The FAA Meltdown – How Washington Broke Something that Worked

“We’re not going to wait for a safety problem to truly manifest itself when the early indicators are telling us we can take action today to prevent things from deteriorating.” — FAA Administrator Bryan Bedford, November 5, 2025, announcing 10% flight cuts at 40 major airports

Translation: “We’re cutting 3,000-5,000 flights a day because Congress can’t figure out how to spend money that’s already sitting in the bank.”

This is what government incompetence looks like when it actually matters.

The Setup: A System That Was Actually Working

For 55 years—since 1970—the FAA has operated under a deceptively simple system. Airlines and passengers pay user fees: 7.5% excise tax on tickets, $4.50 per flight segment, cargo taxes, fuel taxes. These fees go into the Airport & Airway Trust Fund, which funds roughly two-thirds of the FAA’s $23.3 billion budget.brookings​

It’s self-funding by design. Not perfect, but functional. A Boeing 737 from New York to Los Angeles generates roughly $45-60 in FAA fees per passenger (tickets, segments, fuel)—money that goes directly into air traffic control systems, runway maintenance, and controller salaries.

For 55 years, this worked. Planes flew safely, controllers got paid, and the system hummed along because—and here’s the key—it wasn’t subject to the political theater of Congressional budget negotiations.

Until now.

The Current Crisis: Congress Broke It Deliberately

It’s now November 6, 2025—37 days into a government shutdown that has become the longest in U.S. history. Nearly 13,000 air traffic controllers have been working without pay for more than a month. Controllers are working mandatory six-day weeks with overtime because staffing is so depleted that the system is on the verge of collapse.cnn+1​

Last weekend saw 98 staffing trigger incidents—moments when controllers had to reroute flights or slow them down to maintain safe spacing because there weren’t enough bodies in the tower.cnn​

Half of the FAA’s “Core 30” facilities (the nation’s busiest airports) are experiencing shortages. At New York-area facilities, 80% of air traffic controllers called out at various points, forcing the FAA to announce it will cut flight capacity by 10% at 40 major airports starting Friday.abcnews.go+1​

That means 3,000-5,000 fewer flights per day. At every major hub: Atlanta, Dallas, New York, Chicago, Los Angeles, Denver, Phoenix, Boston, San Francisco—all cutting 4-10% of their capacity.cbsnews​

And for what? Not because the system is underfunded. Not because controllers don’t deserve to be paid. But because Congress refuses to appropriate funds that have already been collected by the Aviation Trust Fund.

The Obscene Reality: The Money Exists

Let’s make this crystal clear with Warren’s analysis:

• • FAA annual budget: $23.3 billion

  • Aviation Trust Fund annual collections: $15-17 billion

  • Trust Fund balance (sitting in Treasury right now): Substantial

The math is simple: If the trust fund collects $16 billion in user fees, and the FAA budget is $23.3 billion, that means $7-8 billion comes from general Treasury appropriations. But during a shutdown, Congress hasn’t appropriated anything—not even though the trust fund money is still flowing in.

Airlines are still collecting the 7.5% excise tax. Passengers are still paying the $4.50 segment fee. FedEx is still paying cargo taxes. The money is arriving.

But the FAA can’t legally write payroll checks without a Congressional appropriation, even though the money exists in the account.

That’s not economics. That’s deliberate strangulation!

The Architects of Chaos

Who wanted this? Let’s trace the politics:

Speaker Mike Johnson allowed the government to shut down rather than pass a continuing resolution that would fund the government through the current budget cycle. His leverage is the threat of government dysfunction. The more pain, the more he can demand concessions.

Trump benefits from the chaos. A dysfunctional government justifies his military recruitment narrative (“war from within,” remember?). A crashed FAA justifies emergency powers. wsws​

Transportation Secretary Sean Duffy, in his Wednesday announcement of the 10% flight cuts, had the audacity to praise controllers as “patriotic Americans” for showing up to work without paychecks. Translation: “Thank you for sacrificing your mortgage payments so we can score political points.” govexec​

And Congress—both parties—sat in their offices collecting paychecks while essential workers chose between paying rent and keeping the aviation system alive.

The Infuriating Part: This Has an Easy Fix

Here’s what should make every American rage-quit their job: This problem is trivially solvable.

Option 1: Emergency Appropriation — Congress passes a one-sentence bill: “The FAA is authorized to spend funds from the Airport & Airway Trust Fund for all operational expenses, including payroll, without further Congressional approval until the government shutdown ends.” Done in 30 minutes.

Option 2: Permanent Fix — Raise the aviation user fees by 3% ($6 billion annually) and make the FAA 100% self-funded from the trust fund. No more dependency on Congressional appropriations. No more shutdowns affecting air traffic control. Controllers get paid automatically. System doesn’t break. Airlines and passengers fund their own regulatory infrastructure.

That’s it. Both solutions are available. Both would work immediately. Neither requires rocket science or constitutional amendment.

But neither happens because Congress wants the leverage…

The Human Cost: Controllers Working for Free

While bureaucrats debate abstract principles, real people are suffering.

Air traffic controllers earn $50,000-$200,000 annually depending on seniority and facility. They work 40-hour weeks that have become 50-60 hours due to understaffing. They live in expensive cities: New York, Atlanta, Chicago, Los Angeles—places where missing three weeks of pay means choosing between mortgage payments and food.

Controllers are calling out not because they’re lazy—they’re calling out because they’re broke.

Airlines are providing meal vouchers, hardship loans, and advance checks to keep controllers showing up. American Airlines, Delta, Southwest, United—all of them are supplementing federal workers’ pay because Congress won’t.foxbusiness​

Think about that for a second. Private corporations are funding federal employees because Congress created the crisis deliberately.

One controller, on Reddit: “I’ve worked here 12 years. Never missed a shift. I have a wife and a mortgage. We’re fine for two weeks. By week four, I’m in survival mode. I’ve got buddies looking at other jobs. Some are taking TSA positions just to get paid. This is madness.”

That’s not patriotism. That’s coercion.

The Economic Cascade: When the System Breaks

Here’s what most financial media isn’t covering: The FAA breakdown exposes something much larger about American systemic risk.

A 10% capacity cut at 40 major airports doesn’t just delay people. It:

• • Disrupts supply chains — FedEx, UPS, Amazon can’t move cargo through hub cities

  • Strands business travelers — Corporate meetings cancelled, deals delayed

  • Cascades delays nationwide — A backed-up Atlanta means ripple effects in Denver, Phoenix, Dallas

  • Increases airline losses — Revenue per flight stays the same; capacity per day drops 10%

  • Spikes volatility in travel-dependent sectors — Hotels, rental cars, tourism operators lose revenue

If the shutdown lasts another 2-3 weeks, we’re looking at billions in lost economic activity, not from market forces, but from deliberate government dysfunction.

And nobody’s pricing this into the market properly because everyone assumes Congress will cave before actual systemic damage occurs.

What if they don’t?

The Gonzo Reality: We’re Breaking Systems on Purpose

This is the most depressing part. The FAA system was designed to insulate critical infrastructure from political theater. The trust fund structure exists specifically to prevent this.

And Congress is deliberately violating its own design to create leverage.

• • Mike Johnson: “We need concessions on healthcare subsidies.”
  • Controllers: “We’re literally unable to eat.”
  • Passengers: “My flight to my mother’s funeral just got cancelled.”
  • System: “Cutting 10% capacity.”

It’s like watching someone deliberately flood their own basement to prove a point about plumbing costs.

The Fix That Won’t Happen

Phil Davis has proposed a solution is elegant and obvious:

“Make the FAA self-funding. Let aviation user fees fully fund air traffic control. Remove Congressional appropriation from the equation. Controllers get paid automatically from trust fund money.No shutdown can touch it. No political hostage-taking. System continues regardless of Congressional dysfunction.”

This is exactly the kind of “smaller government” solution that every fiscal conservative should embrace. Smaller government means independent agencies that don’t rely on Congressional votes to operate. Let the market fund infrastructure that the market uses.

But it won’t happen because Congress—both parties—likes having leverage but Phil’s solution will still leave them with oversight.

The Market Implications: When Systems Fail

Here’s what investors should understand: We’re watching a critical government system break deliberately, not because it’s broken, but because Congress wants political leverage.

If Congress can break the FAA to score political points, they can break anything.

• • FDA approval processes get delayed — pharmaceutical companies lose billions

  • Patent office grinds to halt — tech companies lose IP protection

  • OSHA inspections stop — workplace safety monitoring disappears

  • EPA enforcement pauses — environmental violations go unchecked (of course, this is Trump’s actual plan)

Every critical system is now hostage to Congressional dysfunction.

The value destruction isn’t coming from economic cycles. It’s coming from deliberate systemic sabotage.

The Gonzo Bottom Line

The FAA crisis is the perfect microcosm of American government failure: A system that was actually working, deliberately broken for political leverage, destroying lives and economic value, with an obvious fix that nobody implements because the dysfunction serves political purposes.

13,000 air traffic controllers working without pay. 3,000-5,000 daily flight cancellations. Billions in economic disruption. For what? So Congress can argue about healthcare subsidies?

This isn’t governance. It’s hostage-taking.

And the most infuriating part? People do know how to fix it. People can see the problem clearly. But the system rewards dysfunction over solutions.

Holy shit, indeed.

Welcome to America 2025: A government so broken it’s cutting flights deliberately, so we understand how broken it is—and then the very people who broke it will use the resulting chaos to justify giving themselves more power.

As Hunter S. Thompson might say: “The only thing that grows faster than government incompetence is government’s creative use of that incompetence to consolidate more control.”

The aviation system didn’t fail. Congress broke it on purpose. And unless someone forces them to fix it, the FAA will become yet another critical infrastructure held hostage by political theater.

Buy the ticket, take the ride. But remember—on this flight, the pilots are arguing about compass calibration while the engines are failing.​

Sources: FAA, Transportation Department, CNN, ABC News, CNBC, PBS News, Fox Business, CBS News, Brookings Institution, Warren’s research analysis, and the screaming ghosts of every functional system Congress deliberately broke to avoid governing.