ADD-ONS IN DEFENSE BILL ILL-SERVE TROOPS & AMERICA

By Diane M. Grassi

The U.S. House of Representatives wrapped up 2005 by adopting a $453 billion budget for the 2006 Defense Appropriations Act. It is now left up to the U.S. Senate to decide which amendments to include or not include in its authorization of funding, intended primarily for the U.S. military in order for them to pay troops, continue operations in Iraq through March 2006, and for the military to maintain U.S. national security.

But it is hardly clear to Americans why there are all kinds of legal machinations going on in the last minutes of 2005 in the Senate, on a defense bill largely decided prior to Labor Day 2005. And the debate is not about the appropriations for our military but rather about items which have little to do with the armed services.

It has long been a practice on Capitol Hill to tack on amendments for funding legislation or special projects to other funding or budget bills if they do not stand a chance of being passed as stand-alone legislation. Doing so with “must-have” legislation has been roundly criticized, allegedly forcing members of Congress to approve measures they would ordinarily reject. However, there is a criterion regarding the qualification for such amendments by virtue of Senate Rules.

The application of the Rules themselves has now been piled on top of the bill’s negotiations. Specifically, Senate Rule 28 is at issue, which states that once an Appropriations Conference report has been finalized in negotiations, additional projects may not be attached to such a measure. In addition, that item must be related to the substance of the budget bill being passed.

In this instance, Senator Ted Stevens (R-AK), Chairman of the Senates’ Defense Appropriations Subcommittee, has attached the controversial provision to allow oil drilling in the Artic National Wildlife Refuge (ANWR), stating that “Oil is related to national security. The largest consumer of oil in the U.S. is the Department of Defense.” According to many Democrats and some Republicans as well, Senator Stevens’ attempt at “back-door” legislation is disingenuous and holds the needs of American troops in abeyance.

The vote on inclusion of ANWR in the defense bill is to take place on December 21, 2005. The Democrats have threatened a filibuster in order to ultimately block floor votes if there are not enough votes in order strip ANWR from the defense spending legislation. But Senate Rules cannot simply be amended to the liking of one political party or another. It does, however, sidetrack the issue at hand which is to provide necessary funding for the military, which was to have passed by October 1, 2005. Military paychecks have been guaranteed through December 31, 2005, only due to a stop-gap measure passed in mid-December by the Congress.

Simply because the calendar is running out does not take lawmakers off the hook from rationally voting on legislation. The ANWR issue has been a contentious once ever since the 19 million acres were purchased by the U.S. government in 1980. Environmentalists as well as oil companies are the two largest groups with opposing arguments, but more importantly is potentially how much ANWR will alleviate American dependence on foreign oil. It is estimated that the 1.5 million acres reserved for drilling could ultimately produce 10 billion barrels of oil with production of 900,000 barrels a day by the year 2025; hardly a dent in the needed supply for a country which devours 20.2 million barrels of oil per day in the year 2005.

And while ANWR is grabbing the headlines, the other attachments to defense spending, which the House has already ratified, includes more aid for the rebuilding of the Gulf Coast due to Hurricane Katrina and other storms to the tune of $29 billion, $3.9 billion for Avian Flu preparedness with a provision with liability protections for pharmaceutical manufacturers and $2 billion for low-income heating and energy assistance (LIHEAP) due to heating costs for the winter expected to escalate in price by approximately 30%. And those are only the main items which have been reported, as the bill has been said to be over 1,000 pages.

How many of the additional attachments to the Defense Appropriations Act are indeed relative to defense spending, we may never know, nor will many of our lawmakers, who have but skimmed through the bill. The 11th hour is not the time, it could be argued, to start familiarizing oneself with issues on such important legislation. However, what prevented them from doing so, say, on their recesses before Labor Day or the two weeks recess for Thanksgiving?

The good news is that the troops will see a 3.1% rise in salary, identical to the one which Congress passed for itself. Still not yet clear is how far health and pay benefits will be extended for reservists. The breakdown presently passed by the House is $97 billion for military personnel, $123.6 billion for operation and maintenance, $76.5 billion for procurement, $72.1 billion for research and development, test and evaluation, $2.1 billion for revolving and management funds, $22.7 billion for other Department of Defense programs and $50 billion for emergency wartime appropriations.

With the recent acceptance by the Congress of the 2005 Base Closure and Realignment Commission report and with the 2006 Defense Quadrennial Review due in February 2006 from the Pentagon, it has yet to be determined how much they will influence allocation of the funds from this legislation over the coming year. Still remaining under scrutiny are procurement contracts and how much leeway contractors will be given in offshoring military parts to India and China.

Whichever way the ANWR provision is decided upon, however, perhaps it has opened the eyes of the voting public as to how far U.S. lawmakers will go in putting their politics above those fighting a war on foreign soil and their lack of rationale in doing so. This latest defense bill grandstanding is only but one recent example of key legislation being held up not necessarily for the greater good of the U.S., but for individual posturing in an effort to score points within the two political parties.

While no one on Capitol Hill has an axe to grind with providing funding for our military, the funding for troops in the field for necessary equipment replenishment, body and Humvee armor as well as equipment upgrades was promised months and months ago. The behavior of the Congress all year long has not passed muster on many issues regarding the proper funding of our troops. For lawmakers now to use the last days of 2005 to exact attention upon themselves is distasteful at best. They should rather be focusing on appropriations oversight for our troops to ensure that the allocated billions will be properly spent, and that would perhaps curry them more favor from the American people as well.

U.S. Jobs in IT Development & Finance Soley Reserved for India

By Diane M. Grassi

General Motors Corp. announced in late November 2005 that it will close 9 of its United States auto manufacturing plants as well as three assembly-related plants which includes one location in Canada. Ford Motor Co. followed suit in early December 2005 announcing it is considering the shutdown of up to 8 of its U.S. manufacturing plants, including engine and assembly operations, with one in Mexico. Americans are well familiar with the downsizing, outsourcing and offshoring of the U.S. manufacturing base which has seen 2/3 of its jobs lost in the past 20 years, having been traded in for third world cheap labor. And while white-collar workers have hardly been immune from offshoring practices infiltrating boardrooms, indication this week is that the tide has changed.

Both the Intel Corp., the world’s largest computer chip manufacturer, as well as J.P. Morgan Chase & Co., one of the world’s largest financial institutions and 2nd largest in the U.S., are investing in creating new jobs in India over the next few years rather than in the U.S. Different in prior offshoring scenarios, however, is that back-office jobs such as investment banking, software engineering and research and development, previously occupied by American workers, will now originate from India as well.

J.P. Morgan plans to locate 1/3 of its investment banking and support staff in Bangalore, India by the end of 2007. It will double the amount of its employees by hiring 4,500 graduates over the next two years. 3,000 of the new hires will work in investment banking with 1,500 providing support in its retail and commercial banking operations. There are presently 4,500 employees in front-office staff positions in Mumbai, India.

With only 200 on staff in India just two years ago, in order to achieve their latest goal, J.P. Morgan will hire between 300-400 graduates a month in order to have 9,000 total positions in front and back-office positions by 2008, which includes complex derivatives settlements and structured finance transactions. The remaining approximately 4,000 – 4,500 employees J.P. Morgan employs will be divided between Bournemouth, England and New York, NY, although the ratio between both countries was not disclosed.

Similarly, Intel will invest $1.1 billion in India over the next 5 years, with $800 million dedicated specifically for research and development operations and other projects including chip design, also in Bangalore, according to Chairman Craig Barrett. Although Intel will also explore expanding its manufacturing prospects in India, its present investment will largely be for more complex high-value work as opposed to just technical support and call-center jobs, which most IT firms offshore today.

Other firms following this latest trend are Cisco Systems, the world’s largest maker of internet equipment, which announced in October 2005 that it would invest $1.1 billion in India, tripling its work force to more than 4,000 from 1,400 in the next three years. It too will have research and development located in Bangalore. And it is likely that more of the banking industry will soon follow J.P. Morgan’s lead such as Goldman Sachs & Co. which may double its staff to 1,500 in Bangalore.

Microsoft Chairman Bill Gates is expected to invest $400 million in Hyderabad, India where he plans to hire several hundred workers. Gates has been outspoken, with his statement in April 2005, citing that there were not enough U.S. college students majoring in computer science, and thus wants to expand the H1B Visa program, allowing more foreign workers to come to the U.S. But critics believe that Gates and other industry executives are not being honest in their assessments, to wit, the banking industry’s India strategy which is hiring finance graduates and not computer science graduates in expanse of their industry.

In fact, consultants such as Stefan Spohr of AT Kearney estimate that investment banks could raise their staff levels in India to as much as 20% in the next few years. Since salaries in India are 70-80% lower than in the U.S., with total costs about 40% lower than in the U.S., the trend of offshoring will no longer exist. Rather, jobs will now originate from India and totally bypass the U.S.

Disputing the fact that there are not enough quality candidates, for example, in the computing engineering field, is the change in the way in which U.S. engineers are hired. Candidates are not only competing with their peers but also with the fear that they will be replaced by either imported foreign workers or offshore workers, even after they are hired.

Companies are directly contributing to the supposed engineering shortage themselves by requiring that an applicant meet every item on a detailed list of qualifications. Transfer of like-skills is a long lost concept. With approximately 200 responses for every job listing, companies have the luxury to hold out until they get the perfect candidate, as job cuts in technology positions are up 20% in the past year, according to Challenger, Challenger, Gray & Christmas. The unemployment rate for computer programmers and engineers is higher than the national average which does not reflect those who remain unemployed in Silicon Valley as they no longer register for unemployment benefits, nor those who were forced to move on to other careers.

According to Veronique Weill, head of operations at J.P. Morgan’s investment banking division, “The quality of the people we hire is extraordinary and their level of loyalty to the company unbeatable,” when referring to the hiring of employees in India. Funny, but that’s what used to be said about American workers. Perhaps the American worker’s biggest error was requiring a decent wage for quality work done. And others would argue that maybe it was their expecting U.S. companies would prefer them over foreign labor. Tragically, greed, under the guise of a global economy was the error, committed not by U.S. workers but by U.S. CEO’s, and condoned by the U.S. government.

AIR TRAFFIC CONTROLLERS-FAA TALKS DISPUTE FUTURE AIRSPACE SAFETY

By Diane M. Grassi

In August 1981, 11,500 air traffic controllers who belonged to the Professional Air Traffic Controllers Organization, known as PATCO, were permanently fired by President Ronald Reagan, two days after their strike began, due to their violation of federal law. The president felt that the union did not seriously consider the ‘no-strike’ provision of their contract and had no other choice, in order to avoid a disastrous disruption in United States airspace.

PATCO workers were then replaced with non-unionized employees. Further to the firing, President Reagan through an Executive Order in 1982, prevented any of the fired air traffic controllers from being rehired in the future by the Federal Aviation Agency (FAA), which oversees U.S. air traffic control. Over the next 3-4 year period new controllers were hired and trained in order to replace those fired, provided with supplementation by the U.S. military, in order to keep planes in the air. In 1993, also by Executive Order, President Bill Clinton rescinded Reagan’s Order, allowing previously fired PATCO workers to be hired again by the FAA, which presently includes several hundred of the previously dismissed.

Now, nearly 25 years later, the newly named air traffic controllers union, National Air Traffic Controllers Association (NATCA), is in prolonged contract negotiations once again with the FAA, which began July 13, 2005. The present contract, which expired in 2003 was extended until September 30, 2005, with salaries frozen and benefits continued until new terms were met. As of September 30, 2005, the contract has expired but continues under an “evergreen clause,” allowing for the original contract to remain in effect as long as talks continue. Similarly to the negotiations which led to the 1981 strike are the issues of increased salaries and reduced working hours. But more differences than similarities exist in the present talks.

Since the last agreement was negotiated in 1998, NATCA members are working longer hours and have more security responsibilities in the wake of September 11, 2001. In addition, after the initial tailing off of air travel at the end of 2001 and the beginning of 2002, there are now more flights in the air at any one time in the history of aviation travel, but with fewer controllers watching over more airplanes in the U.S., which has the world’s busiest airspace. However, in the last two years, the FAA has lost 1,000 controllers.

But at the crux of the problem is that many of the controllers today are those who were hired in the early 1980’s and are set for retirement either immediately or in the near future. There is a federal mandate which requires all controllers to retire at age 56 whether or not there are employees to replace them. The FAA admits that 2,580 controllers are set to retire between 2005 and 2007 while only hiring an additional 13 in 2004. Additionally, there are not enough replacements in waiting in order to fill the quota. Instead of the originally promised 1,248 hires for Fiscal Year 2006, the FAA will now only hire 595 and phase in the remaining 654, by replacing one retiree at a time.

With 9,000 of its 14,500 current number of air traffic controllers having been hired in the early 1980’s, the FAA has dragged its heels on implementing a replenishment system known about for years. In a Government Accountability Office report issued in June 2002, it stated that “The FAA has not done enough to plan for the impending staffing crisis and needs to do so as soon as possible. It has not developed such a comprehensive workforce strategy to address all of the challenges it faces in responding to its impending need for thousands of new air traffic controllers, thus increasing the risk that the FAA will not have enough qualified controllers when necessary to meet air traffic demands.” Sadly, the FAA took two more years to acknowledge their shortcomings regarding staffing needs, publishing a similar report of their own in 2004, but has recently promised to add 12,500 controllers over the next ten years.

The FAA is an agency under the jurisdiction of the Department of Transportation (DOT), whose central responsibility is to ensure the safe and efficient air travel within the U.S. airspace system. According to the FAA administrator’s fact book for March 2005, in 2004 air traffic in the national airspace system included over 46 million flights and 647 million travelers. That translates into as many as 7,000 aircraft, including commercial and military, all flying at any one time. Given those numbers, the number of incidents including accidents and fatalities are very few, and both figure into the arguments of both negotiating sides.

According to NATCA the dependability of the system is crucial to the number of workers in addition to restricting the amount of overtime necessary to keep the air traffic control towers, Terminal Radar Approach Control facilities, Air Route Traffic Control Centers and the Air Traffic Control System Command Center all functioning smoothly. And by virtue of the success of the system, the FAA says the needs are not as dire as depicted by the union.

Yet, aviation safety investigators for the National Transportation Safety Board (NTSB) found as of September 30, 2005, 324 incursions, or near misses, involving various types of aircraft including three near misses of commercial jet liners in the past six months in Boston, New York and Las Vegas. The most recent incident involved US Airways and Comair flights on November 9, 2005 in which the US Airways jet aborted its landing at the last possible second when approaching Ft. Lauderdale’s airport, missing the Comair jet by a mere 100 feet.

A new software program for runway surveillance has been pressed for by the NTSB for all major airports for several years. Presently, nearly all major airports use the Airport Movement Area Safety System (AMASS) which routinely fails or has limitations during periods of precipitation. The Airport Surface Detection Equipment-X system uses additional sensors to complement radar detection, and compensates for deficiencies in radar-only surface surveillance systems as is AMASS. In addition, ASDE-X is less sensitive to precipitation. However, missing from both systems is a direct warning system, meaning it requires the information be dispatched to air traffic controllers to then be relayed to flight crews on the runway. Thus, a matter of a few seconds could be crucial in matters of near misses when planes are taking off and landing within seconds of each other. Nevertheless, the equipping of the ASDE-X systems exists at only 16 major airports with only additional select airports to be provided with the ASDE-X system by 2011, according to the FAA.

But with labor costs accounting for 80% of the FAA’s $8.2 billion operating budget, the FAA’s first priority is the freezing of controllers’ salaries with merit-based pay raises replacing cost-of-living increases. The current air traffic controllers’ average salary is $128,000, excluding benefits and overtime pay. NATCA has supposedly asked for a 5.6 % pay increase each year over the next five years, although the union has publicly disputed such figures.

Regardless of the figures, however, the union also is under the gun, much like unions in the private sector these days, with threats of outsourcing by the FAA, should negotiations fail. In addition, should both sides reach an impasse as declared by a federal mediator, which the FAA has already called for, the FAA gets closer to calling upon the Congress for a review of its proposal. Should the Congress fail to act on its proposal within 60 days thereafter, then the FAA could unilaterally impose its contract upon NATCA.

And while there are many concerns remaining regarding air travel security, such as the lack of inspection of cargo on commercial airliners, it is hard to argue that it is crucial for the FAA to implement a program that both maintains and improves airspace safety, which includes both personnel and infrastructure needs. Regardless of the negotiations and political posturing by both the FAA and NATCA it would serve them both well to stay on point during deliberations in order to remain on the key issues, keeping in mind the welfare of the flying public as well as the national security of the U.S., which essentially should be their main mission.