Shutdown pain

As the partial federal government shutdown entered its seventh day Monday, there’s some concern that if the situation continues for too long there will be an impact on local economies across the country.

“Right now people are mostly inconvenienced by this shutdown. But if it continues and we don’t address the escalation of the nation’s debt ceiling so that we can pay back those who have loaned money to the federal government, that could be much worse,” said Terry Tamburini, executive director of the Southeastern Ohio Port Authority and economics professor at West Virginia University Parkersburg.

On Oct. 17 the government will no longer be able to borrow money, and will effectively be in default on its debts, which currently total $16.7 trillion.

“The debt ceiling has to be addressed,” Tamburini said. “This is a responsibility that the American people has to the rest of the world. We don’t want to break our contracts with those countries that have invested in our economy.”

He said going into default would likely have a negative impact on investments in the stock market and cause interest rates to increase which would affect borrowing and slow construction and other economic activity.

“We’re really just emerging from the recession of 2008 and 2009,” Tamburini added. “People are still slow in their spending, and if this government shutdown continues into default people could re-entrench as they feel they’re losing control of their resources and can’t plan for the future.”

He said freedom is reduced because people don’t have access to the resources they need to improve their lives.

Bill Chambers, 76, of Williamstown was making a purchase at the Peoples News store in Marietta Monday afternoon and said he has some concerns about the impact of the shutdown on his and wife Eva Mae’s budget.

“If it comes down to that we would have to cut back more on our spending,” he said. “We’re both on Social Security and have a limited income anyway. And if we lost that I don’t know what we would do.”

In a speech last week President Barack Obama noted Social Security checks continue to be sent on time during a government shutdown, but would not go out on time if there’s an economic shutdown due to a failure to address the debt ceiling issue.

According to information on the AARP web site, approximately 22 million Americans rely on Social Security to keep them above the poverty line.

Some impact is already being felt on the local economy as some area federal government workers have been furloughed due to the shutdown, including Internal Revenue Service and U.S. Fish and Wildlife employees.

“They can’t spend what they don’t earn, but they still have to pay their bills, and this is really tough on those living paycheck to paycheck,” noted Charlotte Keim, executive director of the Marietta Area Chamber of Commerce.

She added if the government goes into default and the stock market takes a dive, a lot more people will be impacted by the shutdown.

“That’s because most people’s retirement funds are heavily invested in the stock market,” Keim said.

Pam Lankford, director of the local Small Business Development Center in Marietta, said the shutdown is impacting her office’s budget.

“We operate on federal, state and local dollars, but the state and local monies are used to leverage the federal funds,” she said. But because of the shutdown that began Oct. 1, the office is having to depend on its state and local monies to continue operations.

“And we do not have lots of funding, we just maintain enough to leverage the federal funding,” Lankford said. “If this continues for a long period of time I’m going to have to make a difficult decision on what to do.”

She said if the office would have to close it could no longer provide services to assist small businesses in this area.

Dave Brightbill is executive director of the Washington Morgan Community Action Agency that oversees the local Head Start program as well as the housing rental assistance program for the U.S. Department of Housing and Urban Development

“We’re still allowed to draw down funding for Head Start,” he said. “And just prior to the Oct. 1 shutdown we received an e-mail saying Head Start would be exempted from those programs that would not be funded.”

But Brightbill noted there have been some agencies in other areas reporting a problem with accessing the Health and Human Services payment services program that is used to draw down funding for Head Start.

He said that may be due to a computer glitch, but if the federal workers who maintain the computer equipment have been furloughed, the problem may not be fixed.

If the government shutdown continues, one big concern for Community Action would be the ability to cover housing rental assistance payments for clients as HUD funding could be impacted, especially if the debt ceiling is not addressed.

“Although most of the landlords we deal with know they will eventually get their money, they have bills and mortgages to pay, too,” Brightbill said. “There’s total uncertainty right now with this shutdown, and no one knows how long it will last.”