FAA furloughs thousands amid congressional funding stalemate

CHICAGO (Reuters) - The Federal Aviation Administration, the arm of the U.S. Department of Transportation responsible for air passenger safety, furloughed about 4,000 of its workers on Saturday after Congress failed to reauthorize the agency's funding.

The partial shutdown, which the agency said will not affect air traffic controllers or force any flight cancellations, came after Congress adjourned Friday without extending the FAA's funding.

The furloughs will, however, prevent the FAA from collecting the ticket tax revenue that pays for other agency employees.

As a result, Transportation Secretary Ray LaHood warned the partial shutdown would immediately filter into the private sector, including the hard-hit construction industry, by bringing about $600 million in airport improvement projects around the country to a standstill.

The furloughs will also bring the agency's certification of new products being developed by aerospace companies to a halt.

The stalemate in Congress, which comes during the peak summer air travel season, does not reflect a substantive disagreement over the agency's basic financing needs.

The House of Representatives has approved a four-year, $60 billion budget for the FAA, while the Senate has passed a two-year, $34.5 billion budget for the agency.

But efforts to harmonize the House and Senate measure have faltered because Republicans have inserted a number of controversial provisions into the proposed compromise, including a measure that would make it harder for airline and railroad employees to unionize.

(Writing by James B. Kelleher; Editing by Tim Gaynor)