FAA to Partially Shutdown After Congressional Inaction

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(Photo (cc) by Flickr user Ack Ook)

The Federal Aviation Authority is headed for a partial shutdown at midnight Friday, when the agency's operating authority expires. Thousands of workers will be furloughed and airline ticket prices will drop temporarily.

The Senate adjourned without passing the agency's 21st authorization extension after failing to resolve a partisan dispute over a provision making it more difficult for railroad and airline workers to unionize as well as a proposal to remove subsidies for rural airports.

Without legislation granting the FAA to operate as a federal agency, it will not be able to collect airline taxes. About 4,000 employees will be furloughed. Their salaries are paid out of the $200 million a week in airline ticket tax revenue. The Department of Transportation also said that $2.5 billion in airport construction work will be halted.

Secretary of Transportation Ray LaHood said he was disappointed that Congress failed to pass the legislation. “Because of their inaction, states and airports won’t be able to work on their construction projects, and too many people will have to go without a paycheck.  This is no way to run the best aviation system in the world.”

Air traffic controllers and other safety-related FAA workers will stay on the job.

In fact, the only direct affect passengers are likely to notice will be lower prices.  Ticket costs will drop as airlines stop charging taxes at midnight. The price of a flight could fall by between 10 and 20 percent on typical flights according to one estimate from the Air Transport Association and a scan of airfares posted on airline websites.

The FAA last received long term operating authority in 2007.  Since then, Congress has granted the agency an extension 20 times without incident. The unusual Congressional deadlock over this extension is centered around two points: labor rights and rural subsidies.

In April, the National Mediation Board issued a ruling making it easier for rail and airline workers to unionize. House Republicans objected and responded by including a provision overturning the ruling in a revised long-term FAA authorization bill. The Senate had already passed their own version of a long-term bill, but without the labor provision. That became a sticking point.

So, with no long term bill agreed upon, a 21st short-term extension was necessary. But on Wednesday when the House passed their version of the extension, House Transportation Committee Chair, John Mica (R - Fla.) included a provision that removed several airports from the Essential Air Service program, which subsidizes rural airports.

His provision removes the subsidy for airports if they get more than a $1,000 subsidy per passenger. Three airports fit that criteria in Nevada, Montana, and New Mexico, according to a statement from Mica. "At Ely, Nevada, for example, every single airline ticket is underwritten $3,720 by federal taxpayers," the statement said. Mica's changes would also eliminate funds for another 10 so-called EAS communities because they are too far from hub airports. In all that would save an about $16.6 million, Mica says.

The cuts would reduce funding to the states of Senate Majority Leader Harry Reid (D-NV), and Senate Commerce Committee Chair Jay Rockefeller (D-WV), whose committee oversees the FAA.

Rockefeller vociferously opposed the amendments and Senate Democratic leadership declined to bring up the FAA extension at all. Mica issued a statement calling that "unbelieveable" and saying, " in light of the nation’s pending financial disaster and soaring deficits, they couldn’t find a way to cut even a few million dollars by accepting this minor request to reduce outlandish subsidies."

The earliest the issue can be taken up again is on Monday, when the Senate next meets.