FAA Funding Deadlock in Congress Idles Construction From New York to Vegas

Congress’s impasse over the Federal Aviation Administration’s funding extension is stalling airport construction work from Memphis to Las Vegas, with hundreds of projects put on hold and thousands of workers idled.

John Yusunas, southwest district manager for Anderson Drilling, which is working on the foundation for a new air- traffic control tower at McCarran International Airport in Las Vegas, said he had 15 people working on July 22 when he got a call saying the job was on hold.

“The idea was we’d be back to work by the 29th,” Yusunas said. “From what I’m reading now it could be September.”

The U.S. House of Representatives and Senate recessed for the month of August without extending the FAA’s funding authority, which expired July 22. Without it, the agency can’t distribute $2.5 billion in grants to fund airport projects around the country, collect $28.6 million a day in aviation taxes or bring back 4,000 furloughed employees.

About 70,000 jobs in construction are hurt by the lack of funding, Transportation Secretary Ray LaHood has said, citing data by the Associated General Contractors of America. The data is based on a formula for construction spending, prepared by Stephen Fuller, a public policy professor at George Mason University in Fairfax, Virginia, said Brian Turmail, a spokesman for the Washington-based contractors group.

Of those jobs, about a third are construction workers, about 15 percent are suppliers and services and as many as half are linked to the construction sites, such as the corner store where a builder would buy a sandwich on break, Turmail said.

Rural-Airport Subsidies

On July 20, the House passed a bill by Representative John Mica, the Florida Republican who chairs the House transportation committee, that would extend FAA funding through Sept. 16 and end $16.6 million of subsidies for flights to 13 rural airports.

Senate Democrats have objected to Republican efforts to bring Mica’s proposed extension to a vote.

A broader issue is a separate four-year $59.7 billion FAA funding proposal, passed by the House in April. Before the bill was approved, President Barack Obama’s advisers said they would recommend vetoing it over a provision that would make it more difficult for labor unions to organize airline workers.

The Senate passed a $34.6 billion, two-year reauthorization measure in February.

Mica said yesterday he had added the rural air-service cuts as a “negotiating tactic” to conclude discussions on 12 unresolved issues between the two chambers -- not just the labor provision -- in the longer-term FAA authorization bill.

Resolving the Deadlock

Obama urged lawmakers yesterday to return to Washington to resolve the deadlock this week.

Because Congress hasn’t adjourned for the next month, each chamber could reconvene with only a few members present to approve legislation if all lawmakers in the body agree on that legislation beforehand. Still, the House is insisting that the Senate accept its measure and Senate Democrats are demanding that the House pass an extension without restrictions on aid to rural airports.

Congress needs to “come back from vacation” to pass an extension, LaHood said.

“Do not hold unemployed workers hostage because you have a difference or two,” LaHood said in an interview on Bloomberg Television today. “This is Congress’s job. Come back, do your job and then go on vacation.”

Forty “dedicated” airport-safety inspectors are working without pay or travel-expense reimbursement, LaHood has said.

‘Playing With Lives’

Alan Hayes, a manager with the FAA’s aeronautical information management group, is among the agency’s 4,000 furloughed employees.

“Don’t you realize you are playing with our lives?” Hayes, a federal employee for 29 years, wrote in an e-mail to the president and lawmakers. “I am married with two children and have a disabled parent living with me. I am already having financial problems because of the economy, and now I am out of work. And whose fault is it? Congress. Enjoy your time off WITH pay.”

Work has stopped on more than 200 projects, including the demolition of the old air-traffic control tower at New York’s LaGuardia Airport.

Memphis International Airport will need to borrow money or take out a line of credit to finish up projects that were dependent on FAA funding, said Larry Cox, chief executive officer of the Memphis-Shelby County Airport Authority, which runs the Memphis airport.

Interest Cost

“Not having the FAA fund available now means now we’re going to do not only the cost of construction but the interest cost of construction,” Cox said. “We’ll have to pass on our costs to the airlines, with higher landing fees and terminal rental fees.”

The airport had planned to get $16 million from the FAA for projects before July 30.

The construction of an air-traffic control tower at the Oakland International Airport, a project that employs about 60 people, has been halted, Isaac Kos-Read, director of external affairs for the Port of Oakland, which oversees the airport, said in a telephone interview.

The new tower is being funded with $31 million from the 2009 federal stimulus package, he said. Construction began last year and is slated for completion in 2013, Kos-Read said. The construction equipment that’s sitting idle on the site is costing $6,000 a day, he said.

$6,000 a Day

“This is a knock on our nation’s ability to get things done and not helping our ability to promote the airport,” Kos- Read said. “We’ve gone overseas to market our airport as a gateway for air service between China and the Bay Area. But this news about not being able to move forward on a basic piece of our infrastructure doesn’t help.”

In addition to federally funded airport construction, the FAA’s furloughed inspectors can’t sign off on other projects, such as a new school at a general aviation airport in Fort Wayne, Indiana, that’s seeking to begin classes next year, said Debby McElroy, a spokeswoman for Airports Council International - North America, an airport trade group.

The furloughs and halted construction projects come after the U.S. jobless rate rose to 9.2 percent in June. It probably remained unchanged in July, according to the median of 80 estimates in a Bloomberg News survey. The jobless data are due tomorrow.

In Las Vegas, unemployment was 13.8 percent in June. Most of the construction workers on the McCarran tower project aren’t working right now, said Anderson Drilling’s Yusunas. He said he’s been sending e-mails to members of Congress, asking them to renew FAA funding, even though he doesn’t think they’ll receive them during the recess.

“I just feel bad for the guys that have been off work for a couple of months and I can’t tell them when I can put them back to work,” Yusunas said.

To contact the reporters on this story: Christopher Palmeri in Los Angeles at cpalmeri1@bloomberg.net; Lisa Caruso in Washington at lcaruso7@bloomberg.net

To contact the editor responsible for this story: Bernard Kohn at bkohn2@bloomberg.net

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