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Government shutdown hitting small businesses, federal workers

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Government shutdown hitting small businesses, federal workers

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With the partial government shutdown stretching into 2019, here’s what you need to know about the effects.
USA TODAY

Sam Samhouri’s corner cafe in Oakland sits on what might normally be considered a prime piece of real estate: Directly across the street from an 18-floor office building.

The problem for Samhouri is that the campus that supplies most of his customers is the Ronald V. Dellums Federal Building. That means many of his lunchtime regulars have been furloughed by the partial government shutdown now in its second week.    

“There’s nobody there,” said Samhouri, whose City Cup cafe employs three people. 

As the shutdown entered its 11th day on News Year’s Day there were signs the lapse was beginning to have an effect, not just on the hundreds of thousands of  federal employees who have been furloughed or forced to work without pay but also on the businesses and industries that rely on them.   

While the impact has beenobscured by Christmas, when government offices were already scheduled to be closed, it may become more pronounced as much of the nation returns to work Wednesday. Some businesses are waiting on government loan approvals. Others, located near federal buildings or national parks, are worried about losing their customer base.   

More: The government shutdown is here. How does it affect you?

The shutdown began Dec. 22 when President Donald Trump and congressional Democrats failed to reach an agreement over White House demands for as much as $5 billion in additional  funding for a border wall. With both sides dug in, there has been little indication that the impasse will be resolved quickly. 

National parks remained open, though some reduced their services. Smithsonian museums in Washington have accommodated visitors so far, but are expected to close this week. Social Security checks have continued and airport screeners remain at work.

But for many, the impact has been tangible. 

Federal workers hit

“This time it’s going to hurt a lot more because of the time of year it is,” said Justin Tarovisky, a corrections officer at a federal prison in West Virginia and the executive vice president of the local American Federation of Government Employees union.

“We work in a tough environment,” Tarovisky said. “Not only does it linger in the back of your mind, it kind of drives morale down a little bit.”

Though there is a heavy concentration of federal workers in the Washington region, the majority of federal employees work outside of the nation’s capital. California, Texas, Florida and Georgia, for instance, account for about 20 percent of the overall civilian workforce, according to data from the Office of Personnel Management.

In the past, including the 16-day shutdown in 2013, federal workers received back pay. But that outcome is not guaranteed because it requires Congress and the White House to work together to pass a law mandating the back pay. 

“I think one day of a shutdown is too much,” said Ryan Baugh, who works for the Office of Immigration Statistics at the Department of Homeland Security and is an AFGE steward in the office. “As it goes on the effects will be more strongly and widely felt.”    

Both Tarovisky and Baugh stressed they were speaking on behalf of the union, not their agencies. The AFGE sued the Trump administration on Monday, claiming it is illegal to require “essential” government employees to work without pay.    

While Trump has delayed his annual trip to Florida to remain in Washington during the impasse there was little evidence negotiations to resolve the standoff were underway. Trump and congressional Democrats continued to trade partisan jabs, a sign that officials were no where close to a deal to reopen shuttered agencies.

I’m in the Oval Office. Democrats, come back from vacation now and give us the votes necessary for Border Security, including the Wall. You voted yes in 2006 and 2013. One more yes, but with me in office, I’ll get it built, and Fast!

— Donald J. Trump (@realDonaldTrump) December 31, 2018

House Democrats, who will take control of that chamber Thursday, were readying a proposal to reopen the government by providing full-year funding for most departments. The proposal would fund the Department of Homeland Security through Feb. 8, giving both sides additional time to strike a deal on border security.  

“This legislation reopens government services, ensures workers get the paychecks they’ve earned and restores certainty to the lives of the American people,” House Democratic leader Nancy Pelosi and Senate Democratic leader Chuck Schumer said in a joint statement on Monday.  

 It was not immediately clear if Trump would accept the proposal. 

“Democrats, come back from vacation now and give us the votes necessary for Border Security, including the Wall,” Trump tweeted on Monday. 

Small businesses waiting

The lack of progress has left some small businesses in in the lurch. 

When Andrew Rickabaugh and his brother-in-law decided to start a restoration business this year in Huntsville, Alabama, they reached out to the Small Business Administration to a guarantee a loan to help them buy equipment.

The process was going smoothly – Rickabaugh said he expected approval around Christmas – until the shutdown hit.

The Small Business Administration guaranteed over $30 billion in loans to companies in the fiscal year that ended in 2017 but processing of most loans was suspended when the agency closed. Rickabaugh couldn’t reach local SBA officials in Alabama. 

“We’re having to do things a little differently than maybe we had planned,” said Rickabaugh, whose company, Rick-N-Ball Restoration, fixes damage caused by water, mold, smoke and other hazards. “It’s unfortunate that the inability of politicians to come to an agreement [means] people like us…pay a price.”

Rickabaugh said he’s pushing forward with the business, relying on his own credit. He described the government shutdown as a “speed bump that we will overcome whether that loan comes through or not.”

Officials near federal park lands remained concerned about how an extended shutdown might affect local businesses. In Florida, most of the state’s federal wildlife refuges and parks were at least partially open Monday. And that meant fishing and birding guides, as well as other services, were also open – for now. 

Everglades City Mayor Howie Grimm said keeping those businesses running is crucial to protecting his town. 

“If they would shut them down, that would hurt for sure,” Grimm said. “Hopefully, they can get things worked out and the country can go back to work.”

More: Donald Trump, venting fury over budget fight, threatens to close border

Contributing: The (Fort Myers, Fla.) News-PressBart Jansen 

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