Cynical Synapse

Wed, 03 Aug 2011

Dollar-Foolish, Dysfunctional Congress Goes on Vacation

Filed under: Behavior, Business, Congress, Economy, Flying, Government, Indecision, Michigan — cynicalsynapse @ 9:43 pm

Oakland International tower construction

Our penny-wise, dollar-foolish, dysfunctional so-called representatives (Congressmen and Senators) in Washington barely managed to cobble together a debt ceiling deal before the economy tumbled into the abyss. Then they went home for a month-long vacation, leaving the Federal Aviation Administration (FAA) without appropriations to operate. As a result, about 4,000 FAA employees are on furlough, meaning they don’t work and they don’t get paid. How many of them, do you suppose, live paycheck to paycheck? How many of our elected officials will help them out during their involuntary layoff? Add to that another estimated 70,000 construction workers idled by stop work orders on various FAA-funded projects. They’ll all collect unemployment, thus adding to the cost of doing business and the cost of government. The 74,000 laid off will also skew the jobless numbers, which will affect stocks and other aspects of the economy.

The previous FAA reauthorization expired 22 July. There has been no long-term (meaning 2-4 years) for the FAA since 2007. Meanwhile, some airlines have raised ticket prices, pocketing the previous tax amounts the government is not, presently, collecting. Do you suppose they’ll lower prices when the taxes come back on line? If you do, just start sending your checks to me—it’s more productive than just burning your cash.

Boarding a plane in Iron Mountain

At issue in the debate are, essentially, two fundamental aspects. The most publicized is the Essential Air Service (EAS) subsidy, which pays airlines to provide commercial service to largely remote areas. In Michigan, that affects 8 airports with EAS subsidies:

City Airport Enplanements Non-EAS District
Alpena Alpena County 7,519 87 mi (Charlevoix) 1—Benishek (R)
Escanaba Escanaba 5,307 56 mi (Sawyer) 1—Benishek (R)
Houghton Houghton County 25,354 68 mi (Sawyer) 1—Benishek (R)
Iron Mountain Ford Airport 3,998 59 mi (Sawyer) 1—Benishek (R)
Ironwood Gogebic-Iron County 1,524 68 mi (Rhinelander) 1—Benishek (R)
Manistee Manistee County-Blacker 2,087 50 mi (Cherry Capital) 2—Huizenga (R)
Muskegon Muskegon County 30,051 40 mi (G R Ford) 2—Huigenga (R)
Sault Ste. Marie Sault Ste. Marie 13,269 90 mi (Charlevoix) 1—Benishek (R)

The other key point of contention is an “anti-union provision in the House bill. At best, airlines, and in particular, Delta’s labor practices leave much to be desiredIn reality, this is a partisan matter with Republicans taking the nuclear option. Democrats paint this as Republican anti-unionism, largely at the behest of Delta Airlines.

When the House version of the bill, HR 658, passed, the vote was 223-196, largely along party lines. In Michigan’s delegation, only Justin Amash (R-03) voted against his party’s view. What’s interesting is the 8 Michigan airports at risk in the EAS are all in Republican districts, which voted in favor of ending the subsidies. Six of the eight at-risk airports are in Dan Benishek’s First District, but he spun it this way:

This FAA bill funded the EAS for two-and-a-half years. So that would be stable funding for two-and-a-half years rather than a few months at a time. I think it’s a good program and I’m all for it. As far as I was concerned, it was a vote for the program.

I can see clearly now

So, let me see. Benishek votes against the FAA reauthorization, but it’s really a vote for the Essential Air Service program. Reminds me of “These are not the droids you’re looking for.” Is anyone else confused by this? That said, however, the travel distances to “non-essential” air service facilities seems to justify ending this taxpayer subsidy. Heck, I live in metro Detroit and it takes me about 45 minutes to get to Detroit Metro. Suck it up and drive an hour to another airport.

Interestingly, Rep. Justin Amash (R-MI-03), a Tea Party freshman from Grand Rapids, broke party lines and voted against HR 638. He’s the only Michigan representative that didn’t vote with his party. Apparently, he was opposed to the general fund subsidy, according to Amash’s Facebook post:

[Justin Amash] just voted no on H R 658, FAA Reauthorization and Reform Act. The bill authorizes FAA activities through 2014. Under the bill, the authorized FAA spending level is flat-lined at the FY 2008 level for FY 2012-2014. That is a savings of $495 million per year over current spending. Even so, the bill relies on subsidies from the general fund to cover about 25% of total costs. The bill passed 223-196.

lost tax reveuesn

Even worse than the impact on jobs are the lost tax revenues. Several taxes are no longer in effect because the FAA authorization bill remains unpassed and the previous reauthorization expired 22 July. As a result, the US Treasury is missing out on $20 million per day, an amount that will exceed $1 billion if reauthorizing the FAA stretches into September. Meanwhile, some airlines have raised ticket prices, pocketing the previous tax amounts. Do you suppose they’ll lower prices when the taxes come back on line? If you do, just start sending me your paychecks; it’s more productive than just burning your cash.

In a nutshell, Congress’ failure to reauthorize the FAA is reckless partisan politics at its worst.

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