The Economic Impacts Of The FAA Sequestration

As a consequence of the Joint Select Committee on Deficit Reduction’s failure last year to come up with a deficit reduction plan in accordance with the Budget Control Act of 2011, sequestration of the federal budget was scheduled to begin with the FY 2013 budget and continue for eight years after that. Approximately one half – or $500 billion – would be cut from nondefense spending, including the Federal Aviation Administration (FAA).

Econsult Corporation was engaged by the Aerospace Industries Association (AIA) to conduct an analysis of the economic impact of sequestration to the civil aviation industry and to the national economy as a whole. Econsult estimated two scenarios of negative impacts generated from the sequestration, looking at employment, earnings, and lost tax revenue.