Harry Reid Costs Obama $1 Billion

The Senate had the option to pass the House version of the FAA bill and send it to Obama for signature, but Harry Reid chose to go on recess instead:

WASHINGTON – The government is likely to lose more than $1 billion in airline ticket taxes because lawmakers have left town for a month without resolving a partisan standoff over a bill to end the partial shutdown of the Federal Aviation Administration.

The government already has lost more than $200 million since airlines are unable to collect taxes on ticket sales because the FAA's operating authority has expired.

The Senate recessed on Tuesday until September, erasing any possibility for quickly resolving the issue. The House left Monday night.

Caught up in the partisan acrimony are nearly 4,000 FAA employees who have been furloughed. The FAA also has issued stop work orders on more than 200 construction projects, threatening the jobs of thousands of other workers. Air traffic controllers, however, remain on the job.

The debacle could have had an upside for airline passengers because ticket taxes, which typically average about $30 on a $300 round-trip fare, are suspended during the shutdown. But airlines decided to pocket the windfall. Within hours of the shutdown on July 23, most airlines raised their fares by amounts equivalent to the taxes that disappeared.

Transportation Secretary Ray LaHood called airline CEOs to complain and lawmakers have sent letters demanding the fare hikes be reversed and the profits be placed in escrow. But their howls have largely been ignored. Airlines collectively lost about $440 million in the first six months of this year, according to the Air Transport Association.

Obama specifically asked in his statement today that Congress pass the FAA bill. I guess Harry Reid called his bluff too.

There were reports earlier to day that Democrats had decided to go along with the House bill even though they didn't like parts of it.  Perhaps the screaming they had to endure from their base over the debt bill scared them off.  For a group of people who so desperately want to take your money, it's hard to believe they'd walk away and give the airline industry $1 billion free.

After all, every plane in the fleet is a "corporate jet".