Congress departed Washington, D.C., for its annual summer break without passing an extension of funding authorization for the Federal Aviation Administration (FAA). This failure has resulted in significant disruption to construction projects and job losses in the industry.
The problem dates back to 2007 when the original bill expired. Since then, the FAA had been running on 20 short-term extensions. Unfortunately, a political impasse over service to rural airports and some labor provisions has led to a roadblock, preventing the legislation from moving forward. The House passed legislation for a 21st extension that included cuts in service to rural airports, but this bill failed to pass the Senate. The Senate has not passed an alternative that would keep the FAA programs operating.
- 70,000 jobs are at risk by forcing a halt to $2.5 billion worth of airport construction projects (approximately 24,000 construction workers, 11,000 workers in related service and supply businesses, and as many as 35,000 jobs in the broader economy).
- The construction industry is in the fifth year of a downturn that has resulted in the loss of 2.2 million construction jobs.
- Lack of authorization has resulted in the furlough of 4,000 FAA employees, the expiration of authority to collect the airline ticket tax that funds the aviation trust fund and stop work orders on a multitude of ongoing construction projects funded through FAA?s Airport Improvement Program. It has also prevented local airports from moving forward with an additional $2.5 billion in pending FAA-funded construction contracts.
- Taxpayers are suffering because of this shutdown because the cost of the airport construction projects is likely to increase as contractors have to add the cost of securing projects and resuming work to the final bill.
- A multi-year aviation bill will add certainty to the market, ensuring the best choices will be made to prioritize investment decisions.
- The partial shutdown impacts more than just federal workers. The FAA had to stop hundreds of airport construction projects nationwide, which means some 24,000 construction workers are also out of work. Another 35,000 support workers, such as food service vendors, are also impacted, said Steve Sandherr CEO of the Associated General Contractors of America. KPAX – Missoula (8/2)
- About 24,000 construction workers — in an industry already hit hard by the recession — have lost work or their jobs because of the projects' suspension, says Brian Turmail, a spokesman for the Associated General Contractors of America. The trade group says the construction industry's unemployment rate was 16% in June when jobs totaled 5.5 million — 2.2 million less than the industry's all-time high in April 2006. USA Today (8/4)
- The Diane Rehm Show (8/3)
- The work stoppage will have a direct impact on about 24,000 construction workers engaged in those projects, indirectly impact 11,000 others and hurt 35,000 support workers, such as food service vendors, said Steve Sandherr of Associated General Contractors of America. CNN (8/2)
Associated General Contractors
- July 27, 2011 - Media Event at LaGuardia Airport
- July 26, 2011 - AGC Letter to U.S. House and U.S. Senate
Federal Aviation Administration
Transportation Construction Coalition (TCC)
- July 28, 2011 – TCC Letter to U.S. Senate
Graphs breaking down state and local air transportation construction into passenger terminals; runway pavement and lighting; and “other,” which U.S. Census Bureau says includes pavement and lighting, hangars, air freight terminals, space facilities, air traffic towers, aircraft storage and maintenance buildings.
Runway construction totaled $3.6 billion at a seasonally adjusted annual rate in June and “other” totaled $573 billion. That suggests as much as $4 billion of current work is at risk of shutdown.
Negotiations on a long-term Federal Aviation Authorization (FAA) bill, H.R. 658, which has been passed by both the House of Representatives and the Senate have stalled over a few outstanding issues. The most contentious of these is whether to keep a provision from the House passed bill that overturns a ruling by the National Mediation Board that brings union representative election vote-counting procedures under the Railway Labor Act in line with the more union friendly rules under the National Labor Relations Act.
While Congress has been working on passing a multiyear FAA authorization, they have enacted 20 extensions to keep the FAA operating. The latest extension passed by the House, H.R. 2553 included provisions to cancel federal Essential Air Service subsidies for rural airports. The Senate has refused to take up the House passed extension because of this provision and have failed to bring a “clean” extension of the current authorization to the Senate Floor for a vote.
Although, the House of Representatives and the Senate have both left for their August recess, they remain in a “pro forma” session, which allows them to pass an extension before they return to Washington after Labor Day.
- H.R.658: FAA Air Transportation Modernization and Safety Improvement Act
- House passed FAA authorization bill passed April 1, 2011 (223 - 196)
- Senate passed FAA authorization with amendment
- H.R.2553: Airport and Airway Extension Act of 2011, Part IV
- House passed FAA authorization extension July 20, 2011, (243 - 177)
- S.1387: Airport and Airway Extension Act of 2011, Part IV
- Senate extension, no major action