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A new plane and beers waiting while businesses feel the pain of stopping

By Jennifer A. Dlouhy, Ari Natter and Alan Levin / Bloomberg

Airlines can not get permission to add new aircraft to their fleet. Mortgage lenders are not able to verify the income of borrowers. And brewers can not sell new beers as long as label approval is pending.

In both large and small businesses, businesses are starting to feel the stalemate in government-imposed funding that has shut down nine large departments, slowing down federal reviews of everything from mergers.

"The impact will multiply as the days and weeks continue," said Stan Collender, a long-time congressional budget assistant who edited thebudgetguy blog in Washington. "He's only getting bigger."

The shutdown came in its 14th day on Friday with little sign that President Donald Trump and Congress will resolve the dispute in front of a border wall that disrupted operations in about a quarter of the federal government. Trump and legislators from both parties are scheduled to meet at the White House late Friday morning, but each party was sinking into the torch when a new Democratic majority took power in the House.

The effects are beginning to affect the economy. Here is an overview of how trade is interested in trade.

• Disturbances for airlines: Some airlines are starting to struggle to add new aircraft to their fleet and launch new pilot training programs, said Thursday the Washington Group of Commerce, Airlines for America, in a statement.

Commercial transporters can not perform these tasks or dozens of other routine actions without the signature of the Federal Aviation Administration's inspectors, said Mike Gonzales, vice president of the union for aviation safety specialists. professional. And now, the vast majority of the 5,000 FAA employees are not working, said Gonzales.

Southwest Airlines, for example, says the closure is likely to delay Hawaii's intention to serve Hawaii, chief executive Gary Kelly said in a message to employees on Monday.

And while Delta Air Lines hopes to start flying a new airliner, the Airbus A220, on January 31, it will not be able to get approval without the security inspectors now on leave from the FAA. Delta does not expect any disruption to its schedule, the carrier said in a statement by e-mail.

Most air traffic controller formations have been suspended, which has slowed the arrival of new employees in a system that already has 30 years of manpower, said Paul Rinaldi, president of the National Air Traffic union. Controllers Association.

The FAA stressed that "the airspace of the country is totally safe and operational," noting that "air traffic controllers and technicians responsible for maintaining the country's airspace system continue to operate without pay while 'they fulfill a crucial mission to ensure the safety of the public'.

Even planes in the air can be a little more empty with federal agencies locking out employee travel.

Daniel McKenzie, an analyst at Buckingham Research Group, told investors that he was considering lower orders related to the account closure as a "key factor" in slowing business sector growth in the first quarter of 2019.

• mortgages: Homebuyers and lenders are beginning to notice the effects of the closure, while an Internal Revenue Service revenue verification operation has shut down. This could mean delays for borrowers to get approved for mortgages.

The service usually helps mortgage lenders confirm income information from loan applications within two to three days, but the IRS says it is forbidden to process this paperwork without going through a transaction.

The months of December and January are quiet months in the real estate industry, but "if it goes beyond a week, it will delay closures," said Pete Mills, senior vice president of policy for the province. Mortgage Bankers Association.

• mergers: The closure also put an end to some government reviews of foreign investment decisions and mergers.

The Federal Communications Commission, which was operating with the remaining funds, suspended most of the dealings on Thursday, including in the merger review, such as the $ 26.5 billion supply from the non-core service provider. T-Mobile US wire on Sprint Corp.

The Canadian mining company Americas Silver Corp. investors warned Wednesday that its merger with Colorado-based Pershing Gold Corp. could be delayed beyond the January 14 target, pending approval from the US Foreign Investment Committee .

Cfius, which examines foreign acquisitions of US companies by US companies in relation to US security risks, informed the mining company that the deadlines for transactions under review or investigation had been suspended for the closure.

• Food and drugs: Although the Food and Drug Administration is still reviewing pending requests, which are supported by a user fee, it does not accept any new requests for approval.

Brewers will also have to wait to launch new beers. The office of the tax on trade and alcohol, which approves the beer labels, has been closed. The agency received about 200,000 applications last year for new beers, wines and spirits.

Nutritional High International Inc., a medical marijuana company, warned investors that without a new spending agreement, some protections against federal lawsuits have disappeared, at least temporarily.

The issue is an addendum that Congress has added to expenses incurred over the past four years to prevent the federal government from prosecuting individuals for violating federal laws against regulated medical cannabis, insofar as they act in accordance with the rules. of the state. The lack of credit means that there is no protection in place and that the government has "the power to prosecute people" for certain violations, said the company in a document filed on December 27th.

• Merchants in the dark: This closure jeopardizes the January 8 release of the Census Bureau's Foreign Trade Report, which sheds light on exports of soy, crude oil, automobiles and other products, which is particularly important for the markets, looking for evidence of China's re-emergence. a buyer of American agricultural products.

While traders are becoming more and more ignorant, some government regulators are watching them.

While the Securities and Exchange Commission continues to monitor stock trading, only 275 of its most critical staff members work. And for the most part, the agency does not open new investigations into possible mistakes. The agency also does not approve plans for new initial public offerings or requests from mutual fund companies to launch exchange-traded funds and other products.

• Pipelines: This judgment is a chilling job aimed at developing the environmental analyzes required for energy projects, motorways and other infrastructures.

Fish and Wildlife Service Unable to Work on New Court-Ordered Trial of Dominion Energy Inc.'s $ 7 Billion Atlantic Pipeline Designed to Deliver Natural Gas Over 600 Miles of West Virginia , Virginia and North Carolina.

This closure also creates additional delays for TransCanada Corp.'s Keystone XL pipeline. The Department of State, one of the agencies without federal funding, has developed a new review of the $ 8 billion project: an additional environmental impact statement analyzing the potential effects of Keystone XL on greenhouse gas emissions. greenhouse effect, cultural resources and the energy market.

The Environmental Protection Agency, the Department of the Interior and the Environmental Quality Board are actively involved in the analysis of the consequences of the main measures taken by governments, in accordance with the Law on the Protection of the Environment. the environment. Their closure can also affect other departments.

"With the widespread closure of all these agencies, there is certainly a lot of NEPA work that has slowed down or been stopped, and that will affect the timing of decisions," said Ann Navaro, a Bracewell LLP partner who previously worked at Interior and Ministries of Justice. If the closure "continues next week or longer, I would think we would start to see a fairly significant impact in terms of slowing down analyzes and other decisions."

• offshore energy: The ruling appears to have trapped the Interior Department authorizations allowing seismic surveys to help locate oil under the Atlantic Ocean. Five companies, including ASG TGS-NOPEC Geophysical Co., WesternGeco Ltd., a subsidiary of Schlumberger Ltd., and a unit of ION Geophysical Co., were in the process of obtaining these authorizations before the end of funding.

For the moment, many other energy-related permits are still coming out of the Interior Department, which has taken steps to ensure that the government's closure does not mean the closure of the oil industry.

But the larger work to accelerate the development of offshore energy has been complicated. For example, the Bureau of Ocean Energy Management was finalizing a plan to sell offshore drilling leases in US waters prior to closure. This job is stopped now.

And the shutdown is likely to postpone public meetings this month on Vineyard Wind's bid to build a large wind project 15 miles south of Martha's Vineyard. The Ocean Energy Board, which is analyzing the potential effects of the project on the environment, has announced that scheduled meetings on January 8 and 9 in Massachusetts and Rhode Island would be canceled if the federal government is still in the state closed on January 7th.

• Income taxes: Although the IRS can accept tax returns in a judgment, it can not process refunds until Congress has reached an agreement.

An extended stop extending the tax filing period, which usually begins in late January or early February, may require taxpayers to wait longer than expected for the refund checks they planned to use to pay their bills or make big purchases.

This creates a business opportunity for tax consulting and software firms H & R Block Inc. The company offers its customers up to $ 3,000 of their prepayments as of January 4 – even if the IRS is closed. Interest-free loans would be repaid from the repayments of federal or state taxpayers.

• Gateway Companies: With approximately one-third of national parks closed – and others remaining open, but with limited services – the effects are felt by communities and transit companies that depend on tourist travel on the sites. According to the National Parks Conservation Association, a public interest group, some 425,000 visitors typically spend $ 20 million a day in January in cities and communities around national parks.

"Many businesses around national parks are small businesses and therefore have no room for error," said John Garder, senior director of the Washington-based association. "For some parks, it is the busiest time of the year. We are seeing cancellations. There is a lot of confusion of visitors. "

Some businesses inside national parks are also closed. Senator Patrick Leahy, Dvt., Pointed out the tragic plight of Hurricane Ridge Winter Sports, which operates a snow playground and a small lift in Olympic National Park in Washington State. The road to Hurricane Ridge is closed because no member of the National Park Service is there to clear snow.

Even businesses in the shadow of federal buildings are seeing their sales plummet.

At the City Cup & Coffee, a café across from two federal buildings in Oakland, California, business is down by 60 percent due to the closure of the store, said owner Sam Samhouri, who has reduced his coffee orders and pastries.

"All my clients are not working," Samhouri said during a phone interview. "Between Democrats and Republicans, we pay the price."

Contributors to Bloomberg: Mario Parker, Rachel Adams-Heard, Stephen Cunningham, Elizabeth Dexheimer, Laura Davison, Alan Levin, Todd Shields, Bobby Magill, Stephen Lee, Black Thomas, Mary Schlangenstein, Justin Bachman, Patrick Ambrosio, Ben Bain, David McLaughlin , Anna Edney and Lydia Mulvany.

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January 5, 2019

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