Have you ever popped open a bag of potato chips only to be disappointed by the number of crisps in your bag? It's not just you. To avoid raising prices, companies often increase their "nonfunctional slack fill" or the difference between the volume of product and its container. We talk about how food packaging affects your recipe and wallet.
Federal workers increasingly find themselves in the middle of partisan feuds. Recent political disputes over spending and the debt ceiling resulted in the so-called “sequester” — and a cascade of furloughs and pay cuts for the federal work force. And congressional gridlock forces the threat of a government shutdown. We explore where the federal work force and the Washington region’s economy fit into the gamesmanship of today’s politics.
- Jim Dinegar President and CEO, Greater Washington Board of Trade
- Max Stier President and CEO, Partnership for Public Service
MR. KOJO NNAMDIFrom WAMU 88.5 at American University in Washington welcome to "The Kojo Nnamdi Show," connecting your neighborhood with the world. The federal government began to shut down for the first time in nearly two decades today.
MR. KOJO NNAMDILawmakers on Capitol Hill failed to reach an agreement last night on a measure to keep the government open. And much of the national conversation today will no doubt focus on the political standoff over an effort by House Republicans to tie legislation funding the government to measures designed to undermine President Obama's signature health care law, the Affordable Care Act.
MR. KOJO NNAMDIBut lost in much of that conversation will be the roughly 800,000 federal workers now facing furloughs and a million more who will be asked to work without pay, workers who play an integral role in this region's economy and workers whose livelihoods have been thrust into the center of partisan feuds over and over again during the past few years.
MR. KOJO NNAMDIJoining us to explore where the federal workforce and our region's economy fit into the gamesmanship dominating so much of our politics is Jim Dinegar. He is the president and CEO of the Greater Washington Board of Trade. Jim Dinegar joins us in studio, welcome.
MR. JIM DINEGARThank you very much, Kojo.
NNAMDIGood to see you. Also joining us in studio is Max Stier, president and CEO of the Partnership for Public Service. Good to see you too, Max Stier.
MR. MAX STIERGreat to be here. Thank you.
NNAMDIYou can join the conversation by calling 800-433-8850. Are you a federal employee? How is your life going to be affected by this shutdown of the federal government? 800-433-8850, Max, federal workers have faced down multiple shutdown threats during the past several years. They've endured the so-called sequester spending cuts.
NNAMDIYou say they've been used time and time again as pawns during partisan disputes. This time we've entered new territory with the government shutting down today for the first time since the 1990s. What do you make of this world that federal workers woke up to this morning?
STIERWell, it's an ugly one and unfortunately it has consequences not only for the federal employees, but for our whole country. It is no way to run a government. It's a great way of destroying the morale and the capacity of the workforce that's central to the government and we're doing about just about everything that's conceivable to hurt ourselves and that's.
STIERThere are people that are at stake here, as you mentioned, there's a country that's at stake and I was at a conference last week with Paul Volcker and folks from China, Singapore, France, Britain, Canada all focused on government effectiveness and they were appalled before the shutdown about what they were learning about how we were treating our government. It only looks a lot worse.
NNAMDIBefore we get any further, we should be clear. What's the impact of this shutdown on the federal workforce? Which workers and which services are affected?
STIERWell, everyone is affected as you just said. There are approximately two million civilian workers. And 85 percent of them actually work outside of the D.C. area so it's, you know, probably again the biggest industry in the D.C. area but we do need to remember that there are you know, approximately 1,700,000 of them that are working across the country, in fact, across the globe.
STIERAnd for each and every one of them, whether they were deemed to be excepted or not excepted or essential or not essential, depending on the terminology used, they've all been affected. They've all been affected by the uncertainty involved in not knowing whether the government was going to shut down. They've been affected by the fact that they've had to spend hours, thousands of hours focusing on how they'll actually shut down the government and who is, in fact, essential and not essential.
STIERAnd right now, half of them are, you know, sitting at home after spending four hours at work shutting down and not getting paid and the other half are trying to do the people's business short-handed and without the resources that they need to be successful.
NNAMDIJim Dinegar, by at least one estimate, the Washington region stands to lose about $200 million per day during this shutdown. How would you measure what the shutdown might ultimately cost the regional economy?
DINEGARWell, I think it's very difficult to tell, partly because we don't know how long this will last and then we don't know if people will be paid retroactively. Let's spend a minute on that.
DINEGARIf they're not paid retroactively, it means that they just took a bit hit out of their wallet. Maybe they're not making the tuition payments. Maybe they're not going to be able to make that house payment or the auto loan. They're certainly not going to go to Macy's and spend that money that they don't have and they may be putting themselves out on some credit card risk.
DINEGARSo there's real concern about it not being retroactively paid this time. It had been paid each of the other times when there's been a government shutdown. The two big areas of uncertainty are really how long will this last? And it doesn't look like it gets wrapped up this afternoon. And how much is the likelihood that they'll get retroactive pay? This will be a very, very costly shutdown if they don't get the retroactive pay.
NNAMDIIf the region was, so to speak, insulated from the worst parts of the 2008 recession because of its proximity to the federal government, will that same proximity to the federal government have an opposite and negative effect now in a shutdown environment?
DINEGARWell, it does. You know, we're far more than a company town. Marriott's here and Hilton's here and Volkswagen is here. They really don't have anything to do with the government. There's been so much more in the past 17 years since the last government shutdown that it's helped the growth of the region.
DINEGARBut let's talk about the fact that a lot of it is already close to the edge. Metro needs all the money it can get, but they're going to get less dollars because there are less riders from the federal government and the contractors that work for the federal government and work with the federal government. Riding Metro, that's one specific case.
DINEGARBut you have a lot of restaurants that are pretty close on the margins and they're going to see a drop in business. Conferences, not only conferences that count on some federal workers to attend, but also typically the keynote speakers, the secretary of commerce, the secretary of interior, the head of the EPA. Sorry, I can't even return your phone calls, much less speak at your conference.
DINEGARAnd I'm at the Smithsonian with a gala or I've got another special event at the Mellon Auditorium. These places are closed. It's actually business that has been doing well in this region, but this is our economic recovery time. It really just stalls it.
NNAMDIWhat's at stake for contractors?
DINEGARWell, government contractors are really up in the air right now and we've told them they should be documenting heavily about this missed work because they're still held to the deadlines. They're still held to the work product but they're not able to get phone calls returned, emails returned. They're not allowed to have access to those federal facilities where they'd had the badges that get them in just like a federal worker during the day.
DINEGARAnd so this period of uncertainty is now compounding the fact with contractors including organizations such as Goodwill that have contracts for landscaping and more, that they have to keep their employees home. Do they pay? Do they not pay them under the government contract and it's putting quite the squeeze on.
NNAMDIWe're talking about the regional effects of the shutdown with Jim Dinegar. He's president and CEO of the Greater Washington Board of Trade. Max Stier is president and CEO of the Partnership for Public Service. You can call us at 800-433-8850. What concerns do you have about how the shutdown of the federal government may affect the region's economy?
NNAMDIYou can also send us email to email@example.com. You can send us a tweet @kojoshow or you can go to our website, kojoshow.org, and join the conversation there. Jim, how would you measure the damage of the so-called sequester cuts may have already inflicted on the region before this shutdown even started?
DINEGARYou know, I think there are a lot of people who think that sequestration was much ado about nothing. And in fact, it's a ten-year deal. We're only in the start of the second year on it. The first year you could sweep some of the available money off the table. It hurt, but it wasn't that bad.
DINEGARFourteen, without the shutdown, October 1st, today, it's the start of a very painful year on sequestration that we would have been feeling and complaining about had it not been for the shutdown. It's going to be a difficult time accommodating those sequestration cuts.
NNAMDIMax Stier, the Post reported today that before the last shutdown in the 1990s, Congress had already passed several appropriations bills. This time around, not so much, that's not the case. How is that going to affect the basic operations of federal agencies?
STIERWell, again, as you described it, it was still a partial shutdown since there are a number of federal employees that continue to work even if they aren't being paid. And it is a more complete shutdown than the last time because as you said, there had been partial appropriation bills that had passed so elements of the government still functioned.
STIERBut I think what makes this worse is not simply that those other appropriations have been passed, but again, as Jim had mentioned, as you had as well, this is coming upon the heels of a whole series of, you know, attacks, frankly, on the government and the sequester is the most dramatic of them.
STIERSo again, on the people's side, you have a bunch of folks that have been furloughed already and so it's not a question of whether they're going to be retroactively paid. Their paychecks were already cut because they were forced not to go to work and they lost money. So you're talking about ill put on upon ill. This is truly extraordinary.
STIERThe metaphor for me -- I just got back from a field trip with my children, is sort of the, you know, the Congress is supposed to be driving the school bus and they're disagreeing about what direction they should be going in and they've chosen to crash the bus because of that disagreement and all of us are getting hurt.
STIERIt's a crazy, crazy situation. The only small friendly amendment I'd make to Jim's litany of problems here is that the Mellon Auditorium will actually be open. We are hosting our Service to America Medals Gala Thursday evening recognizing truly, extraordinary civil servants.
STIERNow is the time for us to, I think, highlight that even more than ever because this is what we're losing. And that will be at the Mellon Auditorium Thursday. The show goes on.
NNAMDIThe Washington Post ran a piece earlier this year about "the myths of government shutdowns." One myth it busted was that shutdowns save money. What would you say to that? What kind of money does the government stand to lose, if any, by shutting down today?
DINEGARIt loses on all fronts. It loses, again, on the primary function of government. All sorts of people who are supposed to be focusing on keeping our water safe, insuring that our borders are safe, all kinds of critical functions for the government, they're not focused on that. They're focused on trying to make sure they deal with the triage about who is essential, who is not essential. How do they shut down their buildings?
DINEGARThat's where people's energies are actually going into and bringing the government back online costs a lot of time and money. So this is certainly a loss and waste of money, in addition to the human toll that it takes.
NNAMDIOn to the telephones, here is Jay in Washington, D.C. Jay, you're on the air. Go ahead, please.
JAYHi, I guess my comment is the problem seems to me that Congress is not personally impacted. I mean, they don't lose their jobs. They don't get fired for ineptitude and incompetence. Stupidity is not a capital offense, unfortunately, so they can fool around for the next six months and destroy the country and they don't really care. They'll get re-elected by their constituents or their Tea Party.
NNAMDIWell, it must be said, because that's what they're saying, both Democrats and Republicans, is that they don't want the government to shut down regardless of the fact that their actions may have caused the government to shut down. They don’t, they say, want to hurt government workers. They don't necessarily want to hurt the economy of the region, but, of course, it has had that effect anyway. Thank you very much for your call.
NNAMDIYou, too, can call us at 800-433-8850. How do you think the shutdown of the federal government will affect the public perception of federal workers and what they do? You have concerns, Jim Dinegar, about how it will affect the perception of the Washington region as a place to do business?
DINEGARWell, I do have to say, from the Board of Trade's perspective, we are cheerleaders for the Greater Washington region and this one hurts because it has been a good time over the last several years in terms of celebrating all the visibility of the Greater Washington region.
DINEGARWe've grown. The Washington Nationals have been good. The RG3 stories have been constant and certainly the new panda at the National Zoo. Whoops, sorry, the federal government is shut down. Now you can't go and see the pandas in the zoo and it's just disheartening because it will be a lag time even if we open tomorrow. It will be a lag time out there in the rest of the country whether Washington is open or not.
DINEGARSo people that are thinking of visiting, bringing conferences and meetings here I think they'll think twice. We don't want them to think twice at all. We want them to have a very good view of the Greater Washington region in their minds and this one makes it more difficult, another hurdle to overcome.
NNAMDIThere are many who would look at the declaration of so many non-essential federal government employees, Max Stier, and say, this is evidence that the government is bloated. There clearly are hundreds of thousands of people working for the government who are not critical to the functioning of government. What would you say to those people?
STIERI would say that all you have to begin to look at is who those folks are and you'd see very clearly that we are going to be losing all kinds of different services as a result of those folks being sent home. The law requires that only those people who are responsible for, in essence, saving life and property are permitted to continue working, and again, without receiving their paycheck. A promise for payment later and that's it.
STIERBut more generally if you look across the board, fundamental functions of government, whether it's providing support for people in public housing in major cities, whether it's medical research, whether it's the support functions for the health and safety workers that may still be on the job, all that stuff is being put to the wayside. And it will, again to your point earlier, have long term costs for people in this country. They may not be immediately obvious but we will feel the pain for many, many years to come.
NNAMDITo what degree do you think political disputes about the size of government or the role of government have already damaged efforts to ensure that those working in government are effective at what they do?
STIERIt's been devastating. And we have the data. We know because there's a survey done every year of federal employees. And we do our best places to work rankings based on that survey that the office of personnel management conducts. Seven-hundred-thousand federal employees respond to it. Last year, we had the biggest drop ever in the survey for employee morale. And I'm confident that this year we're going to see even worse.
STIERWe're seeing a huge spike in retirements. There are all kinds of negative things that are happening to our federal work force. Our government is only as good as the people we have in it. And we're doing everything we can to chase them away.
DINEGARWell, Kojo, five years ago with President Obama coming in on his first term, there was this real spirit of civic pride. There were a lot of people at a historic moment that were very excited to work for the federal government, were signing up in droves. Now I think what we're seeing is that, just as Max said, there's a lot of concern associated with is the federal government the right career path? You've got sequestration cuts limited to no raises. Now you're pending this shutdown that you may or may not get paid on.
DINEGARIt is going to be very difficult long term for the federal government to attract the best and the brightest. And I think we're going to be paying the price for that for generations to come.
NNAMDIJim Dinegar is president and CEO of the Greater Washington Board of Trade. He joins us in studio along with Max Stier, president and CEO of the Partnership for Public Service. If you have called, stay on the line. We will get to your calls. If you'd like to call, the number's 800-433-8850. You can send us a Tweet at kojoshow or email to firstname.lastname@example.org. Were you in Washington the last time the federal government shut down in the 1990s? What kind of price do you think federal employees and businesses in the Washington region ultimately paid for that political standoff? I'm Kojo Nnamdi.
NNAMDIWelcome back to our conversation about the government shutdown with Max Stier, president and CEO of the Partnership for Public Service and Jim Dinegar, president and CEO of the Greater Washington Board of Trade. They both join us in studio. Here on the phone is Joey in Reston, Va. Joey, you are on the air. Go ahead, please.
JOEYHello, Kojo. Long time listener, first time caller.
JOEYI appreciate you taking my call. I'm the managing partner of a CPA firm and we focus on government contractors. And we're literally meeting with a lot of CEOs today to talk about which one of our contract staff are going to get paid, which ones we're going to not pay because of what's going on. Because if they don't go to the government site, they're not going to get paid. And one of the largest clients that we have has about 700 employees, 433 as of today we've decided we're not going to be paying them because they can't work.
NNAMDISo 433, the majority of your employees are not going to be getting paid and you have no idea how long that's going to last.
JOEYYeah, I mean, we're going to let them use vacation, sick pay, all of those things, but at the end of the day, they're not considered essential employees. They can't go into the government site. We can't bill them.
NNAMDIYou use vacation, you use sick pay which means that there's no vacation and that when you get sick, there's no pay. It's a sacrifice all the way around.
JOEYYeah, and then on the flipside, the IRS officers that we work with for clients that have IRS notices, they called us today and they cancelled all their appointments because they're subject to sequestration, which means, you know, U.S. Treasury is not going to be collecting a lot of the money they should be collecting from taxpayers.
NNAMDIJim (sic) , thank you very much for sharing that with us. Jim Dinegar, and that some would say is just the half of it. What concerns do you have about whether there's a second punch coming later this month? We talked with Congressman Chris Van Hollen of Maryland yesterday. He's worried that this political game of chicken is going to spill over into discussions about whether to raise the federal debt ceiling by an October 17 deadline.
DINEGARWell, I'm not sure it's the game of chicken out there. I think that this is a warm-up for the next time. And they're really just sort of sharpening the claws this time around. But, boy, the big fight really will be raising the debt limit and seeing to whether or not there's a line in the sand on that. I think the Tea Party has set down the market that they will not go for any raising of it. And the concern that we have from the business community really is that there's nothing that we can collectively do about it right now, but we have to be prepared.
DINEGARAnd so the Board of Trade has provided a lot of guidance to our members to have a plan going into this shutdown and certainly the potential for another shutdown if this one gets resolved soon, and documenting everything. Kojo, I can't tell you enough that people have to document everything about this. That they try to get their phone calls in, that they try to get into the building, that they continue their work offsite, that the billing and the work delivery still needs to happen.
DINEGARThe uncertainty associated with this means that record keeping is going to be essential and then be back first in line when the government opens. But when you look at the dynamics of whether or not you'll be paid retroactively of you're going out on sick leave, vacation leave. There are people who are actually assuming that they can collect unemployment. And I don't think it'll be a chance to collect unemployment because you're on furlough, you're not unemployed. The dynamics this time around are very disheartening.
STIERWell, I think I want to point out one element that the caller said about people not actually being able to give the IRS the money that's owed to the federal government. One, I think, devastating statistic that demonstrates how bad this has been for some time is the IRS personnel is down 13 percent. And from 2012 to 2011 there was a 14 percent decline in money brought in from enforcement actions. That means $5 billion was not brought into the U.S. Treasury.
STIERSo literally we may be saving pennies in sequestration and we're costing dollars. It is a terrible, terrible way to manage our government that is hurting people and costing us tax dollars that we need for our country.
NNAMDIOnto Debbie in Rockville, Md. Debbie, you're on the air. Go ahead, please.
DEBBIEHi there, Kojo. Thanks for taking my call. I'm actually a mortgage lender and one of the things that -- if this goes on for more than three or four weeks, that we're going to see is that we won't be able to close on mortgage loans, stopping what certainly in our area has been a robust housing market for the last couple of months. People won't be able to get mortgages. Not that HUD is closing down and not that the VA is closing down but we have to get information from the IRS. And we are being told that we won't be given that information.
NNAMDIWhat effect can that have on our region's economy, Jim Dinegar?
DINEGARWell, you know, the housing market has been picking up quite a bit. And anything that pulls back from that and really impedes it is going to be something that it would have an outsized affect on the economy here because the housing prices are higher than most. There's been a pretty active market of late. And while we lead the country, this is the time to keep things going so that it catches fire around the rest of the country, not putting it out.
NNAMDIThank you very much for your call. Jim Dinegar, the Republicans who are trying to scale back the Affordable Care Act say the American people cannot afford the impact of that act. A big part of that law is scheduled to be implemented today with the rollout of insurance exchanges. What are the concerns your members are expressing to you about it?
DINEGARWell, I would say that on the Affordable Care Act there's been a lot of confusion and a bit of sort of fits and starts. But this really is not about the Affordable Care Act. This is whatever tool can be thrown up to stop this now. This time it's a negotiating ploy. And the Republicans and certainly the Tea Party are staunch opponents of. But if they give in this time from the White House, the White House is concerned that the next time they'll just come up with something else that they don't like.
DINEGARIt's just not, as Max says, the way to operate a government. It's not a responsible way whatsoever. There's a lot of confusion about the Affordable Care Act. There's a lot of difficulty associated with the implementation. But it is the law of the land that has been agreed to. There's been an election since and so it's a matter of getting on with business and dealing with it. And for the most part it's just really counterproductive about how this stalemate is going to cripple the economy here.
NNAMDIDebbie, thank you for your call. We move on to David in Bethesda, Md. David, your turn.
DAVIDYes. Well, I just think it's irresponsible of members who talk about fiscal principles not to -- if you want to be consistent, they should not be taking their paychecks at the same time they're asking the rest of the government not to take their paychecks as well. They're not practicing best practices in any kind of sense of the word. You've got authorization committees and appropriations committees but congress is not following the set upon patterns that were supposed to -- how they're supposed to legislate in government.
DAVIDAnd I think if you're going to have people talking about principles, they should stand up. And I'd like to see a list of those members who are turning their paychecks back in, because they told the rest of the nation they can't have theirs.
NNAMDIAnd Max Stier, we got a question from Elizabeth, "Do members of congress get salary and benefits for life? Maybe we should rethink that in light of their deep concern for the economy."
STIERHuh. Salary and benefits -- they don't get salary for life unless they're a member of congress for life. They might get health care for life and have some special privileges in the House gym and other things like that. But, you know, fundamentally there are members of congress that have turned in their paycheck. I don't think it's enough. It doesn't solve the damage that they're doing everywhere else. So there are, you know, people who may have independent means that mean that their paycheck isn't really relevant to their quality of life. That's not true for the 2 million federal workers, nor frankly for the larger country that's being served by the federal workforce.
STIERSo again, the workforce is the hostage here -- the public is the hostage here. And it has nothing to do with the fight that's going on here. And it's got to end.
NNAMDIOn to Jessica who is in Maryland. Jessica, you're on the air. Go ahead, please.
JESSICAHi, Kojo. Thank you for taking my call. My question was about federal food inspectors, specifically meat inspectors. Are they considered essential? Will they still be working? And if not, I mean, I know people can shot at farmer's markets and the like but for people who maybe don't have access to farmers market, should we be changing our eating habits during the shutdown?
STIERSo an interesting choice because in sequestration actually the food -- the meat inspectors were able -- or rather the lobby associated with the meat industry was able to ensure that the inspection stuff continued on without the kind of cuts that a lot of other parcel governments saw. As I mentioned earlier, there is, in the law, an exception for those that are in jobs that are connected to the, you know, fundamental safety of life and property. So by and large, you know, food inspectors are going to be deemed accepted or essential, depending again on the terminology.
STIERBut that doesn't mean that they're going to be able to do their jobs as effectively as they've been able to do otherwise. There's all sorts of support services that they're not going to have that they normally do. And they're going to be in an environment which is highly constrained. So I think, you know, the reality we have, the safest food supply in the world, that's probably, you know, still going to be good for some time to come. But we are chipping away at our ability to manage, again, an increasingly complicated world.
STIERSo in the near term I think you can go ahead and eat the food safely. But over the long term we're causing ourselves real problems.
NNAMDIHere is Ryan in Bethesda, Md. Ryan, you're on the air. Go ahead, please.
RYANHi, Kojo. I was just going to make a comparison to basically the weatherman. It's the only person in the area that I think can basically show up for work, count on betting paid and whether they are wrong consistently can still keep their job.
NNAMDIWell, you have to admit that there's a lot of uncertainty in what weather forecasters do. And so that is taken into account when they get to keep their jobs. We're not really talking about uncertainty when the members of congress cannot pass a budget to keep the federal government going. But you are right, they do get to keep their jobs in that situation.
NNAMDIJim Dinegar, you mentioned earlier about how when we -- when the Redskins win, when a panda is born there's good news about Washington. But in your attempts to recruit companies or to encourage companies to locate here in the Washington area, how does the embarrassment of a shutdown play into it? How does it cause businesses to think twice?
DINEGARWell, you know, it's just a negativity. So when you start to hear about the fires out in California, you think twice. When you start to hear about the problems down in Arizona or Florida, you think twice. Now the news -- the leading story on the national news night after night for the past several days and certainly into the future is about this government shutdown.
DINEGARAnd I will tell you, people don't know where Fairfax is on a map if you circled it if you're from outside this region. They think it's Washington. And so it has a ripple effect across the greater Washington region that's going to cause us problems. But then I would also say that it then annoys people and it just gets them angry. There're stories about the -- I guess it's the Air Force Navy game coming up this weekend that may not be played because the seniors are considered part of the military and therefore they're not allowed to be playing.
DINEGARThere's this confusion associated with it and you start spinning out some pretty bad stories. It's really, Kojo, why we had to encourage our members and provide them specific guidance for getting their hands around this on the front side so that they would have a plan, updating it and really getting those lines of communications cleared out so that there wasn't confusion. And then after this all clears -- and I don't know when that is -- to make sure they've got steps in place to go recoup as much as they can as quickly as possible.
NNAMDIWell, you can maybe explain the phenomenon that Chuck in Lovettsville, Va. has been observing. Chuck, you're on the air. Go ahead, please.
CHUCKYes. It just seems to me that one would think that the stock market would go down in this kind of environment. But if you look at the numbers today, they've been going up. And it's just -- it's counterintuitive and it tells me that the rest of the country is just not concerned about what's going on in Washington. And so ...
NNAMDIWell, you know, we had a reporter from the Financial Times on yesterday. And what he was explaining to us is that if you're looking for any kind of gradual drop in financial markets at this time, that's not what you're likely to see. What you are more likely to see is a sudden dramatic and devastating drop when you are not really expecting it. But Jim Dinegar knows more about this then I do.
DINEGARWell, there's a lot of concern that the stock market is the bellwether. And it really isn't the bellwether. It whipsaws just like almost anything else. In this region, the greater Washington region, and arguably one of the strongest regions in the United States, this has serious economic consequences. And if left untreated, this will spread around the rest of the country because this is where so much comes from, so much of the decision-making, so much of the ability to collect, so much of the ability to run different programs.
DINEGARAnd a lot of money comes from Washington, D.C. out to the rest of the country. So if this goes for a couple of days, we'll be the only ones who feel it. If this goes for longer than a few days, the rest of the country will feel it. And make no mistake, they'll feel it on Wall Street.
NNAMDIThank you very much for your call, Chuck. You too can call us at 800-433-8850. We're talking with Jim Dinegar. He is the president and CEO of the Greater Washington Board of Trade. Max Stier is the president and CEO of the Partnership for Public Service. Were you in Washington the last time the federal government shut down in the 1990s? What do you remember about that in terms of the price the region paid economically for it? What concerns do you have about how this shutdown may affect the region's economy, 800-433-8850? You can also send email to email@example.com or send us a Tweet at kojoshow. I'm Kojo Nnamdi.
NNAMDIWelcome back to our conversation about the effect that the government shutdown can and is likely to have in the Washington region. We're talking with Max Stier, president and CEO of the Partnership for Public Service, and Jim Dinegar, president and CEO of the Greater Washington Board of Trade. President Obama spoke at the top of the hour about the shutdown. Let's take a listen to what he had to say about what we know and what we don't know yet about the effects that this shutdown will have.
PRESIDENT BARACK OBAMANow, we may not know the full impact of this Republican shutdown for some time. It will depend on how long it lasts. But we do know a couple of things. We know that the last time Republicans shut down the government in 1996, it hurt our economy. And unlike 1996, our economy's still recovering from the worst recession in generations. We know that certain services and benefits that America's seniors and veterans and business owners depend on must be put on hold.
PRESIDENT BARACK OBAMACertain offices, along with every National Park and monument, must be closed. And while last night I signed legislation to make sure our 1.4 million active duty military are paid through the shutdown, hundreds of thousands of civilian workers, many still on the job, many forced to stay home, aren't being paid, even if they have families to support and local businesses that rely on them. And we know that the longer this shutdown continues, the worse the effects will be. More families will be hurt. More businesses will be harmed.
NNAMDIPresident Obama speaking a little while ago on the government shutdown today. We've been talking about the economic effects of this in this region for much of the last hour. But I remember in 1995 and 1996, gentlemen, this had to do with a demand from President Clinton to produce a balanced budget in a period of seven years. And ultimately it was negotiated, and it worked out even though ultimately there was a three-week shutdown of the federal government. My question to you both is, how do we get out of it this time? Starting with you, Max Stier.
STIERIf I had any answer to that -- I don't think there's any rationality associated with this. And I think one of the critical points to be made here is that it can't be that the government operation is the hostage for every, you know, flashpoint of dispute between the political parties. If we have that, then we don't have an effective government. And that's, I think, one of the critical principles that we have at stake here.
STIERWe are really viewing just a dereliction of duty -- and, again, in the metaphor of, you know, driving the bus off -- or destroying the bus because you have a difference in opinion about where it ought to be driven towards. I don't think there's any logic associated with this. The earlier caller talked about, well, what kind of pressure can we put on folks? I think the public does have to speak up. I think they have to speak up loudly. And one hopes that there's a, you know, ultimately a sense of responsibility that returns to Capitol Hill.
DINEGARWell, I think, Kojo, in answer to your question, it may not be punctual, but it's eventual. They'll figure this out. It's just a matter of what horse trading needs to happen behind the scenes. There's not as much pork to pass around as there used to be. And I think that the Tea Party is really a third party, not really the Republican Party, and therefore they need to be taken into account in a different way.
DINEGARBut by all accounts, the hostage taking that's going on needs to be reversed. And I think Congress needs to be held hostage and really locked in a room until they come up with a solution. They need to feel the heat. They need to feel the pain. They, frankly, need to do their job and come up with a solution because I think that the president's staying on the sidelines, waiting for Congress to work this out and pass the budget. And I just I'm incredibly frustrated. But I do believe eventually they're going to figure it out. It would be nice to accelerate that.
NNAMDIHere is Momzer (sp?) in Montgomery County. Momzer, you're on the air. Go ahead, please.
MOMZERWell, thank you very much for taking my call. And, you know, look, I am a lifelong Republican. I am a federal employee. I work for the Internal Revenue Service. I've been an agent there for more than 20 years. And I absolutely believe that this is something that had to be done. And the reason why is because Obamacare will absolutely destroy our economy in the long run. It's going to be a huge unrealistic and unsustainable expense and cost. And everybody that's looked at it has said, this is not going to work. And the problem is that we have a...
NNAMDIWell, I don't know that everybody who has looked at it has said it would not work. And you do know that the House of Representative has tried on more than 40 occasions to overturn it.
MOMZERI want to address one thing that you said, though, which is, how are we going to survive in this area?
MOMZERBecause I live in Montgomery County. I'm a federal employee. This is affecting me personally. It's affecting my community, and it's affecting my neighborhood. So I am right in the crosshairs of this shutdown. And nevertheless, I believe that the cost in the long run will far exceed the immediate cost that I have to endure and my neighbors have to endure.
MOMZERAnd I got to tell you something. People that are saying how this is extra -- you know, this is outside the rules and this is wrong. And it just seems to me that whenever we've had a serious situation, you know, an emergency, we're very quick to kind of throw our Constitution right out. And I think the Tea Party's absolutely correct. Look, Lincoln threw out habeas corpus during the Civil War. In World War II, we had Japanese-Americans who were interned...
NNAMDIWell, allow me to have our panelists respond because, as far as I know, the Supreme Court has upheld the Affordable Act as being constitutional. So the notion that we're throwing the Constitution out by implementing the Affordable Care Act, I don't quite understand.
MOMZERWhat I'm saying is there are -- no. What I'm suggest -- that's not my point. What I'm suggesting is that the fact that the Republicans are holding the budget sort of as a hostage in an effort to try to control Obamacare is outside of the way things are supposed to work. I think everybody agrees that this is something that's (unintelligible) not normal.
NNAMDIOkay. But you feel that it's necessary.
MOMZERWhat I'm saying is it's absolutely essential, and we have a history of doing things like this.
NNAMDIOkay. Well, allow me to have Jim Dinegar and Max Stier respond. Jim Dinegar?
DINEGARWell, I think that there are a lot of different issues that Congress disagrees on. And there are responsible ways to approach it, but you don't shut down government. We've got a big disagreement on the ability to fund Social Security into the future. Do you shut down the government till you figure it out? It's very irresponsible.
DINEGARThese are grown men and women that should be able to figure this out as adults and not hold the government worker, and, therefore by extension, the Greater Washington region hostage. And the big concern, as I've said several times, and perhaps as an IRS staff person, you'll feel the pinch differently, if you're not paid retroactively and they shut this down for four or five, seven, 12 days, you may be feeling dramatically different.
NNAMDIAnd this one for you, Max Stier: "While we're talking about the image of this area, what do you think has to happen for people to have a different image of what federal workers do?" We got this email from Jerry in Fairfax: "I have worked in government, both DoD and DHS. Most of it is waste. Feds are enormously overpaid. I don't feel bad for Feds at all. Even if they go a month without pay, they are still greatly overpaid."
STIERWell, I think my answer to that would be that you're cutting off your nose to spite your face. There's all kinds of legitimate arguments about what we can do better in government. This is not the way to get there. We've already talked about the fact that what we're doing right now is actually going to cost our country enormous amounts of money.
STIERIt's going to cost the work force. Irrespective of whether they're the best or not as good as this gentleman would prefer, this is not the way to improve government. This is the way to dismantle government. And that doesn't serve anybody in this country. Our government is our tool for collective action. It's the way we address some of our most critical challenges.
STIERWe do need an effective government. And we ain't going to get it by treating it in this fashion. And we're not going to get great talent wanting to come in, and we're not going to be able to encourage the great talent that currently exists. Again, we do a program where we identify the greatest innovators in government. They're amazing, amazing people. We need more of them. We're not going to get more of them by doing business in the way we are right now.
NNAMDIWe got an email from Maria in Bowie who says, "There's been some misinformation today. Please correct it by being sure to let people know that even the government workers who have to work will not be getting paychecks. And it's unknown whether anyone will be paid retroactively. Some have said it's a form of indentured servitude.
NNAMDI"They must work for no pay. The only government workers who must be paid by Constitutional mandate are the elected congressmen and women and senators. However, they can, of course, donate their pay." Is that essentially correct, as far as you know?
STIERMy -- yeah, as far as I understand, there's actually -- you know, for those folks that are sent home and deemed to be, again, not essential or not excepted, that there is no guarantee that they will be paid. And historically, there has been retroactive pay given to them, but that's a totally open question. But for those that are being required to work right now, my understanding is that there is, in fact, a commitment to pay them. It just can't be done in the near term, which can cause all kinds of damage. I could be wrong about that, but that's my understanding.
NNAMDIHere now is Dan in Washington, D.C. Dan, you're on the air. Go ahead, please.
DANThanks for taking my call, Kojo, and great show. I was particularly vexed by my colleague at IRS. I'm in a federal agency myself. And I just think he has it completely wrong. The end of the day, this has been a long drive of the Republicans, and specifically the Tea Party, about defunding or getting rid of Obamacare at any means.
DANAnd one basic problem I have with this whole strategy -- at no time I have heard any discussion on anything put forward by the Republicans as to what would be the alternative. Everybody agrees that the healthcare system we have is either broken or in need of serious repair. And all we hear is what Obamacare was wrong after it was passed by the Congress, the entire Congress.
DANAnd now they've come forward 'cause they don't like what they've done as a Congress and have no alternative. And as far as -- I mean, Obamacare is a debt just like the other debts that Congress signed off on. And if we don't stand behind the debts that we've accumulated, we're going to go to hell -- I mean, excuse me. We're going to go to pot as a nation.
NNAMDIYou know, well, thank you very much for your call. When we talk about the debt ceiling, Jim Dinegar, as a business person, a lot of people don't seem to understand that when it comes to the raising of the debt ceiling, we're really talking about whether or not the United States will be paying its debt. And as a business person, you know what happens to a company that does not make good on its debt.
DINEGARWell, I have no proponent of raising the debt limit. Having said that, this is a conversation that should have been happening a year ago, two years ago, five years ago, and stick with it. But we get here to the 11th hour, and we're coming up on it in just a few short days. And, well, we haven't figured it all out, so let's raise the debt limit. That's a very irresponsible approach to leading.
DINEGARHaving said that, it's an irresponsible approach to leading eclipsed only by the fact that the more irresponsible approach would be to not pay our debts. And if we even get close to ruining the credibility and the good faith and standing of the United States government because of the debt ceiling discussion that we've raised multiple times over the past many years, I think it would just be a travesty.
NNAMDIOn to Cat in Potomac Mills, Va. Cat, you're on the air. Go ahead, please.
CATYes. Hi. I've been listening to this conversation and debate since it happened. And I'd like to speak -- I'm a constituent in Debbie Wasserman Schultz' area. She's my congresswoman. And I came up to visit Washington, and I'm disappointed that it's all closing down. But I'd like to say that this is, to me, an issue which no one has said anything about perhaps because they didn't travel into different areas.
CATBut I've seen it happen in Florida, and I've also seen it happen in North Carolina where it's them against Barack. And I've never heard such disrespect in my lifetime. No one calls him Mr. President. They -- have you ever heard the park's called Roosevelt Park or the Roosevelt Forest? Of course not. It's disrespectful. They refer to presidents as Mr. President, not the Republicans. They decide that this man should be called by his first name, that they're common friends. Yet they speak about Mr. Obama and his plan as if it were a curse word. It really bothers me. But on the bigger...
CAT...scheme of things, the Republicans have gone to great extent -- not only this, but they say when a husband and wife are fighting, it's really not about what they're fighting about. It's something underlying. And what I'm trying to say is, in Florida, the Republicans went to great extremes to try to prevent Barack, Mr. President, from being elected by shortening the early voting down there...
NNAMDISo you feel that this is really a fight about much deeper ideological differences in general and a fight against the president of the United States for whom they have disrespect? Look, we tend to be a very informal country. And if you had heard in the previous presidency how many people referred to President George W. Bush simply as Bush, and in Obama's case, I don't think they refer to him as much as Barack as they refer to him as Obama.
NNAMDIThere have been some people who have objected to Obamacare. I read one article today which said, what if they had called the Social Security some kind of Roosevelt retirement? Would it have been seen any differently? I don't know. A lot of this has to do with the idiosyncrasies of language that I am not qualified to speak on at this point.
NNAMDII think what everybody agrees on is that there should be some serious negotiation so that government workers would not be put out of work. And what we've been focusing this conversation on is the effect that that will likely have on this region. Any prediction at all about how long this can conceivably last, Jim Dinegar?
DINEGARWell, Kojo, we've told our members at the Board of Trade that wishing is not a strategy, that they'd better have a strategy in place to deal with the short-term, medium-, and long-term because this could take a while. And it will not be the only time we deal with it. And so while we can't have the control of figuring it out -- and I have really no prediction -- my big concern is the uncertainty associated with how long this goes on and then whether or not there will be retroactive pay. And I have real doubts this time that retroactive pay's going to be part of the picture.
NNAMDIAnd, Max Stier, you're pressing ahead, as you talked about, with plans for that ceremony on Thursday for handing awards for service in government. Where will it be taking place?
STIERIt'll be at the Mellon Auditorium at 5:30. Reception's 6:30. The awards ceremony, extraordinary people who are making a real difference for the country. And I think fundamentally, that's where we need to get back to. It's not about big or small government. Whatever the dispute is around the size of government, we need to make sure that what we have works real well. And we are not pursuing a strategy to permit that to happen today.
STIERWe need to recognize the great things that are happening, so more people actually want to pursue careers in public service, and we reinforce the great work that's occurring already.
NNAMDIMax Stier is president and CEO of the Partnership for Public Service. Thank you for joining us.
NNAMDIJim Dinegar is the president and CEO of the Greater Washington Board of Trade. Jim Dinegar, good to see you.
DINEGARSame here, Kojo. Thanks.
NNAMDIAnd thank you all for listening. I'm Kojo Nnamdi.
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