HVAC Breaking News

Oct. 2, 2013: Government Shutdown Affects HVACR Industry

Shutdown Delays Rulemakings, Affects Small Business Loans

October 2, 2013
On Tuesday, the Federal government began shutting down its non-essential services for the first time in 17 years after Congress was unable to pass a Continuing Resolution to fund the government beyond Sept. 30. The shutdown is a result of a partisan disagreement over the Affordable Care Act of 2010, also known as Obamacare, which began open enrollment on Oct. 1.

Some immediate effects of the shutdown include: the closure of all national parks, museums, and monuments; decreased funding for programs that support and help feed needy families, including the WIC (Women, Infants and Children) program; and the indefinite furlough of hundreds of thousands of federal workers.

And while some in the HVAC industry may not yet feel the direct impact of the government shutdown, the long-term consequences could be far-reaching and damaging for contractors, distributors, and manufacturers.

Industry Impacts

Charlie McCrudden, vice president for government relations for Air Conditioning Contractors of America (ACCA), said the shutdown is already affecting a small portion of the HVAC industry.

“Contractors working on federal contracts may not have access to federal buildings. Those applying for loans from the Small Business Administration are going to see delays in loan approvals,” he said. “Most of their loan services are shut down. And employers cannot use the federal E-Verify system when hiring new workers.”

In addition, partial shutdowns in the U.S. Department of Energy (DOE) and the Environmental Protection Agency (EPA), along with other regulatory bodies, means the rulemaking process for many industry-related products and efficiency standards has come to a grinding halt.

“We’re still waiting for DOE to start the enforcement rulemaking for the central air conditioners and heat pumps regional standards that go live on Jan. 1, 2015,” McCrudden said. “Supposedly, DOE is getting ready to release the notice of proposed rulemaking (NOPR), but that certainly won’t happen during the shutdown, and I’m getting concerned, because we’re just over a year from that compliance date and we don’t know what that enforcement plan will look like or how it will effect contractors.”

The shutdown also cripples the ability of government agencies to inspect and regulate factories, track the spread of disease (including the flu), and perform other vital functions relating to safety and quality assurance, which could be disastrous – especially if the shutdown continues.

“The longer this goes, and the more the shutdown is going to impact people’s daily lives,” he said. “If meat inspection is slowed, then what does that say about the safety of the food we eat? There are all kinds of impacts.”

How Long Will It Last?

With Republicans and Democrats in the House and Senate gridlocked over Obamacare for the time being, it is not known when the shutdown might end. But fast approaching is another issue of equal or greater importance that will soon demand Congress’ full attention: Reaching our debt limit.

“House and Senate Republicans can continue to try to rescind the Affordable Care Act, which they have done more than 40 times over the past few years, but the pending debt limit is a very, very serious issue that must be resolved by October 17th,” McCrudden said.

On Monday, a coalition of 251 organizations from across the country – including ACCA and the Air Conditioning, Heating & Refrigeration Institute (AHRI) – sent a letter to Congress urging them to pass a Continuing Resolution to fund the federal government, raise the debt ceiling, and then concentrate on the financial issues plaguing the government.

“We have to address federal spending, the deficit, and our debt, but we can’t do any of that until we deal with what is in front of us right now,” McCrudden said.

In the meantime, and with just two weeks left to go before the nation reaches its debt limit, the government shutdown continues.

“The longer this goes on, the more implications there could be, and the more it will impact contractors,” McCrudden said. “We’re in completely uncharted territory here.”

Shutdown Woes

For many Americans, the government shutdown is already affecting their daily lives. According to the Washington Post, getting a passport may be harder (especially if the passport office is located in a closed federal building), processing federal student loan or grant applications or payments may take longer, getting tax help from the IRS is impossible (its helpline has gone offline), and, perhaps most depressingly, the aww-inducing Panda Cam at the National Zoo has gone dark.

But that’s not all. According to usa.gov, the government shutdown affects federal services and operations in the following ways:

• Vital services that ensure seniors and young children have access to healthy food and meals may not have sufficient Federal funds to serve all beneficiaries in an extended lapse;

• Call centers, hotlines and regional offices that help veterans understand their benefits will close to the public;

• Veterans’ compensation, pension, education, and other benefits could be cut off in the case of an extended shutdown;

• Every one of America’s national parks and monuments, from Yosemite to the Smithsonian to the Statue of Liberty, will be immediately closed;

• New applications for small business loans and loan guarantees will be immediately halted;

• Research into life-threatening diseases and other areas will stop, and new patients won’t be accepted into clinical trials at the National Institutes of Health;

• Work to protect consumers, ranging from child product safety to financial security to the safety of hazardous waste facilities, will cease;

• The EPA will halt non-essential inspections of chemical facilities and drinking water systems;

• Permits and reviews for planned energy and transportations projects will stop, preventing companies from working on these projects. Loans to rural communities will be halted;

• Hundreds of thousands of Federal employees – including many charged with protecting us from terrorist threats, defending our borders, inspecting our food, and keeping our skies safe – will work without pay until the shutdown ends; and

• Hundreds of thousands of additional federal workers will be immediately and indefinitely furloughed without pay.

A few services will be largely unaffected. During the shutdown:

• Social Security beneficiaries will continue receiving checks;

• The U.S. Postal Service will keep delivering mail;

• Active military will continue serving;

• Air traffic controllers, prison guards, and border patrol agents will remain on the job; and

• NASA Mission Control will continue supporting astronauts serving on the Space Station.

Also, the president, vice president, and members of Congress will continue to get paid. Charles Osgood of CBS Radio noted that some members of Congress said it would be “unconstitutional” for them not to accept their pay.

For a list of services that have been affected, visit www.usa.gov/shutdown.shtml.

Publication date: 9/30/2013

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