FAA Set to Lose $1 Billion After Senate Fails to Pass Funding

Congress left town Tuesday without passing a bill to re-fund the FAA.

August 2, 2011, 3:32 PM

WASHINGTON, Aug. 2, 2011 -- The Federal Aviation Administration will lose more than $1.2 billion in uncollected taxes alone, after the Senate adjourned today for a month-long "district work" period without passing a bill to re-fund it.

Funding for the FAA expired on July 22, shutting down not only the administration's tax collecting but also construction and maintenance projects across the country. About 75,000 workers have been laid off as a result.

While the House passed both a short-term and a long-term funding bill in the spring, the Senate did not approve either because of objections to riders in the two bills.

At the Palm Springs International Airport in California the effect of the standoff is plainly visible. A fork lift, scaffolding, man lift and other construction machinery lies abandoned at the site of a half-built air traffic control tower, running up a rental tab of $2,000 per day.

The 40 to 60 workers whose job it was to build this tower were sent home without pay a week and a half ago when FAA funding expired.

"This is costing the taxpayers dearly," said Bob Graf, the project's superintendent for Swinerton Builders. "The longer it goes on the more it's going to cost because the FAA is going to have to reimburse us for those costs."

Graf said his employees are not salaried, so when they don't work, they don't get paid. He said if the shutdown were to drag on, most of them will have to find new jobs in order to pay their bills.

And because airport construction workers have to pass TSA background and security checks, hiring new workers could be a burdensome and expensive process once Congress eventually opens the FAA funding stream again.

"If [the shutdown] went on a month or two it would be devastating to the project," Graf said.

And continue it will.

Senate Majority Leader Harry Reid initially expressed optimism today that upper chamber may take up the House's short-term funding bill, despite Democrats' opposition to the rider that cuts subsidies to rural airports.

"I do my best to protect the state, but sometimes you have to be reasonable," Reid said. "As we learned with this big deal we've just done, sometimes you have to step back and find out what's best for the country and not be bound by some of your own personal feelings."

But by 6:30 PM ET Reid's optimism had dissipated and he called for the Senate to adjourn without asking consent for an FAA funding bill because, he said, the Democrats "tried for days now" to convince Republicans to drop the riders and pass a clean extension.

"Four thousand air travel employees are out of work and safety inspectors are working without pay because Republicans are playing reckless games with airline safety," Reid spokesman Adam Jentleson said.

"There is bipartisan agreement that we should keep air travel employees and safety inspectors on the payroll while we work out our policy differences, but we are being blocked by a handful of Republicans," Jentleson said. "We should not let ideology interfere with making sure that Americans' air travel runs as smoothly and safely as possible."

Sen. Kay Bailey Hutchison, R-Texas, who supported a clean reauthorization despite also supporting the House's bill, pointed out on the Senate floor Monday that the math "just doesn't add up."

While Congress fights over $16.5 million in airport subsidies, the federal government is losing twice that amount per day in uncollected taxes. That loss will jump to more than $1 billion before Congress returns after Labor Day, which would be enough to fund the entire airport subsidy program for five years.

"I cannot think of anything more irresponsible," Hutchison said.

One Democratic senator who has been outspoken against the House's plan is Jay Rockefeller of West Virginia, the chairman of the Senate Commerce Committee which deals with FAA funding.

Rockefeller pointed out that Congress has passed clean FAA extensions 20 times since the last long-term authorization expired in 2007. He is one of several Senators who have proposed another clean extension throughout the past three days.

Sen. Orin Hatch, R-Utah, objected to all three attempts because he said he opposed short-term solutions and wanted the Senate to instead take up the House's long-term funding bill, passed in April, which overturns a new labor law that makes it easier for airline employees to unionize.

He said the union provision is a "big-time issue" because the National Mediation Board's change to union voting rules overturned 75 years of labor precedent.

"What is important here, and it's not some itty bitty little thing, is that you have labor law regulators out of control," Hatch told the Senate Monday. "I think what the NMB did is absolutely wrong and somebody needs to stand up to them."

Even if Hatch and other Senate Republicans had agreed to a short-term clean extension Tuesday, it could not have passed the House because the lower chamber had already adjourned for its August recess.

"It's a tragedy which never had to happen," Rockefeller said Monday on the Senate floor. "It's a tragedy about ego, about bullying, about an attempt to prove one side would cave. It's sort of the worst kind of political bickering that the American people are so sick of. But this time they are going to pay a terrible price."

The shutdown carries a hefty price tag for the federal government as well.

Without Congressional reauthorization, the FAA cannot collect airline ticket taxes, resulting in a loss of about $200 million per week.

"I want people to understand that what has been happening to the FAA is causing enormous pain throughout the country and the pain will only grow," Rockefeller said.

In addition to the lost tax revenues, the shutdown has sent 4,000 FAA employees and 70,000 construction workers around the country home without pay. It has also halted 248 construction projects and prevented $2.5 billion in construction grants from being paid out.

"It's not fair," said Senate Majority Leader Harry Reid. "We need those jobs significantly. I can't stress enough how much we need those jobs."

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