The Federal Aviation Administration (FAA) was recently forced to partially close and send employees home without pay because House Republicans, concerned about spending and the federal budget, didn’t want to extend $16.5 million in subsidies to the agency. The shutdown is costing government $30 million a day in much needed revenue from airline taxes; in other words, shutting down government costs significantly more than trying to make it work. It might be a preview of what will happen if the House GOP gets its way (underfunded, poorly functioning government) or if it doesn’t (government shutdown and chaos). As Congress fights over how to raise the debt ceiling, it might be worthwhile to wonder which programs will get cut and which will not.
The drastic steps — which affect 4,000 “non-essential” employees (basically, everyone except the air-traffic controllers) — came on Friday after House Republicans refused to extend the authority of the $16 billion agency unless House Democrats agreed to remove a small subsidy intended for rural aviation that helps hundreds of small towns, farms, and other rural areas.
This means that, while flights can get off the ground, billions of dollars in airport construction projects has come to a halt, also costing workers their jobs.
At first, some believed that the freeze on tax collections would translate into lower ticket prices. Instead, airlines — which have struggled recently — have kept prices steady , effectively collecting 7.5% more in profits for themselves.
Considering the impact of the closure of a single federal agency is so widespread, imagine what would happen in the event of a U.S. default. If multiple agencies partially shutdown, it could cut a giant hole in the national debt the size of a massive government program. The Republican recalcitrance over the debt ceiling threatens thousands of American jobs by jeopardizing government agencies and slowing projects throughout the country. The FAA’s current state is a dismal warning of what might come next.
Copyright 2011 The National Memo