Washington Mounts a Drive to Privatize : Government: As both parties strive to balance the budget, they contemplate selling the air traffic control system and other assets. But some see drawbacks.

Half a foot of snow has just fallen on Logan International Airport, and an impenetrable New England fog bank has moved in off Massachusetts Bay. One of the nation’s busiest air traffic control towers is blinded in a shroud of white, while all but one of the airport’s four main runways are closed.

In the next hour, 100 commercial aircraft are scheduled to take off or land at Logan. And 19 floors above the main terminal, the eight air traffic controllers are depending on air and ground radar to guide them.

The pressure inside is as thick as the fog outside. Finally, supervisor Dan Gravelle gets a free moment and turns to tower manager John Butler to whisper the secret that all air traffic controllers seem to share: “This is fun!”

That kind of nerves-of-steel bravado keeps the nation’s air traffic control system running smoothly despite woefully obsolete equipment and starvation budgets. It also provides comfort to white-knuckled travelers who, for a few brief moments, may be willing to thank big government and the federal employees who brought their plane safely to the ground.

But soon there may be a new source of stress for nervous passengers and hardened controllers: privatization.

Washington’s new zeal for budget-balancing has led the Clinton Administration and congressional Republicans to rummage through the government’s attic in a scramble to stage a grand sale of the air traffic control system, as well as plenty of other federal assets.

Political pressures to cut taxes and balance the budget have prompted both parties to scrutinize dozens of high-profile government-owned operations to determine whether they can be sold off to the private sector to increase efficiency--and generate cash.

The opportunity may not be risk-free. In addition to visions of cash, the prospective fire sale is also raising questions about whether the private sector can responsibly provide the sorts of services that the government is looking to shed.

“The conflicting pressures of safety, security and profit that we will see as we begin to sell off federal assets like the air traffic control system is a huge issue, and one that hasn’t been aired nearly enough,” said Donald Kettl, a privatization expert at the University of Wisconsin. “I know that when I fly into an airport in the middle of a snowstorm, and my life is depending on the air traffic control system, I develop a healthy respect for big government.”

The drive to privatize reaches across much of the federal Establishment: from the Public Broadcasting System to the Bonneville Dam in the Pacific Northwest; from the Navy’s California oil reserves to the vast real estate holdings of the federal landlord, the General Services Administration.

Predictably, cries of outrage are beginning to echo throughout Washington as supporters of long-cherished programs confront the prospect of going private.

Advocates of public television and public radio, for example, are lobbying hard to prevent the Republicans from following through on their plans to “zero out” federal funding, forcing both to make it in the world of commercial broadcasting. PBS officials released their own polls showing broad support for federal funding for public television--prompting an indignant House Speaker Newt Gingrich (R-Ga.) to complain that bureaucrats were using taxpayer funds to mount a campaign against the new Republican Congress.

Republican congressional leaders are counting on a multibillion-dollar privatization effort to help them pay for the campaign promises in their “contract with America” without raising taxes. House Budget Committee Chairman John R. Kasich (R-Ohio), who is scrambling to find spending reductions to pay for the contract, says the sale of federal assets will be an important ingredient.

Beyond the budgetary savings, Republicans are lining up behind privatization on ideological grounds: that government should get out of the way of the marketplace whenever possible. “If a function can be done better by the private sector, then there is no reason for it to be done by government,” said Rep. Christopher Cox (R-Newport Beach).

The GOP drive is pushing the Clinton Administration to intensify its own long-stalled privatization campaign. Vice President Al Gore’s “reinventing government” task force is taking a hard look at programs that were spared in 1993 and 1994, when the Democrats controlled Congress and the pressure to pare costs was not so intense.

The task force announced a handful of privatization targets in December, including the air traffic control system, and the White House intends to announce others this year.

Says Robert Stone, project director for the National Performance Review, Gore’s task force: “We’re looking at privatizing government payroll operations, government printing, Navy ship-repair facilities, military telephone systems, Internal Revenue Service paperwork centers. . . . If it sounds like there are unlimited possibilities, that’s because there are.”

The crown jewel is clearly the nation’s air traffic control system, which looks to leaders of both parties like a cash cow ripe for milking. Republicans are counting on the sale to generate at least $18 billion they badly need for tax cuts.

The controllers recognize privatization may be the only answer to the bureaucratic nightmares and tight budgets that have left the air traffic system with archaic, 1960s computer technology.

At the same time, they worry about how bottom-line considerations might affect a system that now holds safety as its greatest imperative, especially if the airlines turn out to be the buyers.

“We are a user-friendly system. We are always trying to accommodate the airlines,” said Logan controller Don Caldwell. “But if they were the owners, how far would they be willing to go to put subtle pressures on us to cut down on what we consider necessary margins of safety?”

Transportation Secretary Federico Pena vows that the Administration’s proposal will not diminish safety. He insists that the only way to ensure the long-term stability of the air traffic control system is to take it out from under the suffocating federal bureaucracy in order to give it the freedom and financial flexibility for a long-overdue overhaul.

“We are going to enhance safety, not reduce it,” Pena said. He says the $2-billion taxpayer subsidy for the system--taxes on the airlines and passengers account for most of the rest of the $7-billion budget--would be made unnecessary by the new efficiencies introduced by corporate management.

The corporation overseeing the air traffic control system and its 40,000 employees would have its own board of directors, with seats reserved for the transportation and defense secretaries and the union representing air traffic controllers. The corporation would be free of federal personnel, procurement and financing restrictions, and the government would retain regulatory authority over safety issues.

That structure has won the backing of the union and the airline industry.

“We have been pushing for a shift to a corporate structure for at least a decade,” said Ed Merlis, a lobbyist for the Air Transport Assn., a trade group for the airline industry. “With a private-sector orientation, we would see the investment in new technologies that would allow us to increase the capacity of the system without diminishing safety.”

Even a consumer group representing airline passengers supports the Administration plan. David Stempler, executive director of the International Airline Passengers Assn., said, “They are 20 years behind in technology--something dramatic has got to be done.”

The Republican congressional leadership would do something more dramatic still: convert the system into a fully private enterprise, not a government corporation. Pena cautions that this approach could grant too much control to the airlines.

The airline industry has not chosen sides. Although its lobbyists worry that the Administration may put too much of the burden for financing the corporation on the airlines through ticket taxes, it is not yet willing to embrace the GOP alternative.

What no one advocates is a continuation of today’s practice. The Federal Aviation Administration, the parent agency of the air traffic control system, is now the world’s largest consumer of vacuum tubes, which are to 1960s computers what semiconductors are to today’s devices.

When the Tampa, Fla., airport tower had to replace its old computers, it found that new computers would not be compatible with the rest of the air traffic system. So its supplier had to restart an old production line to build a new set of 1960s-era computers.

“The equipment problems of this system are so bad they are funny,” said Assistant Transportation Secretary Frank Kruesi. “We have to get the system out from under these bureaucratic rules to give it the same level of technology that the airlines have.”