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FAA shutdown: the economic toll

FAA shutdown is partial: Air-controllers still working, but airport building projects suspended. No immediate solution in view for FAA shutdown.

Transportation Secretary Ray LaHood talks about the possible shutdown of the FAA during a news conference in Washington July 21, 2011. The FAA shutdown has halted airport construction projects as a political impasse over reauthorization continues.

Susan Walsh/AP

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WASHINGTON – In Traverse City, Mich., work on replacing a 30-year-old air traffic control tower at Cherry Capital Airport has been halted. The job was about 40 percent completed, and crews had planned to lift the "cab" section to the top of the tower this week, airport manager Kevin Klein said.

But that was before a legislative stalemate between Republicans and Democrats in Congress forced the partialshutdown of the Federal Aviation Administration, the furlough of nearly 4,000 federal workers and the issuance of stop-work orders for dozens of airport construction projects across the country.

"It's very frustrating," Klein said. "It puts about 50 construction workers out of a job. But about 200 people are involved in this some way — designers, engineers, vendors, delivery folks. It's going to be a hardship on them."

The FAA has also told airports to stop work on the installation of runway status lights, a new safety system aimed at preventing planes from colliding on the ground or taking off or landing on closed runways. At McCarran International Airport in Las Vegas, construction officials were told Monday that they have until the end of the week to wrap up their work and then stop. Construction on a new airport tower has also been delayed.

"It's depressing," said Sasha Milosavljevich of Archer-Western Contractors, whose company broke ground June 2 on a new 352-foot control tower at McCarran. "You got a site that was flourishing with activity and there's nothing going on right now."

Prospects for quickly ending the legislative dispute between the House and Senate appear grim, with neither side signaling willingness to compromise. The FAA's operating authority expired last week. Air traffic controllers have continued to work, as well as FAA employees who inspect the safety of planes and test pilots.

Transportation officials have said safety won't be compromised. But it was unclear how long the FAA can continue day-to-day operations before travelers begin to feel the effects of the shutdown.

Rep. John Mica, R-Fla., chairman of the House Transportation and Infrastructure Committee, said there have been no negotiations between the House and Senate to resolve the dispute.

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Republican leaders said they are determined to hold to their position that the Senate must accept a House-passed bill to extend FAA operations through mid-September even though it contains a provision eliminating $16.5 million in air service subsidies for 13 rural airports. Democrats say that provision is unacceptable.

"This is sort of sad, you know," Mica told reporters. "On the eve of the country's finances near collapse, it's sort of symbolic of the whole problem here — no one is willing to eliminate any wasteful programs."

The subsidy program was created after airlines were deregulated in 1978 to ensure continued service on less profitable routes to remote communities. Not all those communities are remote anymore. The GOP provision would end subsidies to communities less than 90 miles from a hub airport or where subsidies average greater than $1,000 per passenger.

Democrats said the real issue is that Republicans are insisting Democrats accept a host of controversial provisions added to a long-term FAA spending bill approved by the House in April. Among their key differences is a GOP proposal sought by industry that would make it more difficult for airline workers to unionize.

The Senate passed its own long-term funding bill in February without the labor provision. Democrats insist the House must drop the provision. They've also accused Republicans of tying the elimination of rural air subsidies to their extension bill as a means to prod Democrats to make concessions on the labor issue.

"House Republicans are nowhere to be found, refusing to come back to the negotiating table after pulling yet another cheap political stunt at the expense of rural Americans," Senate Majority Leader Harry Reid, D-Nev., said in a statement.

The shutdown is costing the FAA about $30 million a day in lost revenue because airlines no longer have authority to collect ticket taxes. That money goes into an aviation trust fund. The fund "has a healthy balance now, but that would be depleted in fairly rapid order" without congressional action, FAA Administrator Randy Babbitt said.

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Associated Press writers John Flesher in Traverse City, Mich., and Cristina Silva in Las Vegas contributed to this report.

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