WASHINGTON (Reuters) - A deal in Congress to end a two-week standoff over U.S. aviation funding presaged a larger and more acrimonious fight over labor unions, financing air traffic modernization and other issues this fall.
The impasse over a surprising proposal to cut $16 million in government subsidies to airlines that provide service to rural communities was less about aviation and spending, and more about escalating partisan rancor and overhang from the political wildfire on raising the multitrillion-dollar U.S. debt limit.
Industry insiders, lawmakers and aviation officials all expect the divided climate in Washington to define final negotiations on a long-term legislative blueprint for FAA budgeting and aviation priorities, like modernizing the aging air traffic control system.
The previous multiyear congressional authorization for aviation programs expired in 2007, and lawmakers have struggled to negotiate a new one. Bills passed by the House and the Senate must be reconciled by a committee comprised of members from both houses.
But overshadowing negotiations, which have yet to start, is the FAA shutdown and its choppy political wake.
"If the Senate refuses to negotiate on the few remaining issues, they can be assured that every tool at our disposal will be utilized to ensure a long-term bill is signed into law," said Rep. John Mica, the chairman of the House Transportation Committee.
It was Mica's proposal on subsidy cuts that triggered the two-week impasse in Congress that held up legislation to fund full FAA operations through mid-September.
That standoff ended on Friday with the Senate swallowing Mica's bill, which included wiggle room for the Transportation Department to waive any reduction in rural airline flights for the time being.
Underlying the subsidy fight was a contentious proposal in the long-term aviation bill by the Republican-led House to roll back a federal rule pushed by Obama administration appointees making it easier to organize labor unions at airlines.
Democrats insist the measure was inserted at the behest of mostly non-union Delta Air Lines. Unions, an important constituent of Obama and Democrats, have failed multiple times to organize major work groups outside of pilots, who are represented by the Air Line Pilots Association.
"There is no agreement in Congress to make this change to workers' rights. Insisting it be included in the FAA bill will only cause more economic uncertainty," said Rep George Miller, the senior Democrat on the House Education and Workforce Committee.
All other major airlines are heavily unionized.
John Rockefeller, Mica's counterpart in the Senate as chairman of the Commerce Committee, has promised a showdown on the union issue as well, saying that conservative Republicans want to "undo worker protection" and "may again block progress" on FAA legislation.
Rockefeller accused Republicans of holding the "entire aviation system hostage" during the airline subsidy dispute that resulted in the temporary shutdown of FAA airport construction projects. Funding for those are expected to resume this week.
U.S. airlines, including Delta, United Airlines and American Airlines, and other businesses, such as aircraft manufacturers Boeing Co and Europe's Airbus, are eager for action on the long-term bill.
They do not favor everything in the legislation but strongly promote efforts to accelerate the transformation of U.S. air traffic control to a satellite-based navigation system. They anticipate that change will allow for dramatic advances in aircraft systems and design, more efficient use of air space, and fuel savings associated with flying more direct routes.
Editing by Maureen Bavdek