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FAA dispute costing millions more than it would save

Image: Construction Stops On New Oakland Control Tower After FAA Funding Is Halted
An Alaska Airlines flight takes off past a half-completed control tower at Oakland International Airport in California. Construction work on the tower and on hundreds of other Federal Aviation Administration projects has been halted after Congress adjourned this week without reauthorizing the agency's funding.Justin Sullivan / Getty Images file
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Did Congress really pass up more than a billion dollars in tax revenue just to save $16 million in subsidies for 13 rural airports?

has already cost the government far more in tax collections than what would be saved by passing the funding extension offered by House Republicans — $200 million a week and counting, potentially adding up to $1.2 billion by the time Congress can return to Washington and pass a funding bill in early September.

As with the larger deadline showdown over the debt ceiling, the reason for the standoff is more complicated than portrayed. And it may lie in Atlanta, home of Delta Air Lines, which Senate Democrats have singled out for criticism.

Delta said Wednesday it was disappointed by the lack of action and denied that it had played any role.

First things first: The FAA has gotten along for almost five years on a string of 20 "temporary extensions" because Congress has been unable to work out long-term funding for the agency since 2007. The 20th extension ran out on July 23, and so "nonessential" functions — construction projects, facilities inspections and the like — were shut down.

About 4,000 FAA employees and tens of thousands of workers on FAA construction projects have been on furlough since then. None of them, the Transportation Department stresses, are critical safety workers like air traffic controllers, who are paid under a separate system.

"Safety is not compromised — never has been, never will be," Transportation Secretary Ray LaHood said Tuesday in an interview with MSNBC TV. "What is compromised are 70,000 construction workers right smack dab in the middle of the construction season."

The lack of funding also stopped airlines' collection of millions of dollars in ticket taxes used to pay FAA employees. If the shutdown lasts all the way to early September, when Congress is scheduled to return from recess, the lost revenue could top $1 billion, the Transportation Department estimated.

"This is not the best way to run the best and safest aviation system in the world," LaHood said. "We shouldn't be doing this."

Obama threatened veto
Both the House and the Senate have actually passed bills to fund the FAA this year, but they weren't able to combine them into a single measure both chambers could agree on.

The Senate version, which passed in February, left in place a new federal rule that would make it easier for unions to organize at airlines. (Previously, unions had to win "yes" votes from a majority of all eligible employees, whether they actually voted or not; employees who didn't show up to vote were automatically counted as "no" votes. The new rule makes it a simple majority of employees who actually vote.)

In April, the House passed its version. Under heavy lobbying from Delta — where the National Mediation Board is investigating — it included an extra provision to repeal the new rule.

When that happens in Congress, a committee of senators and representatives usually irons out the differences and each chamber passes the compromise bill. That didn't happen this time.

Senate Democrats refused to go along with a compromise that killed the union organizing rule, which President Barack Obama said he would veto anyway. But House Republicans said it was non-negotiable.

So Rep. John Mica, R-Fla., chairman of the House Transportation and Infrastructure Committee, which oversees the FAA, introduced a second House bill, a temporary FAA extension that passed in July. It didn't include Republicans' objection to the new union rules, but it added a special provision of its own, one that would sharply reduce federal subsidies that airlines use to help pay for flights to small airports in some rural areas, at a savings of about $16 million.

Were senior Democrats targeted?
The program is called Essential Air Service; it helps pay for flights into and out of about 150 small airports where service would otherwise be unprofitable.

Mica's version of the extension targeted 13 of them. One is in Ely, Nev., which is represented by Senate Democratic leader Harry Reid. The airport, Mica , "is subsidized an incredible $3,720 per ticket."

Another is in Morgantown, W.Va., which is represented by Democratic Sen. Jay Rockefeller.

Another is in Glendive, Mont., which is represented by Democratic Sen. Max Baucus, chairman of the Finance Committee.

Another is in Jamestown, N.Y., which is represented by Democratic Sen. Charles Schumer, a member of Baucus' committee.

A fifth is in Alamogordo, N.M., which is represented by Democratic Sen. Tom Udall, a member of the Transportation Committee's subcommittee on aviation.

"Senate leaders have chosen to protect political pork and outrageous subsidies of nearly $4,000 per ticket on the backs of 4,000 furloughed FAA employees," Mica said in his letter.

Not all of the airports are in states represented by senior Democrats influential in finance or transportation. The Athens, Ga., airport, for example, is in a state with two Republican senators and a district represented by a conservative Republican.

House Republicans said the 13 airports were targeted because they're near larger airports that could absorb the traffic. But the closest larger airport to the one in Glendive, Mont., Baucus' state, is more than 225 miles away — in Regina, Saskatchewan.

Some Democrats cried foul, accusing Mica of trying to score personal political points through "political extortion," in the words of Rockefeller.

"Republicans continue to make it clear that this shutdown is not about fiscal responsibility but about furthering their political agenda at the expense of the American people," Rockefeller said Wednesday.

Reid told reporters Wednesday: "So many people desperate for work are being told they can't because, once again, the House Republicans — rather than legislate the way we've done around here for a long time — feel they have the empowerment to hurt individual people."

Schumer said Mica's maneuver was like "someone puts a gun to your head and says, 'Give me your money.'"

"You leave out the whole context that there's being a gun held to your head," Schumer said. "And that is not fair, and that is not right."

Here's the thing: Mica has all but admitted that's what he's doing.

The rural airports provision is "just a tool to try to motivate some action to get this resolved," at an airport executives conference.

If the union issue could be settled to House Republicans' satisfaction, "the rest can fall into place within 20 minutes," he said.

Delta: Issue is service, not unions
But Sen. Orrin Hatch of Utah, the senior Republican on Baucus' Finance Committee, said Wednesday it was the fault of Senate Democrats and the White House that the FAA was in limbo, saying the Senate had multiple chances to accept Mica's extension since it passed the House last month.

That's the one with the cuts in subsidies for rural airports, which Senate Democrats complain is a "poison pill" orchestrated by the airlines. And they have one airline in particular in mind.

"I wish I understood why the policy objections of one company — Delta Air Lines — mattered more than the livelihoods of thousands of people," .

Tuesday with NPR, Reid also attributed the standoff to "a battle over Delta Air Lines, who refuses to allow votes under the new rules."

Trebor Banstetter, Delta's communications manager, told Wednesday that the airline was "disappointed" by such criticism because "Delta worked to convince Congress to reach an agreement on an extension."

Banstetter blamed the rural airports subsidy for the deadlock, saying "the labor provision is not mentioned in the FAA extension proposed by Congress."

About the only thing everyone agrees on is that Congress needs to act quickly.

"This is not the way to create jobs, by laying off 70,000 construction workers," LaHood said in an interview with CNBC. "They can work out their differences on labor provisions later on."

And LaHood had a reminder "for all these conservative politicians who are worried about the debt and the deficit": As long as the FAA is shut down and taxes aren't collected, "a billion dollars will not come into the coffers."

Mindful of that, Obama called Wednesday for Congress to cut its recess short, return to Washington and resolve the dispute by passing a so-called clean extension — one without the cuts in airport subsidies.

NBC News reported that Reid sent House Speaker John Boehner, R-Ohio, a letter Wednesday offering to approve a clean extension, saying the cuts in airport subsidies could be negotiated in a long-term bill when Congress returns next month.