FAA Shutdown: Deal Reached to End Stalemate

After 13 days of political stalemate over funding for the Federal Aviation Administration, lawmakers announced today a deal to end the shutdown that has sent more than 75,000 workers and contractors home without pay.

Tomorrow the Senate will pass the temporary FAA funding bill the House passed two weeks ago. A procedural vote will allow the bill to pass by unanimous consent without forcing Senators to return to Washington from their August "district work break."

This is the bill Senate Democrats objected to because it cut off subsidies to 13 rural airports.

So, did Democrats cave? After all the are agreeing to pass the Republican bill approved by the House.

They caved, but not entirely. Once the deal is passed and signed, Transportation Secretary Ray LaHood will use his authority – granted in the bill – to issue a waiver allowing at least some of the subsidies to continue.

Transportation Secretary Ray LaHood on the announcement of an FAA deal: "This is a tremendous victory for American workers everywhere. From construction workers to our FAA employees, they will have the security of knowing they are going to go back to work and get a paycheck - and that's what we've been fighting for. We have the best aviation system in the world and we intend to keep it that way."

A end to the impasse is exactly what furloughed FAA civil engineer Curt Howe has been pleading with Congressmen for over the past two days. Howe, 54, has worked for the FAA for 24 years. If a deal was not reached, Howe would have joined 4,000 of his FAA colleagues in the unemployment line, not because he lost his job, but because he has been furloughed.

The FAA was partially shut down July 23 after House Republicans and Senate Democrats failed to reach an agreement to continue funding the agency. The Washington dispute has, in effect, laid off about 75,000 people who work for the agency or on an FAA-funded airport construction project.

The FAA has been partially shut down over whether to cut $16 million in air service subsidies. With both chambers on their August "district work" break, the shutdown could go on until at least Labor Day.

"I don't think Congress real knew the impact of what they didn't do," Howe said. "[My colleagues] thought for sure Congress would take care of it before they went on recess. They are just baffled."

Howe said if the shutdown continues into September he and his wife may not be able to make their mortgage payment or pay their daughter's college tuition bill. His last paycheck for the foreseeable future comes in on Tuesday, he said.

Nevertheless, Howe said he was in a better situation than some of his younger co-workers because he has had more time to build his savings. He said many of his co-workers have $600 to $700 monthly student loan payments that they will be unable to pay.

"It's a huge, huge impact," Howe said. "A lot of engineers' plan is to run their credit cards up and go into debt. What we won't get back is our credit ratings."

The Congressional impasse stems from a disagreement over $16.5 million in subsidies to rural airports, which the House voted to eliminate, and a new labor law decided by the National Mediation board which makes it easier for airline employees to unionize, a law Democrats support and Republicans hope to overturn.

The House has already passed a short-term funding bill, but Senate Democrats refuse to pass it because of the subsidy cuts. House Republicans, on the other hand, refuse to pass a clean extension, which Senate Democrats support.

While Congress fights over the $16.5 million subsidy cuts, the federal government is losing about $30 million per day in airline ticket taxes because the FAA cannot collect the taxes while it is shutdown.

"They're trying to save $14 million really out of a $160 million program. But we're losing $200 million a week in ticket tax revenue. The passengers are paying it. The [airlines] are pocketing it. We need that money," Rep. Jim Moran, D-Va., said on ABC's "TopLine" today.

If Congress does not pass an extension before returning from their summer break, the federal government is set to lose about $1.3 billion.

"Don't put the livelihoods of thousands of people at risk, don't put projects at risk and don't let a billion dollars at a time when we're scrambling for every dollar we can get left on the table because Congress did not act," President Obama said yesterday.

Even though the FAA cannot collect taxes, most of the airlines have increased their prices so the would-be tax revenue is now going to the airlines' bottom line. Only Alaska, Hawaiian and Spirit airlines have passed the tax savings on to their customers.