Manufacturers tempered their relief about the end of the 16-day government shutdown and debt-ceiling dispute with grave concerns that the nation faces a repeat performance of the political showdown.
“Today’s agreement avoided the immediate economic catastrophe, but President Obama and Congress have done nothing to address the underlying causes of our serous fiscal problems,” Jay Timmons, president and CEO of the National Association of Manufacturers (NAM), said in a statement.
“All that is guaranteed is that we will find ourselves in this situation again in a few months.”
Washington’s political donnybrook ended only minutes before a midnight deadline when the government’s ability to borrow money would have expired. House Republicans who demanded concessions from the administration backed down and agreed to finance government operations until Jan. 15 and raise the nation’s debt ceiling through mid-February.
The Senate passed the enabling legislation first and the House vote followed late Wednesday night.
The agreement sets the stage for another round of budget talks. Conservative Republicans in Congress vow to continue their demands for spending cuts and changes to the Affordable Care Act.
Timmons urged the president and Congress put aside political differences and focus on the economic recovery.
“Manufacturers need Washington to implement reforms that will address our broken tax code and massive entitlement costs to help our nation avoid such brinksmanship in the future,” he said. “Policymakers must put a pro-growth, pro-jobs agenda ahead of the partisanship and gridlock.”
The gridlock has taken a heavy toll on the nation’s economy. The shutdown forced the furlough of hundreds of thousands of government workers and had a ripple effect on many businesses that depend on government contracts.
The shutdown sucked approximately $24 billion out of the economy, according to analysts at Standard & Poor’s. The rating agency projects that the economy will grow 2.4 percent in the fourth quarter, as to the 3 percent growth predicted before that shutdown. Most analysts are predicting that growth will remain subpar, at an annual pace of 2 percent or less.
Many companies braced for the shutdown even before it happened. Half the CEOs polled last month by the Business Roundtable said the political conflict in Washington was hampering their hiring plans. The likelihood of a continued budget battle could further impact employment and investment, they said.
The stalemate led to the deepest plunge in consumer confidence since the collapse of Lehman Brothers in 2008.