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FAA funding ends at midnight; almost 4,000 at FAA to be furloughed


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FAA funding ends at midnight; almost 4,000 at FAA to be furloughed


By Carol Cratty, CNN Senior Producer

July 22, 2011 6:44 p.m. EDT


Washington (CNN) -- Almost 4,000 Federal Aviation Administration workers are facing furloughs after Congress adjourned Friday without passing a measure to reauthorize the agency's funding, according to the Transportation Department. A $2.5 billion program providing grants for airport construction projects also will shut down, and thousands of construction jobs could be jeopardized.


In a news release, Transportation Secretary Ray LaHood said he was disappointed that lawmakers did not pass a reauthorization and that funding is set to run out at midnight Friday. "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," he said. "This is no way to run the best aviation system in the world."


The release goes on to say, "The safety of the flying public will not be compromised."


Air traffic controllers will remain on the job, but the furloughs will affect many FAA engineers, scientists, computer specialists, community planners and others. According to the Department of Transportation, FAA workers could be furloughed in 35 states, Washington, D.C., and Puerto Rico.


Efforts to continue funding hit a stumbling block over House Republican efforts to make it harder for airline and rail workers to unionize and over a move to cut subsidies for air service to rural airports.


Rep. John Mica, R-Florida, chairman of the House Transportation and Infrastructure Committee, took issue with funding for the Essential Air Service program, which provides subsidies to ensure that small communities have access to passenger air service.


"It is unbelievable that after the House passed the 21st FAA extension, the Senate departed Washington and left the FAA and many of its employees behind," he said. "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."


Sen. Jay Rockefeller, the Democratic chairman of the Commerce, Science, and Transportation Committee, issued a statement saying that he is concerned about the economic impact at airports in all 50 states and that the furloughs would end research on major new air traffic control technology known as Next Gen. "The House did a disservice this week, and I am hopeful that they will realize the error of their ways and return to the table so we can work out a compromise that restores funding to the FAA," he said.


Rep. Nick Rahall, D-West Virginia, heaped blame on House Republicans. In a news release, Rahall said, "The House Republican leadership is willing to lay off tens of thousands of middle class American construction workers and jeopardize billions of dollars in airport construction simply to score a few political points for Tea Party extremists."


FAA Administrator Randy Babbitt said the nearly 4,000 workers who will have to be furloughed "perform critical work," and he said they "do not deserve to be put out of work during these tough economic times."


Transportation officials said Congress has extended the FAA's funding almost 20 times without controversy. Without new legislation, the government also will not collect about $200 million a week in airline taxes that normally go to the Airport and Airway Trust Fund.



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FAA shutdown gives airline-ticket buyers a break on taxes


The federal government has left the FAA in limbo — and that will save buyers of airline tickets some money since they won't have to pay federal taxes on the tickets.


By Kristin Jackson

Seattle Times travel staff

Originally published July 22, 2011 at 5:23 PM

Page modified July 22, 2011 at 5:36 PM


The federal government has left the FAA in limbo — and that will save buyers of airline tickets some money since they won't have to pay federal taxes on tickets.


Starting Friday at midnight, airlines will not have the authority to collect federal excise ticket taxes since Congress adjourned Friday without approving an FAA funding measure.


Seattle-based Alaska Airlines estimates travelers could save about 14 percent on some airline tickets. And, said Alaska spokeswoman Bobbie Egan, the federal taxes will not apply retroactively. However, whenever Congress passes a stopgap funding measure for the FAA, the taxes will resume.


Taxes that won't be collected by Alaska (and other airlines) include:


• The 7.5 percent tax generally applicable to domestic transportation.


• A $16.30 international arrival/departure tax each way (for flights to Canada, Mexico or other foreign destinations).


• The $3.70 domestic segment tax.


• The $8.20 departure tax for flights between Alaska/Hawaii and the mainland U.S.


Some other taxes and fees, including the Sept. 11 security fee, still will be collected.


Thousands of FAA workers face furloughs because of the funding stalemate, but the U.S. air-traffic control system will not be affected.



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FAA Faces Shutdown Amid Budget Battle



JULY 22, 2011, 5:47 P.M. ET


The Obama administration is set to furlough 4,000 federal workers and stop payments to airport construction projects because congressional leaders failed to agree on a measure to keep the Federal Aviation Administration running.


About 4,000 FAA workers in 35 states, Puerto Rico and Washington, D.C. will be told to stay home starting Saturday, federal officials said. Air-traffic controllers, deemed essential employees, will continue to work.


The impasse could be a boon for the airline industry, which won't be required to remit federal ticket taxes during the partial shutdown of the FAA. JP Morgan analysts predicted airlines would pocket the revenue, rather than pass the savings on to consumers, and the industry could benefit by $25 million a day.


Airlines will no longer have to pay a 7.5% federal excise tax on each ticket, or a $3.70 tax applied to each flight segment. Arizona-based US Airways Group Inc. began adjusting fares Friday so that consumers would see no difference in ticket prices, even without taxes. Analysts expected other airlines to follow suit.


"What we're trying to do is to keep our fares competitive with the industry and we're being transparent now with consumers about pricing," said US Airways spokesman John McDonald.


The standoff over the FAA arose from a dispute between House Republicans and Senate Democrats over a GOP push to cut $16.6 million in taxpayer subsidies for 13 rural airports. The sum amounts to a fraction of total federal spending, but the airports involved are located in states represented by powerful Senate Democrats, including Majority Leader Harry Reid of Nevada and Commerce Committee Chairman Jay Rockefeller of West Virginia.


The GOP provision targeted a program known as "essential air service," long derided by conservatives as wasteful spending. It was included in a stop-gap measure passed by the House to renew the taxing and spending authorities of the FAA through mid-September.


The House adjourned Friday afternoon, forcing the Senate to pass the bill cutting the subsidy program, or force a partial shutdown of the FAA.


Senate leaders, defending the subsidies as crucial to local economies, stood their ground. Parts of the FAA were set to shut down Saturday for the first time in more than a decade.


An Obama administration official said the furloughed workers—including 1,000 workers in the Washington area—wouldn't be paid retroactively for time missed unless Congress passed a law to do so.


The FAA said the government would lose $200 million a week in tax revenue paid mostly by airlines.


"This is nothing less than a direct assault by Washington Republicans on already underserved rural communities—not only in Nevada, but across the country," said Zac Petkanas, spokesman for Mr. Reid.


House Transportation Committee Chairman John Mica (R., Fla.), who sponsored the bill to cut rural-airport subsidies, criticized the Senate for not passing his bill. "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," Mr. Mica said.



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