Shutdown squeezes ordinary Americans

A southern city that relies on federal spending is feeling the pinch of the US government shutdown.

14 January 2019 | Economics

Michael NorthernHuntsville business owner"It's a fog with no end in sight."

JAY REEVES

Once known for its cotton trade and watercress farms, Huntsville, Alabama, is now the ultimate government town.

About 70 federal agencies are located at the army's 38 000-acre Redstone Arsenal.

More than half of the area's economy is tied to Washington spending. As the government shutdown drags into a third week, people and businesses that rely on that federal largesse for their livelihood are showing the strain.

Empty parking lots and darkened offices at NASA's Marshall Space Flight Centre at Redstone have translated into vacant hotel rooms because out-of-town government workers and contractors aren't coming. Restaurants frequented by federal workers who travel on government spending accounts are struggling too.

Transportation Security Administration employees working without pay at the city's airport say they are spending their own money to bring in quiches and breakfast rolls as a morale booster. Moms are sharing tips online about free entertainment and buying food in bulk to save a few bucks. The largest credit union has already provided hundreds of bridge loans for struggling families.

"It's a fog with no end in sight," said Michael Northern, an executive with a small company that runs three restaurants outside the main arsenal gate. The lunch crowd is still okay, he said, but dinner dollars have dried up, and business is off at least 35%. People are just going home and nesting, trying to conserve resources," said Northern, vice-president of the WJP Restaurant Group. "Imagine being in that posture and hearing Donald Trump say, 'It could be a year'."

The closure persists because President Trump and congressional Democrats can't agree on US$5.7 billion in funding for a border wall, which Trump touts as vital to US security and critics see as pointless and immoral. The jobs of some 800 000 workers hang in the balance. A little more than half are still working without pay, and hundreds of thousands missed their paycheques this past on Friday.

Economic statistics lag real-time events, so it's hard to gauge the effects of a shutdown that's been going on for less than a month. But in Huntsville, a city of about 195 000 people where more than 5 000 workers are affected, there is growing frustration and worry. Located at the base of a mountain in the lush Tennessee Valley, Huntsville was just another Alabama city until the government decided to build rockets at Redstone Arsenal at the dawn of the space race. The influx of people and federal dollars that arrived with NASA transformed the city into a technical and engineering hub that only grew as army missile and materiel programmes expanded on the base.

That heavy reliance on federal spending has Huntsville residents wondering what will come next. Jack Lyons, a lifelong space geek who thought he'd hit the jackpot when he got a job as a contractor working on massive rocket test stands for NASA, is spending the furlough on his small side business making props for marching bands. A solid Republican voter until 2016, when he couldn't bring himself to vote for Trump, he's frustrated and saddened by what's going on in Washington.

"They're trying to use people as bargaining chips, and it just isn't right," Lyons said. Unlike civil service workers who expect to eventually get back pay, Lyons doesn't know if he'll ever see a dollar from the shutdown period.

Just back from maternity leave following the birth of her second child, Katie Barron works at home for a private company not connected to the government, but her husband is a National Weather Service meteorologist who is forced to work without pay because his job is classified as essential. They're cancelling this Saturday's date night to save a couple of hundred dollars, and their purchase of a new refrigerator is on hold. They've also put off home and car maintenance, but the US$450-a-week bill for day care still has to be paid, as do the mortgage and utility bills.

"We're a little bit buffered, but our lives are basically based off dual incomes," Barron said. While Barron frets over the loss of dental and optical insurance because of the shutdown, she said her family has some savings and will be fine for a while. Others are struggling.

Redstone Federal Credit Union has already provided hundreds of low-interest loans of as much as US$5 000 each to families affected by the shutdown, with no payments due for 60 days. It's also letting members skip payments on existing loans for a US$35 fee, chief marketing officer Fred Trusty said.

"As the days go on, we are seeing more and more traffic head to our branches," he said. The timing of the shutdown couldn't be worse since many families were already stretched thin by holiday spending or starting payments for upcoming summer travel, Trusty said.

Jeff and Sabine Cool, who own a German-style food truck that operates in the heart of the NASA complex, say their income is down about US$600 a week since the beginning of the shutdown. "It kind of hurt a little bit. We're just rolling with the punches," Jeff said last Wednesday as he set up tables outside Hildegard's German Wurst Wagon on a bright, windy morning. "I'm glad I'm retired from the army and have an additional income, but I feel for the other people."

Jeff’s sympathy extends to people like Sandra Snell, a TSA officer working without pay at Huntsville International Airport. She hasn't gotten a paycheque since December and wonders what will happen once her savings run out. The bright spots of the shutdown, she said, are the co-workers who share food and airline passengers who realise that the people checking their identification cards and staffing the X-ray machines are working for free. "They'll say, 'Thanks for being here.' It helps. It's nice when they realise your value," she said. -Nampa/AP

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