US to lose $1bn in taxes?

By benim
In Uncategorized
Aug 4th, 2011
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US President Barack Obama urged Congress Wednesday to break its vacation to end a row that has shut airport construction and halted tax payments by airlines, which could cost a billion dollars.

“This is a lose-lose-lose situation that can be easily solved if Congress gets back into town and does its job,” Obama said, after lawmakers left Washington without extending funding for the Federal Aviation Administration.

The cash crunch has forced the FAA to temporarily lay off 4000 non essential personnel and halt work for 70 000 workers on airport construction projects, though top officials say air safety is not at risk.

The FAA has for several years been struggling by on more than 20 temporary funding grants from the government amid a row between Democrats and Republicans over conditions for its long-term funding.

But with Congress consumed by a crisis over raising the US government borrowing limit, only averted by a last-minute deal, lawmakers left for their summer break without dealing with the FAA’s cash crunch.

The Democratic-led Senate and the Republican-run House of Representatives have been at odds over subsidies for rural air services and a dispute over labor standards and unions in the aviation industry.

Obama and top officials said that extending FAA funding would not even require all lawmakers to fly back to Washington, saying the action could be completed by a few members of Congress under procedures governing the recess.

The president pointed out that as well as keeping large numbers of workers off the job on repairing crumbling aviation infrastructure, the dispute was costing the government $200-million a week in lost tax revenues.

Airlines were still collecting taxes on tickets sold but may not be keen to give it back to the government, even after Congress is expected to restore funding when it returns to work in September, he said.

“The federal government stands to lose $200-million a week – that would be a billion dollars at a time when we are worrying about how we pay for everything,” Obama said at a cabinet meeting.

“We don’t anticipate it is going to be easy getting that money back,” he continued.

“This is an example of a self-inflicted wound that is unnecessary.”

Republican House Speaker John Boehner, however, said that the Senate should simply pass a bill that has already cleared his chamber to fund the FAA.

Thousands in limbo

“The only reason so many jobs are at stake is Senate Democratic leaders chose to play politics rather than pass the House bill,” Boehner said.

“I respect the fact that senators have certain objections, but they have had two weeks to respond to the House bill and done nothing, leaving tens of thousands of workers in limbo.”

But Senate Democratic Majority leader Harry Reid accused Republicans of holding aviation workers “hostage” to their political games, repeating a refrain often heard during the debt showdown.

“I hope Republicans understand how desperate people are out there… Speaker Boehner, stop this nonsense.”

Transportation Secretary Ray LaHood appeared in the White House briefing room to complain that lawmakers were often speaking about the need to safeguard jobs but were not living up to their rhetoric in the FAA dispute.

“They talk the talk, but they have not walked the walk.”

But LaHood assured Americans that though some aviation safety workers were using their own credit cards to finance their expenses, air traffic and passengers were not at risk.

“I can continue to guarantee that safety will never be compromised.

“We have the safest aviation system in the world. We would never compromise safety.”AFP

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