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Ohioans worry about shutdown’s impact

The 13-day government shutdown and debt ceiling crisis are affecting Miami Valley residents in wide-ranging ways, from the prospect of depressed 401Ks to thwarted vacation plans to small business owners struggling to meet payroll.

“They don’t have any clue how far their intransigence trickles through the economy,” said Samantha Enslen of Tipp City, owner of Dragonfly Editorial, which does writing and editing for agencies, including the Department of Defense. “Business is the backbone of country, and I don’t think anybody sees that in government, Republican or Democrat.”

First-time home-buyers are enduring painfully slow processing times on Federal Housing Administration loans. Travelers find National Parks sites closed. Farmers can’t access crop reports and government web sites that Americans depend on — from the Census Bureau to the U.S. Department of Agriculture — have a familiar message since Sept. 30: Due to the lapse in government funding, this site is unavailable until further notice.

“This isn’t just a Wall Street problem; it’s a Main Street problem,” said Brian Graff, CEO of the American Society of Pension Professionals and Actuaries.

New research published by the ASPPA shows that failure to raise the debt ceiling by Thursday could cause American workers’ account balances to drop by more than 20 percent. “This is not academic,” Graff said. “This is average working Americans who are counting on their retirement savings, and now they may have less, and they may not have a chance to recover these losses.”

In other words, Americans cannot shut down their lives the way the federal government can, so the government shutdown is both costly and disruptive for average Ohioans, and they do not have to work for the military to feel its impact.

Farmers feel impact

Ohio’s farmers are worried, because the shutdown has prevented the Department of Agriculture from releasing its regular Crop Progress Reports. The lack of daily USDA data is already slowing down trade in the livestock markets, making it harder to reach cash settlements for hogs and feeder cattle, according to the Ohio’s Country Journal.

Bob Young, chief economist for the American Farm Bureau Federation, told the publication there’s “no question that the delays in these reports will disrupt the market from the information flow that it traditionally has. Because of that, the markets will move through this week, and the traders are going to go back and look at independent, outside or private forecasts and reports and that data will be what drives the markets for a few days.”

Local farmers have responded resourcefully to the dilemma by relying on private, independent forecasters, according to Bill Miller Jr., an organic farmer in Morning Sun, near Oxford, and president of the Miami Valley chapter of the Ohio Farmers Union, covering Butler, Hamilton, Montgomery and Preble counties. He said U.S. farmers are far more concerned about the expiration of the current farm bill.

“The focus is on the shutdown, and nobody is dealing with the farm bill,” Miller said, “but it’s an urgent problem, especially when farmers start looking for loans on their crops.”

On Friday, the House voted to hold formal negotiations with the Senate on a wide-ranging farm bill that sets policy for farm subsidies and food stamps. Farm-state lawmakers have pushed the five-year, roughly $500 billion legislation for two years as it has been mired in debates over spending. They are hoping to finish the bill by January, when some dairy supports expire and milk prices could rise.

The Senate passed its farm bill in June, and the House passed two bills that will be combined in the negotiations. One House bill sets policy for farm programs and the other would cut around $4 billion a year from food stamps. Food stamps are expected to be a contentious issue in the negotiations. The Senate bill would cut just $400 million a year.

National Farmers Union President Roger Johnson from Turtle Lake, N.D., said “Congress has put all Americans in a dire situation. The uncertainty created by the failure to come to an agreement on how to fund the government has overshadowed a situation that impacts the livelihood of so many family farmers, ranchers, fishermen and hungry people in this country.”

New hires delayed

Jennifer Fry of Springboro works for a recruitment process outsourcing company whose background check vendor has advised them that Social Security verifications are on hold until the shutdown ends. She said her clients have one of two choices — not to hire anyone until the shutdown is over, or allow people to start work, contingent on the verification going through once the shutdown is over.

“The other thing that is affected is e-verify, the Department of Homeland Security’s electronic I-9 verification system,” Fry added. “They are telling us to continue to enter information into the system, and they will process them when they come back. The I-9 is the form and documentation that indicate your right to work in the United States, either as a citizen or a documented foreign national. My concern with both is does this open us to non-documented workers being employed until the shutdown? Does this open us to potential terrorist activity if people who aren’t documented to work in the U.S. can get jobs, no matter how short the period of time is? My guess is that for every week of the shutdown, it will take two weeks to process and catch up the backlog.”

Laurel and Steve Booher of Tipp City had long planned a 40th anniversary trip to some of the nation’s most iconic landmarks. They left Yellowstone National Park in Wyoming earlier than planned, when it was shut down Oct. 1 and headed to Mt. Rushmore in South Dakota.

“We figured even if it were shut down, they couldn’t put a blanket on it,” Laurel said. “What we saw there was just plain meanness. The county sheriff and deputies put cones in every possible pull off. We watched the county sheriff telling people to move who stopped along the highway outside Mt. Rushmore. Of course the gates were locked to see our national treasure.”

The couple saw Niagara Falls from the Canadian side. “As we traveled we just skipped going to any federal parks and monuments and went to state or local parks instead,” Laurel said. “Hey, we are going to have more anniversaries, so we’ll just have to come back when this government shutdown is over.”

Making payroll

For now, local Women, Infant and Children nutrition programs are not affected, according to Bill Wharton, spokesman for the Public Health Dayton & Montgomery County. “A lot of our funding sources are local,” he said. “It’s a very good thing we passed the human services levy. Right now we’re OK, at least through later October.”

Most experts agree that the government shutdown will have a temporary effect on the nation’s economy, but defaulting on the nation’s debt would be devastating. Chris Philips, a senior investment analyst with Vanguard, the world’s largest mutual fund company, said the shutdown should not impact investments. “Assuming things get resolved, there will be no lasting damage,” he said. “It will probably be like 2011, the last time we bumped up against the debt ceiling. The markets rebounded.”

Richard Stock, director of the University of Dayton’s Business Research Group, said a government debt default could have a lasting impact. It would “drive up rates on U.S. government debts and drive up interest rates overall for mortgage loans and student loans,” he said. “There would be pressure across the whole universe of debt. It’s hard to imagine anyone being so short-sighted as to precipitate a crisis.”

But he predicted as long as the debt ceiling is raised, “the effect on the marketplace will be very short-term.”

For her part, Enslen hopes the issues between Congress and President Barack Obama are resolved before she has trouble making payroll. A third of her business involves federal government contracts, and she’s worried about being able to pay her three full-time staffers and 25 freelancers, many of them now idled.

“Even though we are a tiny, woman-owned business in the middle of Ohio, we too are being affected,” she said. “This has a very human effect, on a more micro-level than they have any clue.”

Graff said politicians need to understand what’s at stake for all Americans saving for retirement. “The bottom line is we cannot play games with people’s retirement accounts,” he said. “We’re talking about tens of millions of Americans and trillions of dollars in retirement savings. This isn’t their debt and they shouldn’t pay the price of political gamesmanship.”

Philips, like most experts, doesn’t believe the government will default on its debts. “The view of most people in the investment industry is that they aren’t stupid enough to push us past the brink,” he said. “The real question is how close you get to the brink, and what are the side effects along the way.”

The current negotiations in Washington, however strained, are a good sign, Philips said: “What you do want to see is progress. Politics today seem extremely volatile and harsh. But remember we have been through wars and a Great Depression, and an era of fistfights on the floors of Congress. The great thing about America, is that when push comes to shove, the betting money would always be on getting something done.”

The Associated Press contributed to this report.

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