The Baytown Sun (Baytown, Tex.), Vol. 91, No. 153, Ed. 1 Friday, August 5, 2011 Page: 5 of 14
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Mday, Auiiumt 8. 2011
B_u»ine83/Indu»try
Reid: Compromise in hand to reopen FAA
mm
tmxMaUPrm
WASHINGTON (AP)
— Congress has reached a
bipartisan compromise to
end the two-week partial
shutdown of the Federal
Aviation Administration
that has idled tens of thou*
«nds of workers and cost
the government about S30
million a day in uncollect-
ed airline ticket taxes.
Senate Democratic leader
Harry Reid said Thursday.
The deal would allow
the Senate to approve a
House bill extending the
FAA’s operating authority
through mid-September,
including a provision that
eliminates SI6.3 million in
air service subsidies to I3
rural communities.
Passage of the bill is
expected Friday. Senators
have scattered for their
August recess, but the
measure can be approved
if leaders from both parties
agree to adopt it by “unan-
imous consent."
If President Barack
Obama signs the bill over
the weekend, FAA
employees could return to
work and payments for air-
port construction projects
would resume on Monday,
transportation officials
said.
Republicans had insisted
on the subsidy cuts as their
price for restoring the FAA
to full operation.
But the cuts may
become moot.
The bill includes lan-
guage that gives
Transportation Secretary
Ray LaHood the authority
to continue subsidized
service to the 13 commu-
nities if he deckles it's nec-
essary.
“Only LaHood can
decide how he will use his
waiver authority," said
Adam Jentleson. a
spokesman (far Reid.
But Democrats said they
expect the administration
to effectively waive or
negate the cuts.
“I just know that the
White House has provided
assurances that they (the
communities) will be held
harmless," said a Senate
Democratic leadership
aide who asked not to be
named because he wasn’t
authorized to speak pub-
licly about the deal.
The shutdown began
when much of Washington
was transfixed by the stale-
mate over raising the gov-
ernment's debt ceiling.
During that time, the FAA
forloughed 4,000 workers
but kept air traffic con-
trollers and most safety
inspectors on the job.
Forty airport safety inspec-
tors worked without pay,
picking up their own travel
expenses. Some 70,000
workers on construction-
related jobs on airport
projects from film
Springs, Calif, to New
York City were idled as the
FAA couldn’t pay for the
work.
But airline passengers in
the busy travel season
hardly noticed any
changes.
Airlines continued to
work as normal, but they
were no longer authorized
to collect federal ticket
taxes at a rate of $30 mil-
lion a day. For a few lucky
ticket buyers, prices
dropped. But for the vast
majority, nothing changed
because airlines raised
their base prices to match
the tax.
Some passengers will
now be eligible for tax
refonds if they bought
their tickets before July 23
and their bawd took place
during the shutdown
As foe debt ceiling crisis
passed and Congress head-
ed home for its August
recess without resolving
the standoff, Obama spcU
out Wednesday and
Transportation Secretary
Ray LaHood urged
Congress to return to deal
with foe issues.
Obama expressed dis-
may that Congress would
allow up to SU billion in
tax revenue to go out the
door —• foe amount that
could have been lost by the
time lawmakers return in
September.
Reid announced the deal
Thursday afternoon, say-
ing it would put 74,000
transportation and con-
struction workers beck to
work.
“This agreement does
not resolve foe important
differences that still
remain. But I believe we
should keep Americans
working while Congress
settles its differences, and
this agreement will do
exactly that," Reid said.
Republican Sen. Tom
Cobum of Oklahoma
won’t attempt to block
passage of foe bill when it
comes up on Friday,
spokesman John Hart said.
Cobum blocked several
attempts by Democrats to
pass an extension bill
without the subsidy cuts.
“The delay was the
result of members wanting
to protect their parochial
interests,’' Hart add in an
email.
The partisan standoff
that led to foe shutdown
began last month when
Rep. John Mica, R-Fla.,
the chairman of the House
Transportation and
Infrastructure Committee,
signaled his intention to
attach the subsidy cuts to a
Mil to extend FAA’s oper-
Washington hamper our
recovery, so this is an
important step forward”
Both the House and
- MU “foroas the
Senate’s hand to act"
Mica has said that he’s
willing to take provisions
SKsrsa STirrST
nego-
g der-
ating authority through
mid-September. The
agency has been operating
under a series of 20 short-
term extensions since
2007, when foe last long-
term FAA ftinding bill
expired.
Senate Democrats com-
plained that Republicans
were breaking precedent
by using an extension bill
to enact policy changes
that hadn’t been agreed
upon. Even Republican
Sen. Kay Bailey Hutchison
of Texas called the meas-
ure a “procedural hand
grenade." Senators refused
to pass the House bill, say-
ing to do so would be giv-
ing into, legislative black-
mail and inviting
Republicans to up the ante
on the next extension bill.
Obama, who had scold-
ed Congress on
Wednesday for not solving
the standoff, expressed
relief.
“I’m pleased that leaders
in Congress are working
together to break the
impasse involving the
FAA so that tens of thou-
sands of construction
workers and others can go
back to work,” Obama said
in a statement. “We can’t
afford to let politics in
earlier this war but
nations on resolving
ferences and finalizing
those bills are stalemated.
The ’biggest holdup is a
labor provision in the
House long-term bill.
Republicans want to over-
turn a National Mediation
Board rule approved last
year that allows airline and
railroad employees to form
a union by a simple mqjor-
ity of those voting. Under
foe old rule, workers who
didn’t vote were treated as
“no" votes.
“The House has made it
clear that the anti-worker
piece is a priority for them
uid they also put us on
notice that they don’t
intend to give in. So we are
bracing for a new fight in
September," said Vince
Morris, a spokesman for
Sen. Jay Rockefeller, D-
W.Vr, chairman of a com-
mittee that oversees FAA.
Last month, in com-
ments to the House Rules
Committee and separately
to reporters. Mica said foe
labor provision was the
only issue standing in the
way of the House and
Senate reaching an agree-
ment on a long-term FAA
bill. He said Reid, D-Nev„
has refused to negotiate
with Republicans on the
issue.
“There is only one issue
have I not been clear?
It’s up to Mr. Reid," Mica
told foe committee.
He added that including
the subsidy cuts to the
attach them to future
extensions to achieve foe
policy changes foe GOP
lawmakers want.
Democrats said they
worried that if they give in
to Republicans on relative-
ly small items like the sub-
sidy cuts. Republicans will
be encouraged to demand
concessions on the next
extension bill, such as the
labor provision
Democrats and union
officials say the proposed
labor change puts airline
and railroad elections
under the same democratic
rules required for unioniz-
ing all other companies.
But Republicans say the
new rule reverses 75 years
of precedent to favor labor
unions.
The GOP labor provi-
sion has the backing of foe
airline industry. The
biggest beneficiary would
be Delta Air Lines, the
largest carrier whose
workers aren’t primarily
union members.
Communities targeted
for the proposed air serv-
ice subsidy cuts are
Morgantown. W.Va.;
Athens, Ga.; Glendive.
Mont.; Alamogordo, N.M.,
Ely, Ncv.; Jamestown.
N.Y.; Bradford. Pa.
Hagerstown, Md.
Jonesboro, Ark.
Johnstown, Pa.
Franklin/Oil City, Pa.
Lancaster, Pa.; and
Jackson, Term.
AP White House
Correspondent Ben Feller
contributed to Ms report
Dow falls 512 in steepest decline since ‘08 crisis
MBLIMKIL
AP Business Writer
NEW YORK (AP) - Gripped
by fear of a new recession, the
stock market suffered its worst day
Thursday since the financial crisis
in the fell of2008. The Dow Jones
industrial average fell more than
300 points, its ninth-steepest
decline.
The sell-off wiped out the
Dow's remaining gains for 2011.
It put the Dow and broader stock
indexes into what investors call a
correction — down 10 percent
from their highs in the spring.
“We are continuing to be bom-
barded by worries about the glob-
al economy,” said Bill Stone, the
chief investment strategist for
PNC Financial.
Across the financial markets,
the day was reminiscent of the
wild swings that defined the finan-
cial crisis in September and
October three years ago. Gold
prices briefly hit a record high. Oil
fell even more than stocks — 6
percent, or $5.30 a barrel. And
frightened investors were so des-
perate to get into some govern-
ment bonds that they were willing
accept almost no return on their
money.
It was the most alarming day yet
in foe almost uninterrupted selling
that has swept Wall Street for two
weeks. The Dow has lost more
than 1300 points, or 103 percent.
By one broad measure kept by
Dow Jones, almost $1.9 trillion in
market value has disappeared.
For the day, the Dow closed
down 512.76 points, at 11383.68.
It was the steepest point decline
since Dec. 1, 2008. Thursday’s
decline was the ninth-worst by
points for the Dow. In percentage
terms, the decline of 4.3 percent
does not rank among foe worst
On Black Monday in 1987, for
example, the Dow fell 22 percent
Two weeks ago, investors
appeared worried about the dead-
locked negotiations in Washington
over raising the ceiling on govern-
ment debt As soon as the ceiling
was raised, investors focused on
the economy, and the selling
accelerated.
On Thursday, growing fear
about the weakening U.S. econo-
my was joined by concern in
Europe that the troubled
economies of Italy and Spain
might need help from foe
European Union.
The European Union has
already given financial assistance
to Greece and Ireland, two coun-
tries that have struggled to pay
their debts. A financial rescue
package for Italy or Spain might
be more than foe group of coun-
tries am handle.
Traders also unloaded stocks
before Friday’s release erf the gov-
ernment’s unemployment report
for July, which is expected to show'
weak job growth and perhaps a
rise in the unemployment rate,
which is 92 percent. Together,
they produced “a perfect storm of
selling," said Ryan Larson, head of
U.S. equity trading for RBC
Global Asset Management.
Until a week ago, WU1 Street
had mostly convinced itself that
foe U.S. economy would improve
in the second half of the year. Gas
prices were felling, aid Japanese
factories were resuming produc-
tion after disruptions from the
March earthquake.
Dow Jonas industrials
Ctoae: 11,383.68
Change: -512.76 (-4.3%)
13.200
12,000
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Gray, Janie. The Baytown Sun (Baytown, Tex.), Vol. 91, No. 153, Ed. 1 Friday, August 5, 2011, newspaper, August 5, 2011; Baytown, Texas. (https://texashistory.unt.edu/ark:/67531/metapth1028213/m1/5/: accessed June 21, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu.; crediting Sterling Municipal Library.