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Economy

How Piecemeal Fixes Will Make Sequestration Worse

Photo credit: The Memphis Flyer

A report out today from the Democrats on the House Appropriations Committee shows costly new flaws in Congress’ approach to fiscal policy. Beyond providing updated information on the anticipated impacts to specific programs from the across-the-board spending cuts known as sequestration, the report shows Congress’s piecemeal approach to “fixing” sequestration is more than just unfair – it’s costing the U.S. more money.

Since the threat of sequestration failed to spark a spending compromise and the haphazard slashing began, lawmakers have faced uneven amounts of pressure to replace chunks of sequestration cuts from varying groups. The success of that pressure seems to hinge on the political influence wielded by the group affected by a given cut. Unemployment beneficiaries, Head Start students and parents, 140,000 families on housing assistance, and seniors who rely on Meals on Wheels, among many other politically marginalized groups, have received no relief from sequestration.

Business travelers, on the other hand, have seen their outcry over airport delays due to sequestration yield a “fix” for the Federal Aviation Administration.

Today’s report goes beyond that unfairness to explain how the piecemeal “fix” to avert flight delays is actually raising the economic costs of aviation delays, by tens of billions of dollars:

The [Reducing Flight Delays] Act [of 2013] allowed the FAA to apply sequestration to the Airport Improvement Program (AIP), which had been exempt in the original sequestration order. […]

Cutting the AIP program slows FAA’s ability to meet construction needs. FAA estimates that development needs at eligible airports will exceed $42.5 billion over the next five years. The American Society of Civil Engineers 2013 “Report Card for America’s Infrastructure” rated our aviation system a “D,” estimating that the cost of congestion and delays to the economy will rise to $34 billion in 2020 (up from $22 billion in 2012), and that “D” grade assumes we continue to spend at current funding levels — before sequestration.

Even before Congress gave the FAA permission to halt all airport construction funding, America faced a $12 billion increase in the economic drag caused by aviation congestion. Now that cost is going to swell.

These can-kicking costs come on top of the more immediate damage sequestration will do to the economy: 700,000 fewer jobs and a 0.6 percentage-point reduction in GDP growth for the year. The Huffington Post reported several of the mechanical details of individual agency responses to the cuts contained in today’s House report, including 500 fewer firefighters at the Forest Service and a shrunken stockpile of vaccines at the Centers for Disease Control and Prevention.

NEWS FLASH

Pentagon Pushes FAA To Open U.S. Airspace To Drones | With the U.S. withdrawal from Iraq and the completion of U.S. combat operations in Afghanistan next year, a large portion of the Pentagon’s fleet of 7,500 combat drones will return to the U.S. The Pentagon is urging the FAA to open U.S. airspace to the unmanned aircraft. Currently, the FAA doesn’t allow drone aircraft in U.S. airspace without a special certificate but the Pentagon hopes to station drones at various military bases for pilot training and firefighting. The FAA has said drone aircraft are generally not allowed in U.S. airspace because they don’t have adequate “detect, sense and avoid” technology to prevent midair collisions.

Economy

Coburn Relents On Block Of FAA Re-Authorization Package Under Pressure From Republican Colleagues

Until late this afternoon, Sen. Tom Coburn (R-OK) was single-handedly blocking the transportation bill that would temporarily reauthorize the Federal Aviation Administration, keep 80,000 people in their jobs, and avoid another costly shutdown like the one that occurred in August. Coburn had said he was blocking the bill due to the “indefensible threat to public safety” caused by a provision in the bill meant to increase trees and bike paths alongside roadways.

Senate Majority Leader Harry Reid (D-NV) had repeatedly chided Coburn, saying “the junior senator from Oklahoma” was acting like “a dictator.” Coburn reportedly removed his block of the bill this afternoon, but not before several Republican senators joined in that criticism, urging Coburn to relent on his blockade so the Senate could vote on the transportation package and avoid another shutdown:

“We need to reduce spending and cut out special interest provisions, but we should not let a gap in the construction program go forward,” said [Sen. Mark] Kirk [R-IL], whose state has the very busy O’Hare International Airport. “The economy is already teetering on the edge of a recession. So Congress should not repeat what happened with the FAA in August.”

Texas Sen. Kay Bailey Hutchison, who blasted her Republican colleagues and said the August shutdown was “not honorable,” joined Kirk, saying she wanted the package to “pass without any delays. It’s too costly.” She was echoed by Sen. Dean Heller of Nevada and the Senate GOP’s Conference Chair, Lamar Alexander (TN), who said simply, “We need an FAA extension.”

The August FAA shutdown was costly for both workers and the government. For nearly two weeks, 4,000 FAA employees were involuntarily furloughed and the government lost more than $200 million a week in tax revenues. Now, just when it seemed both sides had reached an agreement to keep the agency funded for another four months, Republican extremism struck again in the form of Coburn’s block. If Coburn hadn’t heeded his colleagues’ advice, nearly 80,000 Americans could have been out of work, and the blame for another FAA shutdown would have again laid at the feet of the Republican Party.

Update

The Senate voted 92-6 to approve the transportation bill, which includes a temporary re-authorization of the FAA. The House has already approved the bill.

Economy

Coburn Holds FAA Bill Hostage, Claiming Trees And Bike Paths Pose ‘An Indefensible Threat Against Public Safety’

Yesterday, Senate Majority Leader Harry Reid (D-NV) took Sen. Tom Coburn (R-OK) to task for blocking a critical transportation bill — an action that could put 80,000 people out of work by this weekend. The GOP-controlled House has already passed the bill, which temporarily extends funding for the Federal Aviation Administration and highway projects, in order to avert another FAA shutdown.

The bill needs to be signed by President Obama by Friday, but Coburn is threatening to let the deadline pass. He’s even found a novel excuse for holding the bill hostage — his objection to bike paths and trees:

Coburn spokesman John Hart said Wednesday that the senator “makes no apologies for doing everything in his power to force his colleagues to cut wasteful spending instead of inflicting further damage on our economy through unnecessary borrowing.

“Congress’s refusal to live within its means has created an economic disaster and a debt that is now our greatest national security threat,” he said.

Hart said Coburn was also opposed to provisions in the transportation bill designed to increase the number of bike paths and trees along roadways.

The beautification mandate is an indefensible threat against public safety that forces states to prioritize bike paths over bridge repair,” he said.

Earlier this summer, Republican refusal to reauthorize the FAA without passage of an anti-union provision shut down the agency for weeks. Their action furloughed 4,000 FAA workers, forced others to work without pay, halted $2.5 billion in airport construction projects, and cost the government about $200 million a week. Coburn is threatening to repeat that event by refusing to let the Senate vote on the bill by Friday.

Adding insult to injury, Coburn is also holding up a bill to fund the Federal Emergency Management Agency (FEMA), which must be voted on first before the Senate can take up FAA authorization. Coburn objects to the price tag of the $6.9 billion FEMA bill. This emergency disaster aid is, of course, important to pass quickly in the aftermath of Hurricane Irene and other natural disasters. Reid even compared Coburn to a dictator for holding up the bill.

Economy

GOP Chairman Mica Forces Furlough Of Thousands Of Workers, Then Plays Victim: ‘I’ve Had A Brutal Week’

Leave John Mica aloooooooone.

The 13-day shutdown of the Federal Aviation Administration finally came to an end today, which will allow thousands of furloughed federal employees and tens of thousands of construction workers to get back on the job on Monday. House Republicans refused to reauthorize the FAA without including an anti-union provision that would make it harder for workers at airlines and railroads to unionize (a measure sought desperately by, among others, Delta Airlines). Airline inspectors were forced to work without pay during the shutdown.

House Transportation Committee John Mica (R-FL) has been at the forefront of the FAA debacle, advancing the GOP’s anti-union demands (on behalf of his biggest donors) and then adding cuts in subsidies to rural airports to the FAA bill that he admitted were only meant to tweak Democratic senators. But while he’s been more than willing to hold thousands of jobs hostage, Mica evidently can’t handle a little criticism about his role in the matter, as he whined to the Washington Post’s Dana Milbank about having a “brutal week.” “People don’t have to be so personal,” he added:

“I’ve had a brutal week, getting beat up by everybody,” Mica told me, minutes after Senate Majority Leader Harry Reid announced a deal that would end the shutdown and avoid the cuts to regional air service that Mica wanted.

“I didn’t know it would cause this much consternation,” Mica said. “Now I’ve just got to get the broom and the shovel and clean up the mess.” Switching metaphors, he said he wanted “to unclog the toilet, but it backed up. So I don’t know what to do, what to say.” [...]

“People don’t have to get so personal,” he said with a sigh. “A lot of people hate me now and think I’m the worst thing in the world for what I did.” It’s “this sort of gotcha,” he said, “that’s changed the dynamics of people working more effectively together.”

I think the 4,000 FAA employees and 70,000 construction workers who were put out of work this week — and who may not receive back pay — actually had a rougher week than Mica. While he seemed to express “remorse” about the shutdown when speaking to Milbank, Mica today seemed to threaten shutting down the FAA again if Senate Democrats are unwilling to go along with his demands.

NEWS FLASH

BREAKING: Reid Announces Deal To Reopen FAA | This afternoon, Senate Majority Leader Harry Reid (D-NV) announced that congressional negotiators had reached a deal to end the partial shutdown of the FAA. MSNBC reports the deal is temporary and will effectively “be the same as a clean extension,” though the mechanism is unclear at the moment. The deal does not resolve the key union issue holding up the bill, but will allow furloughed employees to return to work before Congress returns in the fall to take up a long-term reauthorization.

Economy

If Congressional Elections Followed The Anti-Union Rule Rep. Mica Proposed, He Wouldn’t Be A Congressman

The Federal Aviation Administration is now in day 12 of a costly shutdown caused by House Republicans’ insistence that a measure making it harder for transportation workers to form a union be attached to agency’s re-authorization package. But if that rule were followed in congressional elections, the Republican leading the fight — House Transportation Committee Chairman John Mica (R-FL) — wouldn’t even be a congressman.

The rule Mica attached to the package would make it harder to form unions by counting eligible voters who do not cast ballots as “no” votes, as opposed to leaving non-voters out entirely, as is done in the regular election process. According to the Communications Workers of America (CWA), the results of Mica’s 2010 election would have been dramatically different with this rule in effect:

Rep. Mica received support from 69% of the voters in his district who cast a ballot in his successful 2010 re-election campaign, amounting to slightly over 185,000 actual votes tallied for him.

However, if you add the over 83,000 voters who voted against Rep. Mica to 312,000 eligible voters who did not participate, then Rep. Mica would only muster 32% of the overall total — falling far short of the majority needed for election. Rep. Mica would lose handily to the 68% of “voters” who chose his opponent or were non-participating voters whose absence was counted as a vote for the alternative.

In fact, the CWA found that if the rule applied to all congressional elections, the United States government wouldn’t have a single member of Congress:

None of the current Members of Congress would have won election in 2010 under this standard. For each of the 435 House races in the 2010 elections, if you added the non-voting eligible voting population in a congressional district to the actual vote total cast for the opponent(s) of the current Member, then not one Member would have mustered the majority of votes needed to win election.

According to the report, only six of the 435 members of Congress would have received more than 40 percent of the vote under this type of election. Mica’s proposal is not an assault on unions — it is an assault on the democratic election process itself.

Economy

FAA Worker Blasts GOP Over Anti-Union Demands: ‘That Doesn’t Pass The Weasel Test’

A Georgia-based employee of the Federal Aviation Administration blasted congressional Republicans this afternoon for skipping town after voting to raise the debt ceiling without coming to an agreement to re-authorize the FAA. The agency’s resulting shutdown, now in its 11th day, left 74,000 FAA employees and affiliated construction workers without work, is costing taxpayers $200 million a week, and will likely last at least another month until Congress reconvenes in September.

The impasse resulted from House Transportation Committee Chair John Mica’s (R-FL) decision to insert an anti-union measure into the re-authorization package. The measure would make it harder for workers to form a union by counting workers who don’t vote in union elections as “No” votes, a practice Democrats have long fought to prevent.

FAA engineer Neil Bolen, who is also the vice president of his union, blasted the GOP for being “totally unaware” of the workers’ struggles and for the absurdity of the anti-union measure:

BOLEN: It’s incredibly frustrating. The whole concept that they’re saying, ‘Oh, this um, railroad act of how to vote in unions —

HOST: Right, the sticking point comes down to language over airline unionization rules.

BOLEN: That doesn’t pass the weasel test. They’re saying if you don’t vote, then it counts as a no. [...] That’s just silly. And the worst part is so many of these congressmen are not working for their constituents. A number of the airline employees live in [Rep.] Lynn Westmoreland’s [R-GA] district, here in Atlanta. And he’s not looking out for his constituents, which are the airline employees.

HOST: I mean, if you look at the situation, you have thousands of people out of work, important construction projects on hold — very important projects — and then you have Congress on vacation. [...]

BOLEN: I’m having a great time on my vacation. Without pay by the way. I’m not on a congressional junket. I’m sitting at the house watching the grass grow. So no, I’m not terribly pleased with what they’ve managed to accomplish.

Watch it:

President Obama and Transportation Secretary Ray Lahood have repeatedly called on Congress to re-authorize the agency, and Obama today signaled that an agreement may come by the end of the week. While Bolen would surely welcome that, he’s frustrated that Congress left town in the first place. “The debt ceiling argument ended Monday and Tuesday,” he said. “Well, where you at on Wednesday? You don’t have to go on vacation. Take another day. Get it finished. ‘Cause you’re sitting around, gnashing a great amount, about cutting a few billion here over 10 years. But you’re losing 1.2 [billion] this month. How do you figure that, folks?”

Politics

Eric Cantor Defends Airlines Pocketing Taxes During FAA Shutdown: ‘That’s What Business Does’

The FAA shut down over House Republicans’ insistence on including anti-union provisions in the agency’s re-authorization bill and the airlines are poised to collect $1.3 billion or more of extra profits in forgone taxes. With the FAA unable to collect the $28.6 million a day in aviation taxes it usually takes in, some of the nation’s largest airlines, including United and Delta, are pocketing the windfall, instead of passing their savings onto customers.

Appearing on Fox News this afternoon, House Majority Leader Eric Cantor (R-VA) defend this practice, saying, “That’s what business does”:

CANTOR: And what airlines have done is have stepped in and said, well, if we’re not going to pay that money to the federal government, we’re going to keep it towards our own bottom line. And I guess that’s what business does.

Watch it:

Oddly, Cantor seems to be unintentionally making the progressive argument about corporate taxes here. While conservatives generally argue that cutting business tax rates will lead to companies passing on savings to consumers and hiring more employees, progressives argue that corporations will just pocket much of these savings. The FAA shutdown offered an ideal test case for this question, and it seems that even Cantor agrees that pocketing tax savings is “what business does.”

Economy

Government Bureaucrats Are Trying To Come Between You And Unsafe Air Travel

According to the conservative narrative about civil servants, they’re “unelected, unaccountable,” “faceless bureaucrats” that will “tell[] us which light bulbs to buy,” “ration health care,” take “charge of the thermostats,” and, of course, “pull the plug on grandma.” The “career Washington” bureaucrats are also lazy, underworked, and overpaid. They’re always trying to “come between” things, especially “you and your doctor,” and are generally bad for “liberty” and one of the main obstacles to job creation.

Completely ignored in this narrative is that civil servants perform vital functions to keeping a modern society functioning, as made evident by the latest House-created government shutdown crisis.

The FAA is partially shut down right now because House Republicans are insisting on including an anti-union provision in the agency’s re-authorization bill. But air travel continues, and while air traffic controllers are exempt from the shutdown, safety inspectors are not. In order to keep the system functioning, these faceless bureaucrats in the FAA are continuing to work, without pay, and are even paying for their official expenses out of their own pockets:

Those inspectors are the primary individuals responsible for ensuring that commercial airports comply with federal regulations. They also support runway safety action teams, oversee construction safety plans, investigate runway incursions and ensure that corrective action is taken on safety discrepancies.

“The reason they are out on the job is because of the risk to operational safety or life and property,” [F.A.A. administrator Randy] Babbitt said. “We can neither pay them nor can we compensate them for expenses. We are depending and living on their professionalism at this point.”

It is unclear how long the inspectors can continue to pay the bills for their own travel and hotel expenses. Typically, each of the roughly 40 regional inspectors travels to up to five airports in each two-week period, F.A.A. officials said.

The government allocates a minimum of $76 per night for lodging and another $46 per day for food an incidental expenses to employees — up to $295and $71, respectively, for more expensive places like New York City — which adds up quickly when inspectors are asked to travel so frequently. At even the minimum per diem rate, that’s $610 in travel expenses on employees’ credit cards every two weeks — not including airfare. Aviation Safety Inspectors are paid between $70,000 to $92,000 a year, according to job listings on USA Jobs.

And it’s unclear how long it will be before they’re reimbursed, since the GOP-controlled House recessed yesterday without solving the issue and is now heading home enjoying the air travel system kept safe by these inspectors they refuse to pay.

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