Congress forges another last-minute deal to avert defaultPublished: 10/17/13 @ 12:01
A last-minute deal that took shape Wednesday to reopen the government and avoid a Treasury default did little to allay the long-term concerns of those in the Mahoning Valley’s business community.
As congressional leaders raced toward an agreement on the 16th day of a government shutdown, the theatrics were undoubtedly wearing thin on Valley business leaders as the deal once again called for a temporary solution — setting the stage for further gridlock early next year.
Congressional talks are barely touching the underlying causes of debt-and-spending stalemates that pushed the country close to economic crises in 2011, last December and again this month.
The latest deal extends current spending levels until Jan. 15 and stretches the federal debt ceiling until Feb. 7. The deal also calls for Congress to establish a conference committee of members of both houses to try to devise a spending plan by Dec. 13.
But one Valley legislator voted against the deal.
U.S. Rep. Bill Johnson of Marietta, R-6th, still has issues with the Affordable Care Act, also called Obamacare.
“I cannot support this latest resolution because it does not treat the American people fairly,” he said in a statement. “It fails to offer those in Eastern and Southeastern Ohio any protection from the abuses, expenses and overreach of Obamacare. And what’s worse, this bill gives a special pass out of Obamacare for Washington politicians and big business, sticking hard-working Americans with the bill.”
Johnson said he’s also concerned about the country’s spending.
“I’m also deeply troubled that this legislation increases America’s debt limit, but does nothing to address the main driver of the debt – Washington’s out-of-control spending,” he said. “The American people have had to tighten their belts in this weak economy, and Washington should be forced to do the same. The fact that there are no spending cuts in this legislation means that Washington continues to demand more from the American taxpayers, but refuses to put itself on any kind of budget. And that is not fair.”
U.S. Rep. Tim Ryan of Niles, D-13th, supported the measure.
“While I would prefer that these issues be settled in a more comprehensive way, this is better than keeping the government closed, with 800,000 of federal workers off the job, and our country’s citizens not being able to access their government,” Ryan said in a statement. “This senseless shutdown has cost taxpayers $24 billion and I am pleased that with this deal the bleeding can finally stop. I hope that the damage this crisis caused has taught the Republican Tea Party that radical behavior like shutting down the government and bring our nation to the brink of default is no way to govern — and the American people will not stand for it. There are serious issues that must be addressed in a bipartisan fashion, and hopefully Speaker [John] Boehner and his Republican colleagues will now work with Democrats on legislation to end the sequester, reinvest in our infrastructure and put Americans back to work.”
U.S. Sen. Sherrod Brown, D-Avon, said in a statement that the “bipartisan plan will end the shutdown and prevent the catastrophic consequences associated with the U.S. failing to pay its bills.”
U.S. Sen. Rob Portman, R-Terrace Park, called the deal a win for the American people, saying he was glad to see both parties working together to reach agreement to ensure the country doesn’t default on its debts.
“Lurching from crisis to crisis is no way to rejuvenate America’s economy, and unfortunately, we do not have a long-term fix that will prevent another shutdown in January,” Portman said in a statement. “In order to provide more certainty for our economy and government agencies and the families across the nation who rely on them, I will continue to fight for passage of my End Government Shutdowns Act, bipartisan legislation to ensure that Americans do not have the threat of a government shutdown hanging over their heads.
“Now that Congress has temporarily avoided this economic crisis, I am hopeful that President Obama will stick to his promise and come to the table. We’ve done our part, and now he must do his to negotiate on a path forward to deal with Washington’s underlying problem of overpromising and overspending that brought our nation to this boiling point in the first place,” he said. “My colleagues and I are here, ready and willing to negotiate on how to rein in Washington’s out-of-control spending on autopilot so that we not only prevent a future debt limit crisis in February, but also avoid putting a debt crisis on the backs of our children and grandchildren.”
The prospect of yet another short-term fix had business leaders and others here grimacing with frustration on Wednesday. Even though the shutdown and political stalemate has done little to unsettle the local economy, there was widespread agreement that business would be much better without the constant political wrangling of an intractable Congress.
“From our perspective, what we’re seeing from businesses that want to spend and raise capital is the uncertainty of the long-term economy,” said Michael Conway, executive director of the Mahoning Valley Economic Development Corp. “They are delaying certain projects until they get some certainty that there’s going to be more than just a short-term fix.”
Regardless of any deal, Conway added that such uncertainty will likely remain for at least more days.
MVEDC is a partnership of public and private interests focused on the revitalization of the Mahoning Valley. Conway said the shutdown has halted about six projects because funding through its U.S. Small Business Administration loan program was put on hold when the government closed its doors.
He said all types of businesses across a variety of industries have expressed a reluctance and uncertainty over the politicking in Washington.
“I can’t say any one industry has been impacted more adversely than another,” he said. “Equipment isn’t getting purchased, building and construction projects are on hold, which means jobs weren’t created. It’s a trickle-down effect for sure.”
Investors have stayed largely calm throughout the twists in the current fiscal drama in Washington. Even before Wednesday’s news, the S&P 500 and the Dow Jones Industrial Average were up for the month.
On Wednesday, financial markets flirted with major gains on word that lawmakers were nearing a deal. The Standard & Poor’s 500 index, for example, pushed close to a record high.
“Believe it or not, it hasn’t really come up in conversation or affected anything that I can see in terms of job demand,” said Vic Ing, president of the Alliance Solutions Group of the Mahoning Valley, which works with a wide array of employers to provide staffing services. “It’s absolutely frustrating and it’s embarrassing, though. I console myself by saying it’s just politics being played out in a very public arena.”
“We’re probably going to have to go through this a few more times,” said Bob Bixby of the bipartisan Concord Coalition, which advocates budget reforms. Even if a compromise plan this month wins House, Senate and White House approval, Bixby said, it will leave fundamental problems that “they haven’t done anything to address.”
Jeff Byce, an auctioneer, appraiser and real estate broker at Byce Auction & Realty in Youngstown, said prolonged stalemates can create unforeseen problems for business owners.
“I feel that another week or two of something like this would send ripples that even as a business owner I wouldn’t have planned on or imagined,” he said. “People trying to get SBA or FHA loans are already feeling the pinch and as an owner I think I’d realize very quickly how a long-term shutdown could affect aspects of our business that we couldn’t imagine.”
The feeling among stock traders in recent days was that panicking and pulling money out of stocks could leave them missing out on a rally after Washington finally came to an agreement. Investors are also becoming inured to Washington’s habit of reaching budget and debt deals at the last minute.
“Investors have become, unfortunately, accustomed to some of the dysfunction,” said Eric Wiegand, a senior portfolio manager at U.S. Bank. “It’s become more the norm than the exception.”
The Associated Press contributed to this story