For the U.S.'s Next Generation Air Transportation System (NextGen), this time the sky really might be falling. Just as the program was demonstrating early results and the FAA was solidifying its pro-NextGen leadership, including Administrator Michael Huerta and new Chief NextGen Officer Michael Whitaker, now comes a one-two budget punch that threatens to disrupt the fragile momentum the decade-old program had built up lately. And no matter how it plays out, the conclusion is likely to be a new, triaged version of NextGen that tries to move forward while fending off its doubters.

But first, there are automatic budget rescissions from March's sequestration cuts to absorb, as well as the increasing likelihood of another round of cuts when fiscal 2014 begins Oct. 1. Even though unwelcome, cuts are the preferred route as House Republicans in their 2014 appropriations bill are aiming instead to set the lowest level of capital funding for FAA since 2000. Last week they approved language that, if enacted, would provide $439 million below sequestered 2013 levels for FAA facilities and equipment (F&E), an account critical to NextGen investments, let alone $623 million below the Obama administration's roughly $1 billion request for 2014.

To independent observers, the impact would be clear. Capital Alpha Partners analyst Byron Callan sees the House language, or “mark,” as worse than sequestration. “That markup cut the fiscal 2014 FAA's facilities and equipment request by 22% and would 'devastate' FAA modernization.”

The FAA-parent Transportation Department's inspector general, Calvin Scovel, 3rd, says the House's mark would freeze air traffic improvements. “In fact, [FAA] would have to devote all of its attention and much of its funding permitted by Congress to simply sustaining the current system as it exists.”

Not surprisingly, congressional Democrats and the administration agree. “This reduction would significantly slow, if not terminate, several aspects of FAA's maintenance of current facilities, equipment and the modernization of the nation's air traffic control system through NextGen,” says the White House Office of Management and Budget (OMB). Because the F&E account covers more than just NextGen upgrades, the House mark is even more damaging as it would slash “critical” infrastructure such as back-up electrical power to keep air traffic facilities going during commercial power outages, OMB says.

House Republicans, who control the lower chamber, are passing appropriation bills this year that follow their overall tea-party-influenced budget framework. Among other elements, it entails unrequested, additional spending for national security but deeper cuts for civil agencies like FAA. The administration has threatened to veto any final bill that adheres to that framework. By comparison, the Democratic-run Senate Appropriations Committee's $962 million related mark for NextGen provides “robust” funding for NextGen, OMB argues.

Competing House and Senate appropriations notwithstanding, sequestration is likely later this year as hope fades in Washington for a “grand bargain” over the federal debt and budget, necessary to undo the 2011 Budget Control Act and its sequestration cuts. If so, FAA supporters should not expect the agency to emerge as relatively unscathed as it did under 2013 sequestration, one congressional aide warns, when Congress spared FAA from some of the worst effects by allowing the agency to use funds from the Airport Improvement Program.

“Everybody expects we're going to have another critical point in September” once Congress reconvenes after an August break and has less than a month to figure out how to keep the government operating in fiscal 2014, says Senate aviation subcommittee aide Rich Swayze.

Even beyond the budget brouhaha, the agency still has a lot of work to do to make NextGen a believable vision, according to Scovel and House aviation subcommittee members of both political parties. “I'm concerned that without changes, delays in NextGen will force us to rename it 'LastGen,'” says Rep. Rick Larsen (Wash.), the ranking Democrat on the subcommittee.

Practically from its conception around 2004, NextGen has been dogged by accusations of slow progress—despite evidence that the grand air traffic management vision is becoming reality (AW&ST May 14, 2012, p. 38)—in part due to its ambition. Described by the FAA as the “largest, single aviation infrastructure project in history,” the effort is expected to cost $18 billion through 2018, according to congressional auditors, and eventually replace the legacy ground-based radar-tracking system with satellite-powered specificity that boosts safety, reduces fuel burn, increases capacity and cuts congestion in U.S. airspace. A counterpart across the Atlantic, the Single European Sky Air Traffic Management Research, or Sesar, seeks similar benefits but takes a different approach in structure and timing—a distinction that has spurred friction among U.S. and European officials and criticism from industry (AW&ST July 1, p. 39).

But with budget cuts in Washington, NextGen—already restructured several times, including to force internal FAA buy-in—suddenly is facing a significant culling and reexamination of what is possible. “We're at a critical juncture, and to some extent 'reset' is required,” Scovel asserted at a July 17 House aviation hearing.

Ironically, despite laments from Democrats on the subcommittee that NextGen's funding was squeezed for years, the inspector general argues that money was not an issue until now. “Congress has been fairly generous with the agency for its NextGen lines of business,” he argues. “FAA has had the luxury of being allowed to proceed on a pretty broad front, across transformational programs longer range, as well as trying its hand at some of the near-term improvements that users have been most eager for. Now the [funding] situation is different and FAA will have to make some very tough priority decisions in consultation with the users.”

Huerta told lawmakers he knows the agency must consider doing fewer things better. On July 12 he asked the industry-government NextGen Advisory Committee (NAC) to prioritize a list of activities under more sequestration cuts or House-like appropriations. “Industry and we have agreed that it would be prudent for us to have a clear sense of what are the key priorities that we need to ensure have maximum focus as we enter this more-uncertain fiscal climate,” the administrator says. Across-the-board reductions will only delay everything.

Unfortunately for supporters like Huerta, who was FAA's chief NextGen official until the unexpected resignation of then-Administrator Randy Babbitt in December 2011 superseded his attention to NextGen, the budget cuts come as the program was logging successes.

After political gridlock finally eased enough for Senate confirmation in January, Huerta took over full FAA administrator duties. Whitaker took office in June and is staffing his NextGen team. Better yet, airlines serving Dulles International or Ronald Reagan Washington National airports have started using NextGen procedures and FAA estimates they will save $2.3 million in fuel annually and cut greenhouse emissions by 7,300 metric tons.

The NAC has slated a meeting for Sept. 19. The FAA continues work on an Integrated Master Schedule, which officials and Scovel expect to be complete by December. Scovel also says his office will issue an audit later this year.

With Adrian Schofield.