FAA shutdown would cost gov't $200 million a week

[July 22, 2011]  WASHINGTON (AP) -- 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, Transportation Secretary Ray LaHood said Thursday.

A partial shutdown looks increasingly likely because Congress hasn't been able to come to an agreement on legislation to extend the FAA's operating authority, which expires at midnight Friday.

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. The 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.

If FAA authority were to expire, airlines would no longer have authority to collect federal ticket taxes. About 4,000 FAA workers whose jobs are funded with ticket tax revenues will also be furloughed, LaHood told reporters at a news conference.

Air traffic controllers, however, would remain on the job and safety would be maintained. Overall, the FAA has more than 47,000 workers.

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

He declined to answer questions about the possible consequences of a prolonged shutdown. But Sen. Jay Rockefeller, D-W.Va., chairman of the Senate committee that oversees the FAA, said the agency "estimates that it could only operate air traffic and support services through mid-August."

"This would mean services to smaller areas like mine -- West Virginia -- would need to draw down in the near term so that the FAA can focus on primary traffic. That's not something we would look forward to," Rockefeller said in a speech on the Senate floor.

If there is no extension, initially the largest furlough would involve nearly 1,000 workers at FAA headquarters in Washington, transportation officials said. Another 647 workers at FAA's technology and research center in Atlantic City, N.J., and 124 workers at the agency's training center Oklahoma City would also be furloughed. Smaller numbers of other workers across the country would also be affected.

The situation could be a financial boon for airline passengers. Barring an agreement, the taxes will disappear from airline and ticket-selling websites at midnight Friday.

The federal tax on a $300 round-trip airfare is about $61, according to the Air Transport Association. Airlines would still collect airport fees.

"The airlines have been alerted to the potential to need to make this change, and are working on it," Jean Medina, a spokeswoman for the association, said in an email.

Long-term authority for the FAA expired in 2007. Unable to agree on long-term funding legislation for the agency, Congress has kept the FAA operating through a series of 20 short-term extension bills.

Previous extensions have been routine. But this time House Republicans added a provision to what would be the 21st extension bill that eliminates government subsidies for airline service to 13 rural communities. Senate Democrats say the provision, which would save about $16 million, is unacceptable. They've accused House Republicans of using the extension bill to force them to accept policy changes that should be part of negotiations on a long-term funding bill.

Republicans said Senate Democrats have been unwilling to budge on the labor provision and a handful of other issues of disagreement in the long-term funding bill. Rep. John Mica, R-Fla., House Transportation and Infrastructure Committee, has acknowledged he's using the rural air service subsidies in part as a means to prod Democrats to cut a deal on those issues.

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.

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.

The White House warned in March that President Barack Obama might veto the bill if the labor provision is retained.

[Associated Press; By JOAN LOWY]

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