cope with a growing aviation workload with reduced resources. I urge that the Congress show in its action on our request that an agency which puts its own fiscal house in order gets credit for its achievement and that the action on its appropriations will reflect this recognition.

I would be pleased to answer any questions which the members of the committee may have.

PROCEDURE IN LATER MEETINGS

Senator MAGNUSON. The chairman is glad to see that you are doing something about that taxi situation and we have discussed the supersonic business, the SST. It is the understanding now for the record that this will complete the formal presentation of all the agencies within the jurisdiction of the subcommittee with the exception of the Space Agency, for which moneys have not yet been authorized.

The FAA, all of them, will come back-all the agencies. Some of them may not need to, but surely the FAA-we have more things we want to discuss with them. So when we can do this will be subject a great deal to what happens on the floor in the next 2 hours and whether we are going to meet early or meet late-we will know that today or tomorrow. We will try to call back as many as we can, next week, if possible, but I don't see any chance for it until the middle of the week, right in there.

RESEARCH AND DEVELOPMENT FUND

Mr. HALABY. We will be ready, Mr. Chairman. We are just most anxious to justify our research and development fund. We just feel that we have to literally implore you for that amount. We think we can prove the progress, the tightening that has taken place, but it is just not the time to cut that down to $21 million.

RESTORATION OF HOUSE CUTS

Senator SALTONSTALL. Mr. Chairman, I was going to ask that question. If there is going to be a cut, if we are going to sustain any of the House cut, or in conference, the $25 million in facilities and equipment, you prefer to have it taken out of that rather than the research? cause you have $126 million of funds in the kitty now for that purpose. Is that correct?

Mr. HALABY. We just implore this committee to restore all of the cuts, because this is the tightest budget we have ever presented and we are projecting productivity that no other agency is achieving.

In the conference, the committee always has to work its judgment with the other side and at some point a choice always has to be made. Senator SALTONSTALL. Mr. Chairman, would the gentleman yield? Senator MAGNUSON. Yes, sir.

Senator SALTONSTALL. I have sat in this committee now for 18 years and this is the first time I have heard the use of the word "implore" to this committee. It puts it on a very high plane.

Mr. HALABY. I wanted to avoid the embarrassment of getting on my knees and begging you even though I will do so if necessary.

PERSONNEL REDUCTION

Senator MAGNUSON. I have sat on this committee for 18 years, too, and this is the first time an agency has come in with as much personnel reduction. I want to commend them.

Senator ALLOTT. May I make an off-the-record request?

Senator MAGNUSON. Yes.

(Discussion off the record.)

Senator MAGNUSON. We stand in recess.

DULLES AIRPORT OPERATIONS

Senator MONRONEY. Would you put in the record the comparability of last year's operation of Dulles and the present and put in the number of airlines serving it, too?

Mr. HALABY. Yes.