FAA cuts could trigger $20 billion blow to national economy

Monday - 8/13/2012, 10:54pm EDT

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Aerospace Industries Association press briefing and discussion

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By Amanda Iacone
Federal News Radio

Shaving $1 billion from the Federal Aviation and Administration's budget as part of sequestration could cost the U.S. economy $80 billion a year by 2035, according to a new study released by the Aerospace Industries Association.

The number of air traffic controllers would drop, the number of flights that can take off and land would drop, and the location and availability of flight service for Americans traveling for business or leisure would taper off as well, said Stephen Mullin, vice president and principal of Econsult Corporation, which studied the economic impacts of sequestration for the aerospace association.

Cargo and air freight shipments would likely decrease and costs would rise for businesses trying to ship their products, forcing companies to find alternative shipping options or to absorb the higher costs.

Cuts made to the FAA's current budget would cost the economy $10 billion to $20 billion a year in the short-term compared to $80 billion a year over the next 25 years. Additionally, about 66,000 to 132,000 jobs throughout the economy would be lost annually.

Over the long term, Mullen said, the cuts would hinder the FAA's ability to continue paying to roll out NextGen, an innovation program that aims to improve aviation technology like replacing ground-based air traffic controllers with satellite systems. As many as 700,000 to 1.3 million jobs would be lost through the country's economy by 2035.

Transportation studied unveiled

Former Secretary of Transportation Norman Mineta spoke at the association's unveiling of its study Monday. He said sequestration would undo the multiple years of work it took to convince Congress to pass a reauthorization act that included modernization and reform programs like streamlining certification of new aircraft, integrating unmanned aircraft in civil air space and implementing NextGen.

"Congress may allow the nation to lose the resources that are needed to make this progress a reality. Sequestration will simply evaporate what Congress and the FAA so painstakingly planned to do in the next four years. Sequestration simply makes no sense," Mineta said.

He said the country cannot cut its way to prosperity and that Congress' cuts-only approach is misguided because it limits investments in innovation and research for the future.

Mineta said the cuts to the FAA and the Transportation Security Administration would also reduce safety and efficiency, and jeopardize Americans' faith in the nation's aviation system.

After the Sept. 11 terrorist attacks, Mineta said he faced the challenge of rebuilding Americans' trust in the aviation system. He predicted the cuts to the FAA and TSA would damage that faith in the safety and security of flying in the United States.

"We're here today because our air transportation system, the envy of the world, is about to fall victim to a political meat cleaver called sequestration. If I had one message to give to the leaders of both parties in Congress it would be this: Read this report," Mineta said.

Mineta said the cuts due to sequestration would close 246 airport control towers and lay off 1,200 air traffic controllers, 2,000 TSA screeners and 1,600 customs inspection officers.

The association's President and CEO Marion Blakey urged stakeholders to push Congress to come up with a bipartisan plan that addresses tax and entitlement reform that does not impose what she called "a big hit" to the FAA's budget.

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