Cost of FAA shutdown could exceed $1 billion

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WASHINGTON (AP) — The congressional standoff that has partially

shut down the Federal Aviation Administration has some curious

math.

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Lawmakers risk losing more than $1 billion in revenue from

uncollected airline ticket taxes in a quarrel between Senate

Democrats and House Republicans who are demanding a $16.5 million

cut in rural air service subsidies.

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The shutdown is less than two weeks old and already the government

has lost more than $250 million in revenue because airlines’

authority to collect ticket taxes has expired. The entire annual

budget of the rural air services program is about $200

million.

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“I’m a fiscal conservative,” Sen. Kay Bailey Hutchison, R-Texas,

told the Senate on Monday. “I’m trying to make the cuts that are

necessary, trying to do the things that are right, but … that

just doesn’t add up.”

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The Senate, with the federal debt crisis resolved, is expected to

leave by the end of the week for its August recess. The House has

already left. Unless the Senate accepts the House bill, lost

revenue from uncollected airline ticket taxes could exceed $1.2

billion before lawmakers return to work a month later, senators

said.

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The FAA’s long-term operating authority expired in 2007. Since

then, Congress has been unable to agree on a long-term funding

plan. The agency has continued to operate under a series of 20

short-term extensions.

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The latest extension expired at midnight on July 22 after Senate

Democrats rejected a temporary extension bill passed by the House

that contained the subsidy cuts. Senate Republicans blocked a

Democratic extension that didn’t include cuts.

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The lost ticket tax revenue is costing the government an estimated

$200 million a week. The FAA has furloughed nearly 4,000 employees

and issued stop-work orders on more than 200 construction

projects.

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Air traffic controllers have remained on the job. Transportation

Secretary Ray LaHood has vowed that safety won’t be compromised and

travelers won’t be inconvenienced

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Democrats say the subsidies fight is actually a ploy to get them to

accept a GOP labor provision in a separate, long-term FAA funding

bill passed by the House. Republicans deny that’s the

case.

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“Senate Democrats are also arguing that the House-passed extension

is about a labor provision, but the fact is there is no labor

provision in the extension,” Rep. John Mica, R-Fla., the House

Transportation and Infrastructure Committee chairman, told

colleagues in a letter last week.

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Three times in the last 10 days, senators’ efforts to pass a bill

to end the shutdown without making air service subsidy cuts have

been blocked by Sen. Orrin Hatch, R-Utah. Each time, Hatch has

focused his remarks on the labor provision.

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“I’ve been asked by our leadership to make these objections,” Hatch

explained Monday night. “What is important here – and it’s not some

itty-bitty little thing – is that you have labor regulators out of

control.”

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To end the shutdown, he said, the Senate must agree to the House’s

labor provision. Then, the shutdown “would be solved in a

nanosecond,” he said.

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The labor provision would overturn a National Mediation Board rule

approved last year that allows airline and railroad employees to

form a union by a simple majority of those voting. Under the old

rule, workers who didn’t vote were treated as “no”

votes.

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Republicans complain that the new rule reverses 75 years of

precedent to favor labor unions. Democrats and union officials say

the change puts airline and railroad elections under the same

democratic rules required for unionizing all other

companies.

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The White House warned in March that President Barack Obama would

veto an FAA bill containing the labor provision.

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