Valley organization lays off staffers as shutdown rolls on

By Jamison Cocklin


The Mahoning-Youngstown Community Action Partnership has been forced to lay off four fulltime employees working to help low-income clients throughout the county in its Winter Crisis Program.

R. Renee Walton, chief executive officer of MYCAP, said the organization has not received money for this year’s Low Income Home Energy Assistance Program, a federally funded program that helps those eligible to meet the high costs of home heating.

Those funds are distributed by the Ohio Development Services Agency.

Walton said it remained very unclear “where the money is at in the pipe.”

In any event, with the government shutdown, any funds will not likely be released until a settlement is reached among lawmakers.

In the Mahoning Valley, other organizations that rely on the federal government for a portion of their funding were still on standby this week as the government raced toward a deal to avert the economic impacts of a debt ceiling default as well as the ongoing consequences of the government shutdown.

Even before the shutdown, Congress had not reached a definitive funding agreement for the LIHEAP program.

States across the country are struggling with uncertainty over the funds, which assist millions of people with heating bills across the country.

MYCAP is the federally designated, countywide poverty-prevention agency. Its programs include Head Start, Center for Family Economic Success, home weatherization and emergency energy assistance.

Walton said those laid-off staffers will be called back to work whenever MYCAP receives its federal funding or somehow finds unrestricted funds within its own budget to finance the positions.

The bulk of U.S. governmental operations were shuttered Oct. 1 after lawmakers in the House and Senate failed to agree on a spending bill to fund government at the start of the new fiscal year.

“We do have funding for the time being, but nothing has changed, not a thing unfortunately,” said Bill Oliver, a business consultant at Youngstown’s Small Business Development Center.

The SBDC’s operations have been curtailed because loans backed by the U.S. Small Business Administration have stopped amid the shutdown. It can’t help small business owners secure such financing.

At the Mahoning-Columbiana Training Center, Director Bert Cene said he is “still waiting” to draw his funds for the fiscal year, which runs from October through June. The MCTA helps job seekers with an array of services, and many new clients are receiving partial assistance as a result of the shutdown.

Stocks were flat or down all day Tuesday, but the size of the losses waxed and waned depending on which politician was giving a press conference.

The market closed with its first loss in a week, with the Dow Jones industrials down 133 points.

“It’s certainly not helping anything. In some ways financial markets are sort of shrugging this off, but business confidence is shaky overall with or without this fiasco,” said Mekael Teshome, an economist at PNC Bank in Pittsburgh.

“For us [Thursday] is more of a political deadline than a technical deadline, there’s wiggle room in that. The indication is we will get a deal, but then the question will be how do you restore business confidence.”

Tom Picino, fund manager at Diamante Capital Partners in Poland, agreed with Teshome. He believes a deal on both the debt ceiling and federal spending is imminent.

Even if Congress cuts that deal after the deadline, he has confidence the government will be able to pay its bills for a few days at least.

If the stalemate drags on any longer than that, Picino said major indices such as the Dow Jones Industrial Averages could suffer significant losses, which he believes would help prod lawmakers closer to a deal.

“Any affect on the markets will be very temporary with the Fed pumping $85 billion of new cash into the market each month,” Picino said.

“The moment there’s a deal, even if it kicks the can down the road, the markets will recover very quickly. We’ve done nothing in reaction to this because it’s mostly news driven.”

At FEIC Financial in Youngs-town, President Daniel Rossi shared those sentiments. The firm still sent a research note to clients explaining what might happen in the event of a default.

“While it is highly unlikely that the government would default on its bond obligations, a breach of the debt ceiling could have a swift economic impact as government spending is curtailed,” the note said.

A 4 percent decline in the gross domestic product “would be realized,” according to the note, while a slip back into recession would be highly possible, it said.

In the long term, a breach of the debt ceiling would result in a higher interest rate on Treasury bonds, increasing the cost of borrowing for the government.

The Associated Press contributed to this story.

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