The flying public and certain employees of the Federal Aviation Administration will not have to face a continuing period of uncertainty with Congress agreeing August 4, 2011 to reauthorize agency funding. Lawmakers had not acted to do that prior to adjourning and the impact of the partial FAA shutdown was felt in several notable areas.
Because the House and Senate had not extended FAA tax and spending authority by July 23, federal aviation taxes on airline fuel and tickets expired as of that date. The FAA’s Airport and Airway Trust Fund had been estimated to lose as much as $1.2 billion had the inability to collect the taxes remained through the end of the August congressional break.
Passengers allowed to seek fare refunds
What might have seemed a price advantage for passengers did not materialize during the partial shutdown. When the taxes expired, flyers did have to pay the 7.5% excise tax on U.S. domestic plane tickets, a $3.70 domestic fee for each flight segment, an international travel facilities tax of $16.30 per person for flights that originate or end in the United States, or $8.20 per person for a flights that begin or end in Alaska or Hawaii.
Without being able to charge these taxes, many airlines had maintained approximately the same overall fares though had kept the money they normally would have to give the government.
“Outraged lawmakers have seized on the airlines’ pricing as reprehensible behavior, given the potential savings to customers. Their anger is somewhat disingenuous as well. Since the Airline Deregulation Act of 1978 took effect, airlines have been well within their rights to price their tickets at any point that a passenger will pay,” Fawn Johnson said in “The Apoplectic & the Aloof, FAA Style,” in National Journal Daily, August 2, 2011.
Business and leisure passengers with tickets purchased before July 23 and used during the shutdown were potentially eligible for a refund of taxes they had paid on the tickets, whether they had to contact individual airlines or the Internal Revenue Service. But it was not clear all airlines would have made refunds.
Some employees forced to meet own expenses without pay
Another consequence of the FAA funding curtailment, which occurred as Congress was contending with passage of the bill raising the nation’s debt ceiling, was the unpaid furlough of nearly 4,000 “nonessential” workers and the requirement that other “essential” employees continue unpaid.
“Dozens of airport inspectors have been asked by the FAA to work without pay and to charge their government travel expenses to their personal credit cards to keep airports operating safely. Air traffic controllers and airplane inspectors, who are paid with separate accounts, have continued to work, but workers who oversee research on aviation systems, grants for airports and facilities, and operations equipment have been furloughed,” Edward Wyatt noted in “Stalemate in Congress will keep FAA hobbled into Sept.,” in the August 3, 2011 New York Times.
Not all airport safety inspectors were affected. “Aviation-safety inspectors responsible for overseeing the airline industry are paid out of the operations budget and have not been furloughed, said Kori Blalock Keller, spokeswoman for the Professional Aviation Safety Specialists, which represents those employees,” Emily Long wrote in “FAA Safety Inspectors Paying Dearly for Congressional Inaction,” in Government Executive, August 3, 2011.
But the congressional funding delay cost jobs for the 4,000 agency transportation employees and some 70,000 construction workers as the FAA stopped airport construction projects funded from the aviation taxes, with employees of private contractors out of work as well.
“In addition to airport renovation and expansion projects, the furloughs put a halt to work on a complex navigation system that is seen as the future of the aviation system,” Ashley Halsey III said August 2, 2011 in “Congress heads home without extending FAA funding” in the Washington Post. “Funding for both aviation and surface transportation traditionally is wrapped into comprehensive spending packages of several years duration, giving comfort to those who build long-term projects--highways, airports--that the money is committed.”
Ongoing disputes led to FAA funding impasse
A number of factors are behind the funding delay. The FAA’s funding authority expired in 2007, and the agency has relied on a total of 20 temporary extensions since then as Congress could not agree on long-term authorization of its budget.
One of the issues dividing Republicans and Democrats is the unionizing of airline and railroad employees which Republicans want to make harder to accomplish. The most recently proposed House extension was opposed by Democrats for removing different airports from the Essential Air Service (EAS) program subsidizing rural air facilities.
The agreement the House and Senate reached on a House-passed funding extension for the agency does not settle any of the remaining differences.
"But the issue might have to be revisited soon," Adam Snider said in "Senate to Take Up House FAA Extension, Ending Standoff Over Lost Tax Revenue," in the August 5, 2011 Daily Report for Executives. "The House bill extends FAA policies and authorities through Sept. 16, leaving lawmakers less than two weeks to pass another extension after returning to town from the August recess."
Congress had faced growing pressure to move on the funding at hand. The Senate and House will not convene again for legislative business until early September. Proponents of action on the FAA before then pointed out lawmakers wouldn’t have to return to Washington to authorize funding but could reach a procedural agreement to do so through unanimous consent, which is what both the Senate did in approving the interim House measure to allow agency operations to proceed.
Sources:
- Adam Snider, “Senate To Take Up House FAA Extension, Ending Standoff Over Lost Tax Revenue,” Daily Report for Executives, Bureau of National Affairs, August 5, 2011
- Ashley Halsey III, “Congress heads home without extending FAA funding,” Washington Post, August 2, 2011
- Fawn Johnson, “The Apoplectic & the Aloof, FAA Style,” National Journal Daily, August 2, 2011
- Edward Wyatt, “Stalemate in Congress will keep FAA hobbled into Sept.” New York Times, August 3, 2011
- Emily Long, “FAA Safety Inspectors Paying Dearly for Congressional Inaction,” Government Executive, August 3, 2011
John Seidenberg - John Seidenberg has worked on newspapers, newsletters, radio news, and produced specialized news publications as well as freelance ...
