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Chamber delegates confront shutdown

When the San Diego Regional Chamber of Commerce picked the first week of October for its annual mission to Washington, D.C., it had no idea that a federal shutdown would occur in the middle of its visit, making it harder to talk to some of the government staffers the delegation was hoping to see.

Despite the shutdown, participants say they were able to fulfill some key goals, such as building support to ease border-crossing times and bolster local military bases.

But for many, one of the primary messages was to drive home to Congressional and administration officials how painful a prolonged federal shutdown could be in San Diego, where more than a fifth of the local economy is tied directly or indirectly to the government.

"One of the things that really stood out to me is how quiet the city got and how much less traffic there was between Monday and Tuesday [when the shutdown began]," said Peter Callstrom, head of the San Diego Workforce Partnership, who was one of the 130 or so participants in the delegation.

Callstrom said seeing that impact "really drove home the idea that not only were these people not at work, they were also not eating at restaurants or shopping at stores, which made me think of the impact on local businesses in San Diego, which has 46,000 federal civilian employees."

A report by Goldman Sachs (NYSE: GS) on Wednesday estimated that the shutdown will cut the gross domestic product by 0.2 percent if it lasts one week, 0.4 percent in two weeks and 0.7 percent in three weeks -- the length of former Rep. Newt Gingrich's record shutdown in 1995-96.

Although that is not a huge hit for the national economy, economists say the effect could be three times as high in San Diego because of its high proportion of federal workers.

That challenge became the backdrop for the San Diego delegation, led by former Mayor Jerry Sanders, the Chamber of Commerce's chief executive.

Interim Mayor Todd Gloria, who was accompanied by City Council members Lori Zapf and Mark Kersey, said that even though much of Washington was shut down, the delegation racked up a number of accomplishments, including:

* meeting with Smithsonian officials to discuss their possible participation in the 2015 centennial at Balboa Park;

* meeting with Senators Barbara Boxer and Diane Feinstein about such topics as the Point Loma Wastewater Treatment Plant permit;

* building legislative and Transportation Department support for expanding the San Ysidro Port of Entry and extending the Mid-Coast trolley lines; and,

* Asking Navy Secretary Ray Maybus to consider San Diego as a magnet site during future military realignments or relocations.

On the other hand, the shutdown made it harder for government contractors to meet with the staffers who deal with their projects, said Chris Humphreys, partner at the McKenna Long & Aldridge law firm. And Workforce Partnership leader Callstrom said he came away with no clear answers for how the shutdown might affect some of his agency's services, including training programs for jobless adults and dislocated workers.

"It seems like it's going to be a day-by-day thing while we wait to see where federal budget is," he said.

He said the agency's programs for young people and health-care training won't be affected, because they get support outside the federal government.

"But the other programs can't operate with no money coming in," he said. "We can't work off IOUs and neither can the vendors we work with. But the people who are going to be most impacted are the 15,000 jobseekers who go through our system."

A statement from the San Diego North Chamber of Commerce expressed concern that the shutdown could soon start hurting some of the small businesses that make up the bulk of its members.

"With the defense industry as large as it is here in San Diego, the fiscal impacts of federal workers not getting paid will translate into fewer dollars being spent in our region, which help pay the wages of non-federal employees at thousands of other businesses," read a statement released by the chamber.

The chamber worried the shut down could also have a disproportionate impact on the small businesses that supply the large corporations that hold most federal contracts. The small size of the suppliers means they have fewer resources to cushion against even minor cutbacks or postponements.

So far, however, there is no indication that the shutdown will end anytime soon, since the Republican leadership in the House continues to balk at passing a budget that does not block or curtail the Affordable Care Act, or ACA, designed to provide health care insurance for those who currently lack it.

Ironically, open enrollment under the act began on Tuesday, just as the government began laying off workers and shutting down national parks, offices and other facilities. Since much of the act is being overseen by state governments, the rollout has not been affected by the shutdown.

In its debut, websites promoting the state-managed, privately run insurance prgorams received more than 3 million hits, as well as thousands of phone calls, briefly crashing some of the Internet sites and leading to long delays.

"There's a tremendous amount of pent-up interest from people who haven't been able to afford insurance before," said San Diego State University accounting professor David DeBoskey, who has been monitoring the ACA.

The San Diego Congressional delegation is split along party lines on the shutdown.

Rep. Juan Vargas, D.-Chula Vista, attacked the House's Republican leadership for refusing to introduce Senate-backed measures that would have avoided the shutdown.

"Instead, (they) have chosen to play partisan politics: furloughing hundreds of thousands of federal employees, halting funding for programs that assist our most vulnerable and placing the overall health of the fragile U.S. economy in jeopardy," he said.

But Rep. Darryl Issa, R.-Vista, pointed his finger at the White House and Senate, noting that he had "repeatedly voted in favor of legislation to keep the government funded." But the legislation he is referring to includes provisions that would delay or overturn the ACA, which the White House and Senate say are unacceptable.

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San Diego Regional Chamber of Commerce

Company Website

402 West Broadway Ste., 1000
San Diego, CA 92101

San Diego Regional Chamber of Commerce Executive(s):

Jerry Sanders

  • Chief Executive Officer, President

Ruben Barrales

  • Chief Executive Officer

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