Government Shutdown, Uncertainty Continue To Pinch Businesses

Government Shutdown, Uncertainty Continue To Pinch Businesses

Some restaurants report sales are down 60 percent

| Published:
Government Shutdown Sign in front of Lincoln Memorial

The federal government shutdown, in its 31st day Monday, continues to have far-reaching economic impacts across the county, business leaders say.

The partial shutdown is “hitting every type of business,” said Ginanne Italiano, executive director of the Greater Bethesda Chamber of Commerce. “The banks are dealing with it. They’re being impacted as far as people saying, ‘Can I get an increase in my line of credit?’”

Italiano said that she has heard anecdotally from restaurants and bars, which are feeling the pinch.

The 13 hotels that are members of the chamber, she said, aren’t suffering as much because of conferences still being held, attracting out-of-town guests.

Over the weekend, the Montgomery County Chamber of Commerce sent a survey to its members to gauge the impact of the record shutdown.

Kathy Hollinger, president and CEO of the Restaurant Association of Metropolitan Washington, said restaurants in the region are reporting a 20 percent average decrease in sales, and some have had drops as great as 60 percent.

Restaurant operators have reported that they are worried about making payroll and have had to reduce hours, cut staff, temporarily reduce the days they are open, and some considered taking out loans to stay afloat, she said.

“The federal government shutdown is the longest shutdown in our nation’s history and the impact is far reaching and severe,” Hollinger said. “It goes beyond the furloughed employees and people working without pay, and extends to the ancillary businesses dependent on the patronage of those who are no longer receiving a pay check.”

The shutdown, which began at midnight Dec. 22, came after Congress would not appropriate $5 billion requested by President Trump for a wall on the U.S.-Mexico border.

There are about 80,000 federal workers in Montgomery County. Additionally, more than 44,000 federal contracts were awarded to companies in the county in fiscal 2017, according to the Montgomery County Economic Development Corp.

Trump signed legislation last week that will guarantee back pay to federal workers once the shutdown ends. Additionally, Sen. Chris Van Hollen (D-Md) was among 33 senators earlier this month sponsoring a bill ensuring back pay to contractors, although it is not clear whether that will pass.

Maryland Comptroller Peter Franchot has warned of an oncoming recession. A Jan. 14 report from his office estimated that 172,000 Marylanders were affected by the shutdown, resulting in $778 million in lost wages every two weeks, as well as $57.5 million lost in income tax and $2.1 million lost in sales tax collections.

With congressional leaders no closer to reaching a deal that would end the shutdown and the possibility of a recession soon, Italiano said the climate of uncertainty “hasn’t helped” when it comes to encouraging people to spend money.

“People are very fearful, because they don’t see an end in sight. How long can this go?” she said.

Dan Schere can be reached at Daniel.schere@bethesdamagazine.com

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