Reid: Congress reaches deal to end FAA shutdown

Thursday - 8/4/2011, 9:42pm EDT

By JOAN LOWY
Associated Press

WASHINGTON (AP) - Congress has reached a bipartisan compromise to end a two-week partial shutdown of the Federal Aviation Administration that has idled tens of thousands of workers and cost the government about $30 million a day in uncollected airline ticket taxes, Senate Democratic leader Harry Reid said Thursday.

The deal would allow the Senate to approve a House bill extending the FAA's operating authority through mid-September, including a provision that eliminates $16.5 million in air service subsidies to 13 rural communities. Passage of the bill is expected Friday.

Senators have scattered for their August recess, but the measure can be approved if leaders from both parties agree to adopt it by "unanimous consent."

Republicans had insisted on the subsidy cuts as their price for restoring the FAA to full operation. But the cuts may become moot.

The bill includes language that gives Transportation Secretary Ray LaHood the authority to continue subsidized service to the 13 communities if he decides it's necessary.

Democrats said they expect the administration to effectively waive or negate the cuts.

"I just know that the White House has provided assurances that they (the communities) will be held harmless," said a Senate Democratic leadership aide who asked not to be named because he wasn't authorized to speak publicly about the deal.

But Adam Jentleson, a spokesman for Reid, said that "only LaHood can decide how he will use his waiver authority."

If President Barack Obama signs the bill over the weekend, FAA employees could return to work and payments for airport construction projects would resume on Monday, transportation officials said.

The shutdown began when much of Washington was transfixed by the stalemate over raising the government's debt ceiling. During that time, the FAA furloughed 4,000 workers but kept air traffic controllers and most safety inspectors on the job. Forty airport safety inspectors worked without pay, picking up their own travel expenses. Some 70,000 workers on construction-related jobs on airport projects from Palm Springs, Calif., to New York City were idled as the FAA couldn't pay for the work.

But airline passengers in the busy travel season hardly noticed any changes. Airlines continued to work as normal, but they were no longer authorized to collect federal ticket taxes at a rate of $30 million a day. For a few lucky ticket buyers, prices dropped. But for the vast majority, nothing changed because airlines raised their base prices to match the tax.

Some passengers will now be eligible for tax refunds if they bought their tickets before July 23 and their travel took place during the shutdown.

As the debt ceiling crisis passed and Congress headed home for its August recess without resolving the standoff, Obama spoke out Wednesday and LaHood urged Congress to return to deal with the issues. Obama expressed dismay that Congress would allow up to $1.2 billion in tax revenue to go out the door _ the amount that could have been lost by the time lawmakers return in September.

Reid announced the deal Thursday afternoon, saying it would put 74,000 transportation and construction workers back to work.

"This agreement does not resolve the important differences that still remain. But I believe we should keep Americans working while Congress settles its differences, and this agreement will do exactly that," Reid said.

Republican Sen. Tom Coburn of Oklahoma won't attempt to block passage of the bill when it comes up on Friday, spokesman John Hart said. Coburn blocked several attempts by Democrats to pass an extension bill without the subsidy cuts.

"The delay was the result of members wanting to protect their parochial interests," Hart said in an email.

The partisan standoff that led to the shutdown began last month when Rep. John Mica, R-Fla., the chairman of the House Transportation and Infrastructure Committee, signaled his intention to attach the subsidy cuts to a bill to extend FAA's operating authority through mid-September. The agency has been operating under a series of 20 short-term extensions since 2007, when the last long-term FAA funding bill expired.

Senate Democrats complained that Republicans were breaking precedent by using an extension bill to enact policy changes that hadn't been agreed upon. Even Republican Sen. Kay Bailey Hutchison of Texas called the measure a "procedural hand grenade." Senators refused to pass the House bill, saying to do so would be giving into legislative blackmail and inviting Republicans to up the ante on the next extension bill.

Obama, who had scolded Congress on Wednesday for not solving the standoff, expressed relief.