WASHINGTON -(Dow Jones)- Senate legislation to modernize the nation's outdated air traffic control system and bring travelers relief from delays was halted on a procedural vote Tuesday. The failed vote might spell the end of efforts to reform the FAA and to fund needed improvements until next year.

The bill failed on a 49-42 vote, well shy of the 60 votes necessary to limit debate on it, as Republicans voted nearly unanimously against cutting off debate.

Democrats and Republicans are in broad agreement on the aviation fixes included in the bill. But two weeks of closed-door negotiations on the legislation devolved into partisan disputes over non-aviation provisions important to Democrats, including a $1.6 billion allocation for New York City transit projects.

Senate aides said that, despite the failed vote, key senators and staff will continue to work towards agreement before the current FAA authority expires June 30. But as hopes dimmed for a successful vote Tuesday, lawmakers and industry officials were already beginning to mull a short-term extension of that authority that wouldn't include broader reforms.

Sen. John Rockefeller, D-W. Va., a lead author of the Senate bill, said the vote was a blow to efforts to modernize an air traffic system that could have to handle one billion passengers by 2025. "A billion passengers are going to be using it, and they're going to be using it on a Polaroid-camera technology system," he said on the Senate floor.

The bill would have re-authorized the Federal Aviation Administration through 2011 and provided $750 million in new funding to upgrade the nation's air traffic control infrastructure. It would have bolstered passenger-protection provisions, for instance by requiring government approval of airline plans for aiding passengers caught in lengthy tarmac delays.

Republicans proposed an alternative, offered by Sen. Kay Bailey Hutchison, R- Tex., that would have made all those changes but didn't include a revenue infusion to the highway trust fund that was part of the Democratic bill. It also left out tax increases on offshore firms to pay for the highway money, and an authorization of $1.6 billion to be used for New York City transportation improvements.

In negotiations this weekend, Democrats offered to bend on the highway funds and the tax provisions, Rockefeller said on the Senate floor. But according to Rockefeller, Republicans insisted that they also drop the New York funds, which could be used for a rail link between John F. Kennedy International Airport and lower Manhattan.

Democrats refused to back down on the New York City provision, championed by Sen. Charles Schumer, D-N.Y., the powerful chairman of the Democratic Senatorial Campaign Committee.

"The New York bond (provision) was simply off the table," said Rockefeller. " Other than that, it seemed to me we could get everything worked out."

But Hutchison said Republicans were denied even the chance to offer an amendment to strip out the New York funds.

"If those projects can stand on their own, let's vote on those projects alone. To try to put non-aviation taxes on an aviation bill is going to bring this bill down," Hutchison said on the Senate floor.

Besides opposing the New York City funds, Republicans were incensed that Senate Majority Leader Harry Reid, D-Nev., used a parliamentary tactic to prevent them from offering any amendments to the bill other than those he favored.

The House has passed its own version of FAA legislation, which includes some measures strongly opposed by the White House. It would re-open negotiations on the contract that now governs air traffic controllers, and would also alter labor provisions governing express delivery giant FedEx Corp. (FDX).

One Senate Democratic aide said that, if action on the FAA bill remains stalled this year, Democrats may use potential gains in November's elections to write an FAA bill next year that Republicans will like even less.

Unless they can revive the FAA bill, the aide said, lawmakers may opt for a 15-month extension to re-authorize the agency through September 2009.

-By Martin Vaughan, Dow Jones Newswires; 202-862-9244; martin.vaughan@ dowjones.com

  (END) Dow Jones Newswires
  05-06-08 1521ET
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