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Commentary

U.S. Airport Security

Subsection of Annual Privatization Report 2013: Air Transportation

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Introduction

There have been two major developments in U.S. airport security in 2012. One concerns the future of the program under which airports are allowed to outsource passenger and baggage screening to firms certified by the Transportation Security Administration (TSA). The other concerns the shift by the TSA toward a more risk-based approach to aviation security, with the launch of its PreCheck trusted traveler program.

Outsourced Passenger and Baggage Screening

When Congress enacted the Aviation & Transportation Security Act (ATSA) in November 2001, it reached a compromise between Senate and House approaches. The Senate bill called for complete “federalization” of airport screening, in which a new federal agency (the TSA) would take over passenger and baggage screening at all commercial airports, using a new federal workforce of well-trained people. The House bill called for replacing the former system (in which the FAA required airlines to hire screening firms for each airport concourse) with a new system in which the airports would be responsible for screening, which they would do under federal supervision, either with a workforce of their own (meeting federal training and performance standards) or via security contractors that met federal training and performance standards. The final bill was mostly the Senate’s approach, but permitted five airports to opt out by using TSA-certified security firms, with all other airports to be given this option after 2004.

All five original opt-out airports (including San Francisco and Kansas City) have been pleased with contract screening and have shown no inclination to shift to TSA screening. Several studies have shown that contract screening is more effective and less costly than TSA-provided screening. Until 2012, the only airports that had taken advantage of the post-2004 opt-out provision were small airports-either ones just beginning to offer scheduled air service at the level that requires airport screening or a few where TSA had difficulty matching its screener workforce levels to large seasonal variations in passenger traffic.

In late 2010, interest in outsourced screening rose considerably, due to concerns over TSA’s introduction of body scanners and pat-downs for primary (all-passengers) screening. But in January 2011, new TSA Administrator John Pistole rejected all pending applications for the Screening Partnership Program (SPP) and announced that no more airports could participate (other than the original five plus the dozen other small ones already in the program). In response, the Senate adopted an amendment to its pending FAA reauthorization bill to require TSA to accept applications and process them expeditiously, giving Congress the reason for any rejections. Rep. John Mica (R, FL) included similar provisions in the House bill, but 2011 ended without any action on FAA reauthorization. But when the FAA bill was finally enacted in February 2012, it included these provisions. And TSA announced that it would resume accepting applications. By fall 2012, TSA had approved preliminary applications from a number of airports in Montana, from Orlando-Sanford in Florida, and from Sacramento International in California. The latter is the largest by far of airports switching from TSA screening to outsourced screening under SPP.

In July 2012 the House Homeland Security Committee’s subcommittee on transportation security held a hearing on airport screening. In his testimony (available here), Reason Foundation’s Robert Poole called for further policy changes in the program. In the near term, he recommended that screening outsourcing shift to a more decentralized model, in which the airport itself would issue the request for proposal (RFP) for such screening and would be allowed to select the proposal it judged most cost-effective from among those submitted by TSA-certified screening companies. Currently, TSA first decides if it will permit the airport to opt out and, if so, TSA itself selects the contract firm and assigns it to the airport. In addition, the airport, not TSA, should manage the contract, under TSA’s overall aviation security oversight of the airport. Longer-term, Poole recommended that the TSA enabling legislation be changed to devolve the entire screening function to airports (under TSA regulatory oversight), in order to remove TSA’s built-in conflict of interest as both the principal provider of airport screening and the aviation security regulator. Subcommittee chair Rep. Mike Rogers (R, AL) has expressed interest in both ideas.

TSA’s PreCheck and other Risk-Based Screening

In early 2011, aviation industry organizations began pushing aggressively for TSA to create a risk-based Trusted Traveler program, under which certain air travelers could be pre-vetted as low-risk and receive expedited screening at the airport. This was a principal recommendation of the Blue Ribbon Panel for Aviation Security convened by the U.S. Travel Association. It was also championed on a global basis by the International Air Transport Association representing nearly all the world’s airports, and by the U.S. based Business Travel Coalition.

In response, TSA Administrator John Pistole began endorsing risk-based screening and a Trusted Traveler approach in speeches and interviews. By summer 2011, TSA announced it would be launching a pilot program before the end of the year, initially aimed at premium-level frequent flyers of selected airlines. Launched in fall 2011, the program is named PreCheck, and proved to be highly attractive to frequent flyers. TSA reviews the travel history of premium frequent flyers, and those accepted use a special checkpoint lane and expedited screening (no need to remove coat or shoes, or to remove liquids or laptop from carry-on bags). During 2012 TSA has continued to expand PreCheck, reaching its initial goal of having it in place for at least some airlines at 35 airports by the end of 2012. It also implemented expedited screening for airline crewmembers under its new CrewPass program, open initially only to cockpit crew but being expanded to cabin crew as well. PreCheck offers only a rudimentary check of applicants’ frequent flyer history, rather than the kind of serious FBI criminal history background check TSA requires of airport employees who have access to secure areas.

Two private firms, Alclear with its revived CLEAR program and Priva Technologies with its FlexPass, began offering revived Registered Traveler programs to airports in mid-2011. In exchange for paying an annual membership fee, air travelers receive a biometric ID card and can bypass checkpoint waiting lines, but must still go through regular screening. As of the end of 2012, CLEAR was available at five airports and FlexPass at two. But since neither program is allowed to offer a background check and therefore offer expedited screening, the value gained by paying an annual fee may not attract a very large membership.

In October 2012, Administrator Pistole told Bloomberg BusinessWeek that the agency plans to test using a private vendor to expand PreCheck beyond members of airline premium frequent flyer programs. If TSA is willing to include a real background check and biometric ID card in the expanded program, it will have the makings of a serious Trusted Traveler program.

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Robert Poole is director of transportation policy and Searle Freedom Trust Transportation Fellow at Reason Foundation. Poole, an MIT-trained engineer, has advised the Ronald Reagan, the George H.W. Bush, the Clinton, and the George W. Bush administrations.

Surface Transportation

In the field of surface transportation, Poole has advised the Federal Highway Administration, the Federal Transit Administration, the White House Office of Policy Development, National Economic Council, Government Accountability Office, and state DOTs in numerous states.

Poole's 1988 policy paper proposing privately financed toll lanes to relieve congestion directly inspired California's landmark private tollway law (AB 680), which authorized four pilot toll projects including the successful 91 Express Lanes in Orange County. More than 20 other states and the federal government have since enacted similar public-private partnership legislation. In 1993, Poole oversaw a study that coined the term HOT (high-occupancy toll) Lanes, a term which has become widely accepted since.

California Gov. Pete Wilson appointed Poole to the California's Commission on Transportation Investment and he also served on the Caltrans Privatization Advisory Steering Committee, where he helped oversee the implementation of AB 680.

From 2003 to 2005, he was a member of the Transportation Research Board's special committee on the long-term viability of the fuel tax for highway finance. In 2008 he served as a member of the Texas Study Committee on Private Participation in Toll Roads, appointed by Gov. Rick Perry. In 2009, he was a member of an Expert Review Panel for Washington State DOT, advising on a $1.5 billion toll mega-project. In 2010, he was a member of the transportation transition team for Florida's Governor-elect Rick Scott. He is a member of two TRB standing committees: Congestion Pricing and Managed Lanes.

Aviation

Poole is a member of the Government Accountability Office's National Aviation Studies Advisory Panel and he has testified before the House and Senate's aviation subcommittees on numerous occasions. Following the terrorist attacks of Sept. 11, 2001, Poole consulted the White House Domestic Policy Council and the leadership of the House Transportation & Infrastructure Committee.

He has also advised the Federal Aviation Administration, Office of the Secretary of Transportation, White House Office of Policy Development, National Performance Review, National Economic Council, and the National Civil Aviation Review Commission on aviation issues. Poole is a member of the Critical Infrastructure Council of the Los Angeles Economic Development Corporation and of the Air Traffic Control Association.

Poole was among the first to propose the commercialization of the U.S. air traffic control system, and his work in this field has helped shape proposals for a U.S. air traffic control corporation. A version of his corporation concept was implemented in Canada in 1996 and was more recently endorsed by several former top FAA administrators.

Poole's studies also launched a national debate on airport privatization in the United States. He advised both the FAA and local officials during the 1989-90 controversy over the proposed privatization of Albany (NY) Airport. His policy research on this issue helped inspire Congress' 1996 enactment of the Airport Privatization Pilot Program and the privatization of Indianapolis' airport management under Mayor Steve Goldsmith.

General Background

Robert Poole co-founded the Reason Foundation with Manny Klausner and Tibor Machan in 1978, and served as its president and CEO from then until the end of 2000. He was a member of the Bush-Cheney transition team in 2000. Over the years, he has advised the Reagan, George H.W. Bush, Clinton, and George W. Bush administrations on privatization and transportation policy.

Poole is credited as the first person to use the term "privatization" to refer to the contracting-out of public services and is the author of the first-ever book on privatization, Cutting Back City Hall, published by Universe Books in 1980. He is also editor of the books Instead of Regulation: Alternatives to Federal Regulatory Agencies (Lexington Books, 1981), Defending a Free Society (Lexington Books, 1984), and Unnatural Monopolies (Lexington Books, 1985). He also co-edited the book Free Minds & Free Markets: 25 Years of Reason (Pacific Research Institute, 1993).

Poole has written hundreds of articles, papers, and policy studies on privatization and transportation issues. His popular writings have appeared in national newspapers, including The New York Times, The Wall Street Journal, USA Today, Forbes, and numerous other publications. He has also been a guest on network television programs such as Good Morning America, NBC's Nightly News, ABC's World News Tonight, and the CBS Evening News. Poole writes a monthly column on transportation issues for Public Works Financing.

Poole earned his B.S. and M.S. in mechanical engineering at Massachusetts Institute of Technology (MIT) and did graduate work in operations research at New York University.