June 15, 2016

Today marks the one-month mark before the scheduled expiration of Airport and Airway Trust Fund spending authority, aviation excise taxes, Airport Improvement Program funding balances, and several other aviation policy issues. One week of that four will have no Congressional session because of the Independence Day recess from June 27 through July 4.

The July 15 expiration date for aviation programs was not picked at random – that day (a Friday) is also scheduled to be the last day the House and Senate are in session until after Labor Day. And nobody expects Congress to get much done during the scheduled four weeks of session between Labor Day and the November elections.

During those remaining three weeks of session, Congress has a lot to do. Leaders of both parties want to move as many appropriations bills as possible through the chamber floors prior to the scheduled July 15 recess date. Final action on a bill providing funding to fight the Zika virus and another bill to combat the opioid abuse epidemic are must-pass items prior to the 15^th. (The Puerto Rico debt restructuring bill, already passed by the House, is must-pass in the Senate by June 24.) Other items can unexpectedly pop onto the agenda (witness the filibuster of the Commerce-Justice-Science appropriations bill that broke out today on the Senate floor in an attempt to force Congressional action on gun control legislation prior to July 15).

As a result of all of the above, every day that passes between now and July 15 makes it less likely that Congress will approve significant aviation legislation for the President’s signature prior to that date.

The alternative – once again – is some kind of extension of the taxes, spending authority, AIP funding, and other basics to ensure that FAA operations are not disrupted while Congress figures out what to do on the long-term bill.

As a result, Congressional leaders are now trying to figure out what the next extension (which will be the third extension of the 2012 aviation law) will like. There are two main questions: how long will it last, and how “clean” will it be? (The two are somewhat related.)

Insofar as duration goes, the options seem to be the post-election lame-duck session, or into the next Congress. (As mentioned above, no one seems to think that anything of substance will be accomplished during the September 6 through September 30 session except passing a short-term continuing appropriations resolution that lasts into the lame-duck session.) House Republican leaders lean more towards an extension to next year, while the Senate chairman is said to prefer something shorter. (This may have something to do with the fact that the Senate is seen as being significantly more likely to change hands in the fall elections than is the House, so the current Senate Commerce, Science and Transportation chairman, John Thune (R-SD) may not keep that job next year.

As far as an extension being “clean” of extraneous provisions, House GOP leaders can probably get 218 votes for a “clean” FAA extension into next year. This would have a problem getting 60 votes on the Senate floor, because Democrats want to offer a provision extending “orphan” energy taxes to a FAA extension.

(Last year’s omnibus appropriations-tax measure (Public Law 114-113) extended the solar technology tax credit in section 48 of the Internal Revenue Code but let four other renewable energy technology tax credits (fuel cell, combined heat and power, microturbine, and small wind) expire. Democrats say this was an oversight and have been trying all year to find some kind of legislative vehicle through which to renew those tax credits. But there haven’t been any amendable House-passed tax bills moving through the Senate this year. (The last FAA extension bill might have been the last tax bill that moved through the Senate, and the energy tax issue was a problem then, as well.))

So far, there seems to be no agreement between House and Senate leadership groups on how to solve the short-long and clean-unclean debates. Unfortunately, there is a lot of Congressional precedent on issues like this that have a “drop dead” date that coincides with an ummoveable Congressional recess date – the chamber with the ability to pass its preferred version does so just before the adjournment and then leaves town, forcing the other chamber to either accept that version and send it to the President, unamended, or else shut down whatever agency or program is about to expire.

If no agreement can be reached, then under this scenario, the House would pass a clean extension into next year sometime in the July 13-14 range and then leave for two months, forcing the Senate to accept the extension or else shut down Airport and Airway Trust Fund taxes and the Airport Improvement Program.

However, this is not as big a threat as shutting down the Highway Trust Fund was when former Sen. Jim Bunning (R-KY) refused to accept the latest HTF extension in March 2010 and forced a short shutdown of programs funded by the HTF. Congress has let AIP funding lapse for months at a time in the past, since very few salaried employees are paid out of the AIP account and the other FAA employees are paid out of 2016 appropriations that have already been enacted. And Congress has even intentionally let the aviation excise taxes lapse for months at a time as well – it reduces the balances in the Trust Fund, but those balances are high now.

The underlying issue is still the push by House Transportation and Infrastructure chairman Bill Shuster (R-PA) on an ambitious plan to split up the FAA and turn air traffic control responsibility over to a private, non-profit corporation (as Canada did years ago) and keeping safety, research and airport grant functions in the rump FAA.

House Democrats are resisting this plan en masse, and enough Republicans are skeptical (many for the opposite reasons, thinking that the Shuster plan is not private enough) that his bill so far is short of the necessary 218 votes to pass the House. But Shuster is continuing to push his proposal in the belief that he can convince enough of his Republican colleagues to come on board eventually go get to 218 and then force some kind of eventual compromise with the Senate.

(Over the weekend, Shuster was said to be enthusiastic about the new Wall Street Journal editorial commending the ATC reform aspects of his legislation, and the editorial may have increased his willingness to see if he can convert more of his Republican colleagues to his side.)

But if Democrats do capture the Senate, then Shuster’s path in that chamber becomes even more difficult – the main obstacle to Shuster’s plan in the Senate has always been Commerce ranking member Bill Nelson (D-FL) much moreso than Chairman Thune – and if the Senate flips party control, then Nelson and Thune switch jobs next year.