Private Role in Air Control, Housing, Education Urged

A special presidential commission on curbing government growth issued an ambitious package of proposals Friday calling for private business to take over most airport air traffic control operations and for citizens to be given education, housing and medical care vouchers for use in lieu of public schools, public housing or Medicare.

The report, the result of a $450,000 six-month study, corresponds with one of President Reagan’s longstanding priorities of “privatizing” many government activities.

Although the plan was drawn in the final months of Reagan’s presidency and faces stiff opposition from public employees’ unions, its author argued that it represents the opening of a debate that would be carried on in future years.

“This issue is not just a sporadic Reaganomics type of thing,” insisted David F. Linowes, chairman of the President’s Commission on Privatization.

In advocating that the government divorce itself as much as possible from a broad range of traditional responsibilities, Linowes said the talents of those in private industry can be tapped “by contracting out such things as prison management, air traffic control or even public housing management.”

Puts Profit Motive in Play

“It’s the competitive process in play again, for the profits,” said Linowes, a professor of political economy and public policy at the University of Illinois. He described the study as the first “independent, exhaustive, professional analysis” of the benefits of turning broad areas of government over to private industry to reduce costs and improve service.

The study drew sharp criticism from Al Bilik, president of the AFL-CIO’s public employee department, who accused the Administration of having a “going-out-of-business-sale mentality.”

The report “is further evidence that the Administration’s public policy agenda is limited to determining the cost of everything and the value of nothing,” Bilik said. “After seven years of bleeding public services by slashing their funding, the White House now attempts to paint those services as inadequate and inefficient.”

The report acknowledged that eliminating government functions would reduce the federal payroll and recommended that the cuts be carried out by attrition.

Report Targets Amtrak

Among the areas recommended for greater private involvement is the Amtrak system, which was created in 1971 to save rail services after the nation’s private railroads fell deeper into debt during the 1950s and 1960s.

While recommending that the Federal Aviation Administration continue to regulate aviation safety, the commission also recommended that operation of airport control towers and centers guiding en route aircraft be turned over to private contractors.

The Air Transport Assn. has favored restructuring the air traffic control system, but Bill Jackman, spokesman for the organization representing the nation’s major airlines, said the air carriers would oppose private control of control towers out of fear that the system would become more vulnerable to labor strikes.

Although there have been some successful experiments in which the poor were given vouchers to pay for housing, rather than space in public housing projects, the sort of voucher system recommended by the panel does little to increase “the overall supply of housing,” said Robert Reischauer, a senior fellow studying urban issues at the Brookings Institution.

Virtues of Housing Vouchers

Linowes, who delivered his report to Reagan in a private ceremony, said providing housing units through public housing costs three times as much as providing such shelter by giving out vouchers that can be used to pay for whatever private housing can be located.

In addition, he said, the recommended alternative to Medicare, the government program of health care for the elderly, might work this way:

A person receiving Medicare might be “entitled to a voucher good for $2,000; you spend it anyway you want. You do your own policing of the physicians, of the druggists, of the hospitals, just as you did when you were spending your own money.

“Anything that’s left over at the end of the year is accumulated for catastrophic illness. And after they die, of course, what’s left there would come back to the government,” Linowes recommended.

Franchises for Postmasters

In outlining another privatization proposal, he said local postmasters would be encouraged to run their jurisdictions as a private franchise.

“If it cost you $10 million last year to operate this facility, we’ll give you $10 million,” he said. “If you do it for less, you keep the profit, but we want two deliveries a day, no more one delivery a day.”

Eventually, he said, the postal employees would be offered stock options, to encourage them to work efficiently, and others would also be allowed to bid on local postal franchises to increase competition for economic services.