First Job of House Small Business Committee: Avoid Another Shutdown

By Jennifer Mangone, WIPP Government Relations

Despite the 116^thCongress being sworn in on January 3^rd, the partial government shutdown caused a delay in getting things moving on the Committee front. So, it was no surprise that the House Small Business Committee’s first hearing of 2019 was entitled “The Shutdown: Economic Impact on Small Businesses.”

There’s always a buzz of excitement in the Committee room at the beginning of a new Congress and the environment for today’s hearing was no exception. In her new role (but not first time) as Chair, Nydia Velazquez (D-NY) got right down to business, introducing her colleagues, new and old, on the Committee, including Ranking Member (and former Chair) Steve Chabot (R-OH), stressing the importance of the bipartisanship the House Small Business Committee is known for, and introducing the witnesses who would be testifying.

The stories of four witnesses on the government shutdown impact on the nation’s small businesses, were delivered to a standing room only crowd. The robust witness list included Dr. Matthew Shapiro, Professor of Economics at the University of Michigan; Bill Butcher, founder of Port City Brewing Company; Heidi Gerding, CEO of HeiTech Services, Inc.; and Charles “Tee” Rowe, President and CEO of America’s Small Business Development Centers.

The hearing testimony and questioning centered primarily around the shutdown impact on SBA Lending and Entrepreneurial Development Programs, unforeseen consequences for small businesses all throughout the supply chain, and last, but certainly not least – the impact on small business federal contractors.

Heidi Gerding, CEO of HeiTech Services, Inc., a company that works solely on government contracts, testified at length about the unique situation a government closure places on contractors. She described the time and effort it takes to recruit new workers on a government contract, and stressed the importance of remembering that contractors, unlike federal employees, are not necessarily guaranteed backpay. She described how in the first three weeks of the shutdown, she allowed her employees to take unpaid leave before deciding to take a profit detriment for her company and reinstate their pay. Gerding ended her testimony by saying, “Don’t forget government contractors.”

The Small Business Committee members of the 116^th Congress listened carefully throughout the hour and a half long hearing. While there are many differences of opinion on how to avoid shutdowns in the future, and on how to prevent the government from lapsing into another on February 15, one thing is clear: the stories of impact on small businesses are real and no one wants to go through this again. The impact from the last is already too great.

You can view the written witness testimony and watch a recording of the hearing here.

Starting a New Congress With A Shutdown

By Ann Sullivan

It’s kind of like rain on the 4^thof July.  After picnics and family gatherings, the highlight of the day is the fireworks. But a thunderstorm can quickly bring down the holiday celebrations.   That’s what it felt like on January 3^rd, when the new Congress was sworn in.  The excitement, dampened by the “rain” of the shutdown, loomed over the festivities.

The shutdown rained on the excitement of new/continuing business anticipated by federal contractors and the consequences were substantial.  According to a report recently released by the House Small Business Committee, small firms nationally lost out on 6,875 contract actions a day, worth $301 million, during the shutdown.  According to Bloomberg, federal contractors lost around $200 million per day during the shutdown.  

Women contractors were also affected by the shutdown.  According to Bloomberg Government, in FY2018 $768.8 million in federal contracts were awarded to women-owned small businesses. More than 38% of those contracts won by women were awarded by agencies impacted by the shutdown.  These statistics are the direct costs, and the indirect costs are difficult to measure but felt by the women’s business community.  Members struggled to keep their employees, meet payroll and get important approvals from government agencies. 

Interestingly, most WIPP members I heard from did not necessarily see this through a partisan lens.  They saw it through a practical lens- that government shutdowns are not a way to resolve disagreements.  Unlike the media, I didn’t hear anyone declare “victory,” because really no one won.  While members disagreed about the resolution to border security/immigration policies that ushered in the shutdown, everyone expressed weariness over the budget tactics of the last five years.

WIPP was on the case– we communicated the risks shutdowns mean for women owned businesses, especially government contractors.  We urged Congress to include making small business contractors whole, given the length and difficulty of the shutdown.  Lastly, we urged the Congress to pass legislation that prevents government shutdowns from happening.  Both Republican and Democratic bills would put the government on a continuing resolution if the Congress could not get regular appropriations over the finish line in a timely manner.

As we advocate on behalf of women entrepreneurs, we know to expect rain.  But we are equally hopeful.  More women than ever were elected to this new Congress.  A new Congress means new or reinvigorated leadership.  The enthusiasm for women’s engagement in policy has never been greater.  Just like our members, women elected to Congress will press for a practical approach. It does not mean that partisanship will go away—that is the stuff of politics.  But we feel that “agreeing to disagree” has a much better shot at becoming the standard by which policies are measured with 131 elected women.  

If you have never taken the step of contacting your elected officials, visiting their offices or inviting them to come to your business, now is the time. The result will be empowering. Preventing future shutdowns requires constituent communications as well as organizations that represent you. Don’t know how to start?  Go to www.house.govor www.senate.gov. The websites will direct you to your elected officials based on your zip code.  The women’s business community and the economy need your voice.

The nicest thing about rain is that it always stops.