Thousands of Jobs at Risk in US Airport Fight-LaHood

By Lisa Lambert

WASHINGTON (Reuters) - Thousands of construction workers will lose their jobs and $2.5 billion in airport projects will come to a halt this weekend if Congress does not quickly approve new federal aviation funding, the Obama administration warned on Thursday.

Projects in all 50 states would be affected but California, Florida, New York and Georgia stand to lose the most money if lawmakers to do not sort out political differences in legislation to temporarily pay for certain Federal Aviation Administration operations.

"If we are not able to fund these projects these people that are working on these projects will have to leave the job site on Saturday," Transportation Secretary Ray LaHood told reporters in a conference call.

In addition, LaHood's agency said up to 4,000 FAA employees would be furloughed if Congress does not act by Friday night when current funding authorization expires.

Air traffic operations would not be affected by the budget shortfall, but airlines would not be allowed to collect some $200 million per week in ticket taxes, LaHood said.

At issue is a bill the House of Representatives approved on Wednesday to extend federal spending for airports and airways across the United States through Sept. 16.

The Senate has said it will not pass the bill, previously a routine task, due to a proposal in the House plan that would cut some subsidies to airlines that operate flights to underserved, mainly rural areas.

The proposal would save taxpayers $12.5 million, according to the Republican-led House Transportation Committee.

Democrats complain Republicans are playing politics with the measure -- pushing service cuts in the home states of Senate Leader Harry Reid of Nevada and Finance Committee Chairman Max Baucus of Montana.

Republicans, led by Transportation Committee Chairman John Mica, are highly critical of air subsidies that exceed $1,000 per passenger in certain airports, including Ely, Nevada, and Glendive, Montana. The House bill also targets service at Alamogordo/Holloman AFB in New Mexico.

LaHood, a former member of Congress and one of the few Republicans in President Barack Obama's Cabinet, said he is confident that Congress can pass an extension without any side proposals, like the service cuts.

California would lose $131.5 million, Florida $88 million, Georgia $67.1 million, and New York $62.6 million, in any partial shutdown of FAA operations, the Transportation Department said.

Construction on the O'Hare airport modernization project in Chicago will continue, according to the FAA. But the agency will not be able to fulfill a $9 million grant for a new taxiway, delaying construction of the new path, unless the funding measure clears.

(Reporting by Lisa Lambert)