Loudoun-based business leaders huddled around a table at Old Ox Brewery in Ashburn this morning to share with U.S. Sen. Tim Kaine (D-VA) how the government shutdown is impacting their business’ bottom line.
Kaine first told the dozen gathered at the meeting that he wanted to hear their stories so he could share them on the Senate floor ahead of tomorrow’s vote on two bills. One is on President Donald J. Trump’s proposal to spend $5.7 billion to tighten border security as well as other immigration provisions, and another would reopen the government through Feb. 8.
“I hope my colleagues will vote to reopen the government for this 15-day period,” Kaine said. “I’m confident, if we can do that, we can find an agreement in 15 days that moves some form of the president’s proposal forward.”
Those who shared stories about how the shutdown was negatively impacting their businesses in the short-term and, likely, for months or years after the government reopens included owners of restaurants, breweries, wineries, federal government contractors, and mom-and-pop shops like ReLove It in Purcellville.
Tony Stafford, owner of Ford’s Fish Shack, said sales in his three restaurant locations are down 18 percent over this time last year. And customers’ average bill is down by $2-$3. “People are cautious, they’re concerned—and we are too. We’re scared because we don’t know how this is going to turn out. Where is this going to end?”
Meanwhile, several furloughed government employees have come in looking for part-time work, he said.
Chris Burns, president and co-owner of Old Ox Brewery, rattled off several ways the shutdown has hurt his bottom line. Many of his regular customers haven’t been in all month, and the average check is also down. “Our business is down significantly—to the tune of 25 percent this month. We’ve never had a down January.”
Plus, he can’t get federal approval for his labels, which means the new releases he had planned for January through March will have to wait. “I can’t brew them not knowing how long it will be before I can sell them,” Burns said. “There are 7,000 craft breweries in the nation so there is going to be an enormous backlog.”
The shutdown has also pushed back the opening of Old Ox’s second location in Middleburg by about 120 days, Burns said. “And I’m paying on that asset now. That’s not a comfortable place for me to be in as a small business owner.”
Bonnie Archer, owner of Zephaniah Winery, is in a similar situation. Because her team couldn’t get bottle labels approved, they missed their scheduled bottling date for their latest wine release. But they still had to pay the bottling company $4,000 to hold their spot in the queue. “That is a challenge for us,” Archer said.
Joe Linza, founder and CEO of science and technology company Lynker Technologies, said he’s been forced to decide whether to furlough his employees or keep them working knowing he will likely never get reimbursed. Some of the company’s contracts with the government include hiring industrial divers who dive under massive bridges to ensure they are safe for boats to navigate. “Their capabilities are critical to our nation … so we’ve continued to pay those people, but you can imagine that our cash flow is getting tight.”
Angela Mitchell, with government consulting company Arm Consulting, said the shutdown has hurt her ability to grow her business because banks are nervous about lending money to government contractors. “We have high skilled employees working for us, scared whether they can pay for health care, and afford room and board.”
Eric Byrd, manager of Loudoun’s Small Business Development Program, and Tony Howard, president and CEO of the Loudoun County Chamber, told Kaine some of the worst effects of the shutdown will not be felt for another few months. Businesses leaders are not investing in growing their businesses because of the economic uncertainty and the freeze of loans from the U.S. Small Business Administration.
“My concern, as a business coach, is many of these businesses are using their cash reserves now and it’s going to take time to build those reserves back up. They’re at risk should something else happen,” Byrd said. “So this is all going to have a delayed effect on things.”
“How is it possible to make a long-term plan when you don’t know where your revenue is coming from,” Howard said, adding that it makes the county’s economy unstable. “This isn’t good for the brand identify of the region.”
Michael Oaks told the senator this is the slowest his shop, ReLove It in Purcellville, has been since it opened 10 years ago. “I had to cut my employees hours about 20 percent. … The public’s got to realize it trickles down and effects everybody. … I hope you can end this soon.”
Jeff Powell, CEO of Strongbridge LLC, said he’s had a tough time recruiting IT talent. “The mindset used to be come work for the government or a contractor because it’s less risky—less pay, but less risky. Well that’s changing.”
Landing talented employees may get even tougher with Amazon’s H2Q moving into the area, Kaine added. “The talent pool issue is huge.”
Kaine said he believes there are enough Democrats and Republicans open to working through Trump’s proposal to agree on a compromise. He agreed that the president raises four key issues that need to be discussed: more border security funding, changes to the Deferred Action for Childhood Arrival program, changes to the status of immigrants who came to the U.S. under Temporary Protected Status, and the asylum program. Kaine thinks the president went too far with the asylum portion of his proposal, but the three other portions include “very negotiable points.”
He and several other lawmakers, including U.S. Sen. Mark Warner (D-VA), are proposing legislation that would prevent future government shutdowns. Kaine’s proposal would prevent the Senate from taking up any legislation besides an appropriations bill when Congress and the White House are in a stalemate. Plus, it would put in place bills that would fund the government month by month while lawmakers work to find an agreement on the long-term appropriations bill.
“I see bipartisan interest on both sides to try to never do this again,” Kaine said.
The senator reiterated his hope that the government would reopen as soon as this week, and the president’s bill will go through the committee process and be opened up to amendments.
“Our goal as Dems should be trying to convince Senate Republicans and the White House that if you vote yes on the bill to reopen the government, we will work on finding a path forward.”