Continued inaction by Congress will cost the U.S. more than $1 billion in tax revenue and has already cost 70,000 construction jobs and 4,000 jobs at the Federal Aviation Administration, Transportation Secretary Ray LaHood told CNBC Tuesday.
"We’re right smack dab in the middle of construction season. There are 70,000 workers off job sites today because Congress can’t get their act together and can’t compromise," he said.
The holdup is a product of a quarrel between Senate Democrats and House Republicans who are demanding a $16.5 million cut in rural air service subsidies known as essential air service, or the money that’s paid small airports so planes can fly in and out.
The shutdown lifted the requirement for airlines to collect certain ticket taxes, resulting in a loss of $250 million in revenue so far that would have gone to a trust fund that helps pay for airport infrastructure projects. A shutdown through August would raise that total to more than $1 billion.
LaHood blasted conservatives who belied their own rhetoric by not acting on the FAA's funding during the debt-ceiling negotiations.
"If this is not resolved there’ll be $1 billion in taxes that aren’t collected," LaHood said. "So for all these conservative politicians who are worried about the debt and deficit, $1 billion in taxes will not come into the coffers if this continues…That isn’t the way to create revenue, in my opinion."
In addition, "this is a time when we hear politicians talking a lot about creating jobs. Well, this is not the way to create jobs by laying off 70,000 construction workers."
The FAA's long-term operating authority expired in 2007. Since then, Congress has been unable to agree on a long-term funding plan. The agency has continued to operate under a series of 20 short-term extensions.