|Background: When the FAA's authorization ran out on July 22, the agency became unable to collect airline ticket taxes, which provide about $30 million in revenue each day. Without that money coming in, the agency furloughed non-essential employees. Air traffic controllers are still working under normal conditions, but FAA safety inspectors are now working without pay, hoping to be reimbursed by the agency once Congress resolves this dispute.
The FAA also issued stop work orders on more than 250 construction or facility improvement projects around the country. Those don't immediately apply to any Iowa airports, but a long standoff over FAA funding could hamper future construction plans, such as a runway improvement project scheduled to happen in Des Moines next year. Airline ticket taxes support the Aviation Trust Fund, and a big hit to that fund's revenue could delay support for construction projects around Iowa. Citing the Iowa Department of Transportation, a press release from Representative Dave Loebsack's office on August 2 said "there are currently over 40 [federal] grants valued at $20 million pending at airports in Iowa for important aviation projects." I've listed the affected airports at the end of this post.
Congress has approved 20 short-term reauthorizations for the FAA since 2007. A long-term reauthorization bill that cleared the Republican-controlled House this year would allocate $59 billion to the FAA over four years, which corresponds to 2008 funding levels. The Democratic-controlled Senate's FAA reauthorization bill is more generous, providing $34.5 billion to the agency over just two fiscal years.
Two obstacles are blocking a compromise on FAA funding. First, the Republican version of the bill includes a labor provision that's unacceptable to Senate Democrats:
At issue are rules adopted last year by the National Mediation Board that make it easier for workers to unionize.
Under the NMB's rules, only votes in favor of or against forming a union count in an election - previously, employees who did not vote in a union election were counted as votes against forming a union. That created a much bigger hurdle for a union to organize.
In late March, the White House said President Barack Obama would veto a bill containing that labor provision. I wouldn't trust the president to stand by that threat. This is the person who said he couldn't support a debt ceiling hike bill with $2 trillion in spending cuts and no tax increases. But Senate Democrats appear to be serious about keeping the anti-union measure out of the FAA bill.
Delta Airlines appears to be an important lobbying force behind Republican resistance to the new labor rule. The biggest U.S. airline since its merger with Northwest, Delta is largely non-union (except for pilots and dispatchers). In contrast, several other major U.S. airlines have had unions for decades.
The second sticking point relates to the Essential Air Service program, which subsidizes flights to about 150 small airports around the country. The House bill would start cutting that program right away and would phase it out completely in 2013. The Senate would make only minor cuts to the program.
Three Iowa airports currently receive Essential Air Service support: Burlington, Mason City, and Fort Dodge. Delta Airlines recently announced plans to drop Fort Dodge and Mason City from its service, and according to Senator Tom Harkin, the airline is seeking federal support to continue service to Sioux City and Waterloo. Harkin has urged Democratic Senator Jay Rockefeller to make sure Essential Air Service is preserved, along with the right of cities like Sioux City and Waterloo to join the program later.
Reasonable minds can differ on the merits of federal subsidies for serving small airports. As this discussion shows, even pilots disagree on the matter. But shutting down the FAA over this disagreement makes no sense at all. The entire Essential Air Service program costs a little less than $200 million per year. Lost revenue to the FAA since July 22 already exceeds that number. If Congress waits until after Labor Day to extend the FAA's authorization, the lost revenue will exceed $1.2 billion.
Senate Democrats want the House to approve a "clean" short-term extension of FAA authorization, without the labor or Essential Air Service provisions. House and Senate leaders could pass a short-term bill even while Congress is in recess, using procedural maneuvers during "pro-forma sessions." Senate Majority Leader Harry Reid wants to take that route, but so far House Speaker John Boehner is not interested. Boehner contends that the Senate should pass what the House approved before the summer recess. The last short-term FAA bill that cleared the House didn't include the labor provision but did have some cuts to Essential Air Service.
Federal support for small airports is likely to become a 2012 campaign issue. The Democratic Congressional Campaign Committee sent out press releases yesterday blasting House Republicans Tom Latham (IA-04) and Steve King (IA-05) for supporting cuts to the program. Latham and King voted for the House long-term FAA reauthorization bill earlier this year, while all three Iowa Democrats voted against it. Fort Dodge and Mason City are in Latham's district now but will be in King's district (the new IA-04) during the 2012 campaign. Burlington, Iowa's third Essential Air Service airport, is in the second district, represented by Loebsack. Iowa airports with the potential to receive future subsidies, Sioux City and Waterloo, in are in Steve King's and Bruce Braley's districts, respectively.
Final note: Representative Leonard Boswell, who will be running against Latham in the new IA-03 next year, was among 90 House members to sign a letter this week "urging major airlines to stop charging customers for aviation taxes that they do not pay while the FAA is shut down and to return the overcharges." From an August 3 press release:
There are recent reports that airlines are increasing base fare prices to include the cost of aviation taxes, instead of passing the same savings they are receiving to their consumers.
"I have joined with my colleagues in the House to ask member airlines of the Air Transport Association (ATA) to stop taking advantage of the FAA shutdown and to give consumers a break by not charging them for the aviation taxes that they are no longer paying themselves," said Boswell, a senior Member of the House Transportation and Infrastructure Committee. "This is profiteering off of a shutdown that is already costing taxpayers billions in lost revenue and furloughing thousands of hard-working Americans. This behavior by the major airlines is nearly as disgraceful as the Speaker adjourning the House early instead of working with the Senate and President to put an end to the FAA shutdown."
The Congressman sent a letter with 90 of his colleagues to Richard Anderson, ATA Chair and CEO of Delta Air Lines, asking him to work with the major airlines to make sure they charge the same base fare price they did before the shutdown and to refund travel excise taxes to consumers who wrongfully paid for them when companies were not required.
Any relevant comments are welcome in this thread.
Excerpt from a Loebsack press release, August 2:
According to the Iowa Department of Transportation (IDOT), there are currently over 40 grants valued at $20 million pending at airports in Iowa for important aviation projects. Further delay may move the start of airport projects to the 2012 construction season. A list of impacted communities is below.
LATE UPDATE: The FAA shutdown delayed planned upgrades at the Southeast Iowa Regional Airport in Burlington, possibly until after the winter.