By JOAN LOWY

WASHINGTON (AP) -- A stalemate that has partially shut down the Federal Aviation Administration will continue into September. A spokesman for Senate Majority Leader Harry Reid says Senate Democrats were unwilling to accept cuts in subsidies for rural air service.

House Republicans had demanded the $16.5 million in subsidy cuts as part of a bill to continue the FAA's operating authority. Senate Democrats repeatedly tried and failed to pass their own bill without the cuts.

The FAA's operating authority expired 11 days ago, as well as the authority of airlines to collect about $30 million a day in ticket taxes. If allowed to continue until Congress returns to work next month, the cost in lost revenue will be an estimated $1.2 billion.

Nearly 4,000 FAA employees have been laid off.

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