FlyClear makes an interesting case study in the GOP approach to governance.
One of the beloved principles of the right fielders is "privatization" -- the idea that services ought to be taken out of the hands of the (inefficient, bloated) government and given to (efficient, lean) private companies, resulting in both a cost savings to the tax payer and improved services. Privatization has been pushed by the GOP for all sorts of government services, although (tellingly) never for anything like Secret Service protection or Congressional services that directly impacts the GOP powerful.
Privatization is one of those ideas that sounds less appealing the more you examine it. It rests on the notion that government is less efficient than private industry. But government and industry are both huge, complex, and varied. It makes no sense to talk of either as if it were a single entity. And when you get down to comparing specific functions of government to the corresponding functions in private industry, you quickly find that sometimes government is usually more efficient than private industry. For example, Medicare spends about 2% on administration costs; while private insurers in the US spend about 31% on administration costs. (The private-health insurance lobbyist group CAHI commissioned a study that "debunked" these numbers. The most favorable analysis they could contrive showed that Medicare had 5% administrative costs compared to about 17% for private health insurers -- still a cost difference of over 300%.) More recently, the Washington Post reported that an effort to privatization debt collection at the IRS was actually costing more than the debts being collected. In fact, there are few real success stories for privatization. Some proponents point to this story:
Case Study: In 2002, the OMB decided to use competition in response to poor performance by the Government Printing Office, and offered the job of printing the fiscal 2004 budget to competitive bidding. In order to keep its job, the GPO turned in a bid that was almost 24 percent lower than its price from the previous year. That was $100,000 per year that the GPO could have saved taxpayers at any time it chose, but it never chose to do so until it was forced to compete.Ignoring the fact that this story really demonstrates the power of competitive acquisition rather than privatization, that the private companies would probably have overrun their bids, and that $100,000 is a trivial amount of money even for the GPO, it is interesting to note that subsequent initiatives to privatize the GPO functions have failed because the private bids have been more expensive and offered less value.
But, right-wing radio rhetoric aside, the Republican push for privatization has never been about reducing the cost of government. (With Republican control of the White House, the Senate and the Congress, the federal government grew at double the rate of the Clinton White House, triple the rate of inflation, and has left use with record deficits.) The real agenda is to divert federal spending into the private sector -- to turn the federal budget into a profit center for the rich folks who control the GOP.
Enter the "Transportation Services Administration." Hastily created in the wake of 9/11, the TSA is primarily responsible for airport security and is famously incompetent. Much of what TSA does has been criticized as "security theater" that inconveniences travelers without providing any real security. TSA has made a female passenger remove her nipple rings with a pair of pliers, opened a teenage boy's sterile medical equipment, and committed various other scandals.
In one way, TSA is another "anti-success" story for privatization. Before TSA, airport security was handled by private companies administered through the airlines, who spent the bare minimum needed to meet FAA regulations. Not unsurprisingly, airport security was terrible. In the wake of 9/11, the Republican Congress in conjunction with the Bush White House decided that airport security was too important to be left in the hands of the lowest bidder, and federalized (that's the opposite of privatized) airport security.
Almost immediately, the cries started from the right-wing to (re-)privatize airport security which would, they promised "produce significant cost savings." Okay. Even amongst the right-wingers in Congress this notion of privatizing the TSA a few years after federalizing it seemed like it might be fertile material for the late-night humorists, and the notion went nowhere.
However, if you can't get in the front door, check for an open window. Suddenly the "Registered Traveler" program popped up at TSA. The origins of this program are obscure. Although it was "announced" to Congress in 2004, there's no indication of where the idea originated. So what is the Registered Travel program?
The Transportation Security Administration (TSA) facilitated the private industry in developing the Registered Traveler (RT) program for travelers who volunteer to submit the biographic and biometric information necessary for TSA to conduct a security threat assessment (STA) and confirm that they do not pose or are not suspected of posing a threat to transportation or national security. LinkThe key phrase here being (as I've highlighted) "facilitated the private industry." What did the TSA facilitate on behalf of private industry? Mainly profit. The industry partners in the RT program do little more than act as a conduit for passing a $28 TSA fee from the traveler to TSA:
Clear's first year price is $100 plus the TSA vetting fee of $28 for a total charge of $128. LinkTo be clear, it is TSA who does the work of vetting the passenger and issuing him Registered Traveler status. All FlyClear does is collect your paperwork and a $100 fee. (And BTW, the TSA doesn't care what fees their industry partners charge.)
Would you like to save that $100 and submit your paperwork directly to the TSA? That's not an option.
(By the way, the entire Registered Traveler program hardly seems worth the trouble. As FlyClear admits (in an obscure part of their web site) you must first check in through the FlyClear kiosk with your smart card, fingerprint and iris scan (no possibility for technical glitches there!) and then:
Clear members still proceed through metal detectors and x-ray machines operated and regulated by the Department of Homeland Security but other parts of the process are expedited. When you approach the lane, our attendants will help you with the bins and to get ready to go through the checkpoint.So your $100/year buys you an attendant to help put your shoes in an X-ray machine bin.
And after four years of development, it appears that the Registered Traveler registration isn't universal between vendors. If you use an airport serviced by some other vendor, your FlyClear registration won't do you any good.)
The Registered Traveler program is more than a little reminiscent of the IRS's e-file program, where vendors like Quicken charge $18 or more to provide your tax data to the IRS, with no provision for an individual to provide data directly to avoid the fee. (Backlash from that program resulted in the FreeFile program that provides free filing for individuals who make less than $54,000. Free to the individual, at least. In what must seem like a made-in-GOP fantasy, the IRS pays companies to collect the tax information from these payers and hand that information back to the IRS. Those costs are then passed back to the taxpayers -- it makes one's head spin.)
E-file and RT have caused little comment, which suggest to me that we'll continue to see government agencies create this "stealth privatization" layer of profit-taking private companies between citizens and government services.
In the meantime, I'll put my own shoes into the plastic bin.
Next: McCain on Privatization
