Sunday, July 24, 2011

FAA shutdown would cost govt $200 million a week

Portions of the Federal Aviation Administration will shut down at midnight — putting nearly 4,000 people temporarily out of work and allowing airline passengers to buy tickets without taxes — unless Congress can resolve a partisan dispute over legislation to temporarily extend the agency's operating authority.

Transportation Secretary Ray LaHood said Thursday the government will lose about $200 million a week in airline ticket taxes and $2.5 billion in airport construction projects will come to a halt if the Federal Aviation Administration is forced to shut down.

A partial shutdown looks increasingly likely because Congress hasn't been able to agree on legislation to extend the FAA's operating authority, which expires at midnight Friday. Whatever happens in Washington, airlines will still operate as normal and air traffic controllers would remain on the job.

But airlines would no longer have authority to collect a federal tax on tickets, which could be a temporary financial boon for passengers. About 4,000 FAA workers, whose jobs are funded with ticket tax revenues would be furloughed, LaHood told reporters at a news conference. The FAA employs more than 47,000 people overall.

The main obstacle is a provision sought by House Republicans and the airline industry that would make it more difficult for airline and railroad workers to unionize. House Republicans also want to eliminate government subsidies for airline service to 13 rural airports, a $16 million provision that Senate Democrats say is unacceptable. The union provision was added to a long-term FAA funding bill earlier this year, but negotiations on that bill have stalled. Without long-term legislation, an extension bill is necessary to keep the agency operating.

"This is no way to run the best aviation system in the world," LaHood said. "Congress needs to do its work." (more)