Chris Leh, the owner of a fledgling manufacturing company in Ephrata, Pa., recently landed the kind of deal that growing companies dream about, with a major client whose order volume will triple his annual sales to around $1.5 million.
Because the business requires an expansion of his production capabilities, Leh, 46, began hunting for additional employees and lining up financing to buy new equipment for his precision machine components company, TL Technologies. Last week, he was poised to close on a $1.5 million loan backed by the Small Business Administration. Then the government shut down. His lender said it is prepared to cut a check but cannot until the SBA and other agencies reopen and process some paperwork. “We just missed the window, and now we’ve come to a complete standstill,” Leh said.
The Small Business Administration says it backs an average of $96 million in small-business lending each day. Having that financing stream frozen sets off a chain reaction of economic pain, said Anthony Wilkinson, who heads the National Association of Government Guaranteed Lenders, a trade group. He said, “As this drags on into Week 2, people are getting pretty worried.”
The toll may not be conspicuous yet in the broader economy, but at the local level the ripples are spreading. At many banks, direct small-business lending is stalled too, because much of the IRS is closed, preventing lenders from checking tax information provided by applicants. Business owners are also grappling with the absence of other services, like E-Verify, the online system companies use to confirm the eligibility of prospective U.S. employees.
experts question food safety
The shutdown is endangering what the United States eats, food safety experts said this week, as all inspections of domestic food except meat and poultry have halted and the Centers for Disease Control and Prevention recalled furloughed workers to handle a salmonella outbreak that sickened hundreds of people in 18 states.
Offices are dark across the federal agencies charged with making sure that the fruit, vegetables, dairy products and a vast array of other domestically produced food are safe to consume. Inspectors, administrative staff, lab technicians, communications specialists and other support staff members have been sent home.
“This is a self-inflicted wound that is putting people’s health at risk,” said Rep. Rosa DeLauro, D-Conn., a food safety advocate. Because the shutdown comes on top of earlier budget cuts to the agencies, she said, “you’re creating the potential for a real public health crisis.”
At the same time, several crucial agriculture reports used by traders and farmers have been canceled because of the shutdown, disrupting commodities markets and hampering decisionmaking about planting. The highest-profile report canceled because of the shutdown is World Agriculture Supply and Demand Estimates, which supplies statistics on the worldwide production of crops from cotton to corn. It also provides data on other agricultural products, including meat and sugar. “It leaves the commodities market in a bit of a fog,” said Christopher Narayan, an analyst with the bank Société Générale in New York, who said investors would face difficulties in obtaining accurate information.
new york times
charity to pay for death benefits for fallen troops
The Obama administration, scrambling to tamp down a controversy over suspended death benefits for fallen troops, announced Wednesday that a charity would pick up the costs of the payments during the government shutdown.
“The Fisher House Foundation will provide the families of the fallen with the benefits they so richly deserve,” Defense Secretary Chuck Hagel said, adding that the Pentagon would reimburse the foundation after the shutdown ended. Hagel said Fisher House, which works with veterans and their families, had approached the Pentagon about making the payments.
The Defense Department typically pays families about $100,000 within three days of a service member’s death, but officials say the shutdown was preventing those benefits from being paid. A senior defense official said the government could not actively solicit funds from private organizations but could accept an offer.
The failure to make the payments has stirred outrage on Capitol Hill and at the White House. Obama spokesman Jay Carney said Wednesday that the president was “disturbed” when he found out the death benefits had been suspended and demanded an immediate solution. “The commander in chief, when he found out that this was not addressed, he directed that a solution be found, and we expect one today,” Carney said.
The Republican-led House unanimously passed legislation on Wednesday to restore the death benefits. But it’s unclear whether the Democratic-led Senate will take up the measure.