On the brink of government shutdown — again

David Gura Sep 22, 2011

On the brink of government shutdown — again

David Gura Sep 22, 2011

Bob Moon: Don’t bother stopping me, ’cause I know we’ve heard this one before: Congress is scrambling to avoid a government shutdown.

This has already played out — and been narrowly averted — twice this year. Now, lawmakers are paralyzed over how to pay for disaster relief. Congress is on recess next week. So if there’s no agreement over this weekend, the federal lights go out on October 1st. Which has businesses wondering and worrying anew whether total government dysfunction is now the new normal.

Marketplace’s David Gura reports.

David Gura: Karen Petrou advises big banks and private equity investors. She’s paid to explain the ways of Washington.

Karen Petrou: What they want to know is, what is the government going to do?

So they can figure out how to invest their money. These days, Petrou’s clients are confounded by Congress.

Petrou: Bringing the country to the brink — for fun, essentially — is viewed by, at least the business people we speak with, as enraging.

Government contractors are most directly on the hook.

Stan Soloway: If there is a shutdown, this is the sector of the economy that gets hit the hardest.

That’s Stan Soloway. He heads the Professional Services Council, a contractor trade association. Soloway says these companies need predictability they’re not getting.

Soloway: So from any business perspective that creates tremendous challenges.

They’re worried about getting paid now and in the future. As the government fights over long-term funding, contracts are up in the air.

Dan Meckstroth is with the Manufacturers Alliance. He says this hold-up in contracts has a ripple effect, from the government to contractors, to other companies.

Dan Meckstroth: Whether they’re directly related to the government contract, or they’re just in the supply chain of a government contract.

Because manufacturers make a lot of the components government contractors use. This is really all about how to get companies to invest and grow. Karen Petrou says that’s hard with this — the new normal.

Petrou: The money, the prudent money, is on the sidelines. And I don’t know how to get it out until Congress can get its act together.

In Washington, I’m David Gura for Marketplace.

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