White House Press Secretary Jay Carney looks on at right, as Transportation Secretary Ray LaHood, speaks during daily news briefing at the White House in Washington, Thursday, July, 28, 2011.
July 31: Senate Majority Leader Harry Reid of Nev., second from right, Sen. Charles Schumer, D-N.Y., right, Sen. Patty Murray, D-Wash., left, and Sen. Richard Durbin, D-Ill., walk through the Capitol after a meeting with House Democratic Leader Nancy Pelosi, D-Calif., on Capitol Hill in Washington.AP
After all the pleading and partisan accusations over funding the Federal Aviation Administration, Democratic lawmakers and Obama officials found the answer to ending a two-week shutdown of the agency literally right under their noses.
Transportation Secretary Ray LaHood is sending a letter Thursday, saying a bill that the GOP-led House passed extending the FAA's operating authority through mid-September gives him the power to waive a provision Democrats opposed that cuts $16.5 million in air service subsidies to rural communities.
Now the Democratic-controlled Senate will pass the House bill as early as Friday, allowing 74,000 transportation and construction workers to return to work.
"I am pleased to announce that we have been able to broker a bipartisan compromise between the House and the Senate to put 74,000 transportation and construction workers back to work," Senate Majority Leader Harry Reid said in a statement Thursday without specifying the details.
"This agreement does not resolve the important differences that still remain. But I believe we should keep Americans working while Congress settles its differences, and this agreement will do exactly that," he said.
President Obama said he was "pleased that leaders in Congress are working together to break the impasse involving the FAA so that tens of thousands of construction workers and others can go back to work."
"We can't afford to let politics in Washington hamper our recovery, so this is an important step forward," he said.
Pressure was mounting on a vacationing Congress to break the stalemate by the end of the week as the government was missing out on collecting $30 million a day in airline taxes.
"Come back to Washington. Leave your vacations, just for a couple of hours. Come back, Congress," LaHood said in an appearance at a White House briefing Wednesday.
But the compromise reached Thursday is just between Senate Democrats and the White House since the House already passed their bill, a House source with knowledge of the details told Fox News.
That bill states that the transportation secretary can waive the provision eliminating air-service subsidies to rural communities in Nevada, Montana and New Mexico "if the secretary determines that the geographic characteristics of the location result in undue difficulty in accessing the nearest medium or large hub airport."
"This is a tremendous victory for American workers everywhere," LaHood said in a statement. "From construction workers to our FAA employees, they will have the security of knowing they are going to go back to work and get a paycheck -- and that's what we've been fighting for. We have the best aviation system in the world and we intend to keep it that way."
The deal ends a two-week shutdown marked by partisan sniping over which side was to blame. Some lawmakers kept playing the blame game even after the deal was announced.
"The Republican-driven FAA shutdown has jeopardized tens of thousands of American jobs and caused the Aviation Trust Fund to lose over $350 million in needed revenue," said West Virginia Rep. Nick Rahall, the top Democrat on the House Transportation and Infrastructure Committee.
"The willingness of Democrats to take the high road and allow cooler heads to prevail will enable tens of thousands of American workers to return to their jobs until Congress does its job to finish a long-term FAA reauthorization."
Three civil engineers who were in Washington to lobby Congress for a funding extension rejoiced at the news.
"Yes, I can pay my mortgage," one engineer said. But they're still concerned they'll be back in the same boat a few months later.
Indeed, the fight is likely to resume in September when Congress tries to pass the first long-term extension bill in four years.
"Upon Congress' return our first action must be to pass a full four year authorization for the FAA so this irresponsible episode is not repeated," Rep. Frank LoBiondo, R-N.J. said, adding that he will focus on getting backpay for South Jersey workers "affected by Washington's dysfunction."
House Democratic leader Nancy Pelosi said passengers charged federal taxes for travel scheduled during the shutdown or forced to pay higher fares by some airlines should be refunded.
Fox News' Trish Turner and Chad Pergram contributed to this report.