The Ticket

How airlines are pocketing more customer cash during FAA shutdown…UPDATE: Reid announces deal

Chris Moody, Yahoo News
The Ticket

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Frank Augstein (AP)

Update: Senate Majority Leader Harry Reid announced a deal to end the FAA shutdown Thursday afternoon, the The Hill newspaper reports. The Senate is expected to vote Friday.

Lawmakers may have left Washington, D.C., in a hurry for a six-week holiday—but that doesn't mean they finished their work. Swamped with the fight over the debt ceiling, the House and Senate failed to extend funding for the Federal Aviation Administration. Now thousands of employees are out of work because of it, and will likely continue to be until September.

The good news is that your summer travel plans shouldn't be delayed or canceled due to Congress stranding the FAA. But the inability of lawmakers to fulfill their most basic duty--that is, keeping the government funded--puts a major strain on workers who have nothing to do with the battle in Washington, and is even forcing some of them to go on government assistance.

But before you write an outraged letter to your congressman, you might want to save some of that energy for the airlines. Get this: Since the FAA cannot collect taxes during the partial shutdown, airlines don't have to pay them. That means cheaper fares for customers, right? Nope, the airlines are still collecting the fees (from you); they're just not turning them over to the government. They're pocketing the extra profits.

While the FAA waits for Congress to get their act together, the agency has furloughed 4,000 employees and placed hundreds of airport construction projects on stand-by mode, which could cost up to tens of thousands of jobs in the short term. There are even 40 FAA safety inspectors who continue to work without pay, and are paying out of pocket for work-related expenses like hotel costs and airfare.

Until Congress finds an agreement--which likely won't happen until lawmakers return from their vacations in September--the federal government is expected to lose out on more than $1 billion in tax revenues from their inability to collect from airlines.

The House passed a stop-gap measure to fund the FAA for the short-term months ago. It has stalled in the Senate over disagreements involving funding for rural airports.

The White House has urged lawmakers to return to Washington to fix the problem, but the prospect for a recess session seems more unlikely by the day.

ABC News has more:

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