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Industry analysis: FAA cuts under sequester would be costly

Aug. 13, 2012 - 12:48PM   |  
By SEAN REILLY   |   Comments
The control tower at Ronald Reagan National Airport is seen from a Metro train stop last year in Washington. Automatic budget cuts slated to begin in January could cost the Federal Aviation Administration $1 billion next year, a new industry forecast concludes.
The control tower at Ronald Reagan National Airport is seen from a Metro train stop last year in Washington. Automatic budget cuts slated to begin in January could cost the Federal Aviation Administration $1 billion next year, a new industry forecast concludes. (Chip Somodevilla / Getty)

Automatic budget cuts slated to begin in January could cost the Federal Aviation Administration $1 billion next year and take a sharp bite out of the U.S. economy, a new industry forecast concludes.

The report, released Monday by the Aerospace Industries Association, presumes that the cuts would force the layoff of almost 1,500 air traffic controllers — nearly 10 percent of the total — and the closing of more than 240 airport control towers around the country. Coupled with projected layoffs of almost 12,000 customs inspectors and Transportation Security Administration screeners, “these cuts would hobble the air transportation system, and leave it unable to support today’s level of civil air travel,” the report says.

The result could be a drop in passenger and freight traffic of anywhere from 5 percent to 10 percent, with up to 109,000 lost jobs next year, the report says. Aircraft manufacturing would also drop by as much as 2 percent, costing the economy another 11,000 to 22,000 jobs.

The cuts — formally known as sequestration — are required by last year’s Budget Control Act unless Congress and the Obama administration agree on a path to reducing future budget deficits by $1.2 trillion through 2021. Like other agencies, the FAA has not released its own forecast of the potential impact of sequestration; an agency spokeswoman referred a request for comment to the Office of Management and Budget.

In a separate analysis published earlier this month, a think tank called the Center for American Progress predicted that the agency would first resort to employee furloughs in hopes of avoiding the need to pay separation benefits that would follow a reduction-in-force. More than 2,000 controllers would be furloughed, mainly at smaller airports that handle less traffic, that analysis said.

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