Congress reaches deal to end FAA shutdown

Congressional leaders struck a deal on Thursday to resolve a partisan dispute and end a partial shutdown of the Federal Aviation Administration that has halted airport projects and threatened thousands of jobs.

The standoff, which began on July 22, centered on partisan differences over full funding of the agency through the middle of next month.

In addition to idled construction projects, the gridlock allowed airlines to stop collecting more than $30 million per day in ticket taxes, leaving a hole in government revenue for aviation priorities but giving carriers a big windfall.

"I am pleased to announce that we have been able to broker a bipartisan compromise between the House and the Senate," Senate Majority Leader Harry Reid said in a statement.

Reid said the deal did not resolve underlying differences that held up the latest in a series of stop-gap FAA funding extensions and that they could re-emerge later.

This extension and others approved since 2007 authorize the FAA to tap available funds from a federal trust account that is funded by ticket taxes to help cover some of the agency's costs. The temporary extensions aim to bridge the gap to a long-delayed bill still being negotiated on long-term FAA budgeting and aviation priorities.

The agreement announced by Reid essentially found a route around contentious issues, allowing the Senate to pass the temporary measure, which had previously been cleared by the House of Representatives.

Democratic aides said formal action will occur on Friday after the Senate convenes at 10 a.m. EDT.

Congress adjourned this week for August so the Senate will use a procedure not requiring lawmakers to return for a vote.

Transportation Secretary Ray LaHood called the prospect of passage a "tremendous victory" for workers.

The nearly two-week shutdown affected some 70,000 jobs related to airport construction and nearly 4,000 FAA positions that were placed on furlough, government officials said.

PRESSURE FROM OBAMA

Compromise came after President Barack Obama stepped up pressure on lawmakers already bruised by weeks of partisan wrangling over legislation to raise the U.S. debt limit.

The FAA impasse hinged on cutting more than $16 million in subsidies for rural air service -- a demand by the Republican-led House that rankled key Senate Democrats like Reid, Finance Chairman Max Baucus and John Rockefeller, chairman of the Commerce Committee.

Congressional and transportation officials said the linchpin of the compromise gives LaHood authority to waive cuts in service to rural airports targeted in the bill, raising the prospect that some or all of the cuts will not be made.

"He will use that authority where appropriate under the law," a senior Transportation Department official said.

Rockefeller warned of another possible showdown with Republicans over funding and aviation priorities. Congress returns from its recess in early September.

An underlying issue not in the temporary extension but looming large for Rockefeller and other labor-friendly Democrats in a long-term FAA bill is a bid by House Republicans to gut a rule making it easier for unions to organize at airlines.

The end of the impasse also will mean the end of a revenue windfall for U.S. airlines. With no legislation in place to authorize FAA funding, carriers were not required to collect a 7.5 percent passenger tax assessed on tickets.

Most, like Delta Air Lines, American Airlines, US Airways and Southwest Airlines, raised fares by that amount and stood to earn more than $1 billion had the shutdown lasted until Congress returned.