Federal Shutdown Stanches Cash Flow for Some Businesses

Federal Shutdown Stanches Cash Flow for Some Businesses

Concern mounts that the county’s business climate is becoming unstable due to frequent work stoppages

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As federal government partial shutdown enters its 14th day, with no clear end in sight, the anxiety brewing on Capitol Hill is filtering to some Montgomery County businesses and contractors.

“They’re dealing with their banks and having to tap into their line of credit … You’re trying to hang onto cash, because you don’t have any cash coming in,” said Barbara Ashe, who is the executive vice president of the Montgomery County Chamber of Commerce.

The shutdown affects about one-quarter of the federal government, involving about 800,000 employees nationally, and some based at federal agencies in the county.

Bloomberg Government estimates that 3,500 small businesses in the county depend on the federal government.

As the Democrats assumed their new majority in the House of Representatives Thursday, speaker Nancy Pelosi (D-Calif) said she planned to meet Friday with President Trump and other congressional leaders to discuss funding for border security.

A number of government agencies shut at midnight Dec. 22 when Congress declined to grant Trump’s request of $5 billion in funding for construction of a wall on the U.S.-Mexico border. Trump is reported to have told Democratic congressional leaders Friday that he was willing to keep government closed for “months or even years” according to The Washington Post.

U.S. Sen. Chris Van Hollen, a Maryland Democrat, reintroduced legislation Thursday along with 25 other senators to ensure retroactive pay to furloughed employees.

Van Hollen, during an appearance earlier in the week on MSNBC, said he had been hearing from Republican senators about concerned federal contractors who work outside of Washington.

“They work in places around the country. But the folks who are really getting squeezed and who will never be made whole after the shutdown are a lot of these small business contractors,” he said during his appearance on “All In With Chris Hayes.”

Molly Gimmel, the CEO of the Bethesda-based defense contractor Design To Delivery Inc, said her company has one contractor who is working with the National Institutes of Standards and Technology, based in Gaithersburg. In the wake of the shutdown, the company has had to furlough two employees.

Gimmel said her company hasn’t taken a hit financially, but she knows other government contractors who are in a worse situation.

“Those companies that have a large percentage of their business in the civilian [agencies] are significantly affected,” she said. “For companies that support civilian agencies, the pay offices are closed.”

Gimmel also noted that unlike government employees, furloughed contractors will not be paid retroactively.

Ashe said the county has become all too familiar with the realities that a government shutdown brings, with three occurring this year alone and a 16-day shutdown in 2013.

She worries that the frequency of work stoppages could be creating a climate of uncertainty for employees who are dependent on the government for business.

“You don’t want people thinking, ‘what am I doing here? I want to go somewhere where there isn’t another shutdown,’” she said.

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

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