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FAA partial shutdown continues

Senate prepares to follow the House to recess, while Treasury loses out on some $200 million per week in tax revenue collected through airline tickets.

Despite hours of back-and-forth talks among Senate leaders, Majority Leader Harry Reid has thrown in the towel on reaching agreement to end a partial shutdown of the Federal Aviation Administration. Reid was on the verge of ending the standoff Tuesday, but he was unsuccessful in winning support for a House bill that would have extended the agency's funding through mid-September.

With the FAA in limbo, the Treasury is losing out on some $200 million per week in tax revenue collected through airline tickets. The FAA has halted about 200 construction projects throughout the country. "We are smack dab in the middle of the construction season," said Transportation Secretary Ray LaHood. "We also have heard many, many grandiose speeches about members of congress about getting jobs and putting people to work. This is not the way to put people to work."

Reid had indicated a willingness to swallow the House bill, which would funnel money back to the FAA after 11 days of partial shutdown, even though it would have meant accepting provisions he didn't like. Reid met Tuesday with LaHood, who admonished the Senate to pass the House bill. In a conference call Tuesday, LaHood said Reid was fine with it, but "there were other senators that have concerns" with the House bill.

The key stumbling block appeared to be Commerce Committee Chairman John Rockefeller, D-W.Va., who blamed Republicans for refusing to accept a "clean" stopgap funding bill for the FAA. The Republican-controlled House passed the stopgap FAA measure several weeks ago over the objection of Democrats, who said that the bill should not include cuts to rural airports. Most stopgap funding bills are "clean"-meaning they make no permanent changes to the policy.

The House adjourned on Monday without any further action on the FAA, leaving its bill as the only Senate solution to end the shutdown before Labor Day. Even though the House has left town, Rockefeller insisted that the House could still accept a clean Senate-passed FAA bill during its pro-forma session if all members agreed to it. That's technically true, but it's also very difficult, given that many House members are in their districts now and might not be willing to sign off on something that their leaders strenuously objected to earlier this week.

Senate Republicans and LaHood say the only way to stop the shutdown is to accept the House bill.

Reid said on Tuesday that he was willing to accept the House bill in order to put 4,000 furloughed FAA employees back to work, even though he and other Senate Democrats are offended that House Transportation Committee Chairman John Mica, R-Fla., refused to remove the cuts to rural-airport subsidies.

(RELATED: Unfinished Business: Congress Leaving Mess at FAA)

The resolution was never a certainty. Reid would have had to pass the bill under a procedure that would have required all senators to agree. Rockefeller had been among the most strenuous objectors to the cuts to rural airports.

One of the airports that would be cut off from rural subsidies is in Reid's home state of Nevada, a fact he made light of on Tuesday. "I do my best to protect the state, but sometimes you have to be reasonable," he said. "As we learned with this big [debt-ceiling] deal we've just done, sometimes you have to step back and find out what's best for the country and not be bound by some of your own personal feelings."

Reid also noted that up to 80,000 construction jobs would be lost if the FAA remains partially shut down.

House Democrats weren't so happy either. Minority Whip Steny Hoyer, D-Md., said the House Republicans forced Reid to make "a terrible decision" in trying to move the House-passed bill. "That is a perfect example of the politics--not of persuasion, not of compromise, of coming together--but the politics of confrontation," Hoyer said.

Billy House contributed to this report.