SHAHEEN: BUDGET FIGHT HURTS LOCAL BUSINESSES

Shaheen offers biennial budgeting as a way to change how Washington does business

March 11, 2011

(Manchester, N.H.) – U.S.  Senator Jeanne Shaheen (D-N.H.) called on colleagues to finish protracted budget negotiations, which are creating a climate of uncertainty that’s hurting local businesses. During a visit to one such company, Velcro USA in Manchester, Shaheen also said her biennial budgeting bill could help change the way Washington does business, by moving Congress from an annual spending process to a two-year cycle and allowing for a more thoughtful process that would reduce government waste.  Biennial budgeting has been used successfully in New Hampshire for years.

The federal government has been operating under a series of temporary spending measures – called continuing resolutions – since Congress failed to pass annual spending bills by the Sept. 30 deadline of last year. The most recent continuing resolution passed earlier this month funds the government for just two weeks. Congress is considering passing another two-week extension on March 18 if a final deal hasn’t been reached. In the last 30 years, Congress has only completed the annual budget process on time twice.

“This budget impasse has a real impact on businesses and jobs in New Hampshire.  As Velcro’s employees will tell you, an uncertain budget leads to stalled contracts and stalled hiring. That means we are missing out on jobs because Washington’s budget process is broken,” Shaheen said. “We need to come together on a reasonable compromise and get this fight behind us. And we need to fix our system. Biennial budgeting works in New Hampshire, so let’s bring it to Washington. That way we can go through the budget process ever two years, not every two weeks.”

Velcro USA, headquartered in Manchester, provides fastening solutions for businesses and consumers around the world. Because of the recent budget uncertainty, many of Velcro’s government clients have been hesitant to make purchases, hindering Velcro’s ability to plan efficiently and grow its business. 

“Velcro USA Inc. has been working with the Department of Defense and its contractors to outfit our men and women in uniform for 40 years.  We have heavily invested in research and development, and production right here in New Hampshire to manufacture top-notch, 100 percent American-made technologies that assist our troops in their mission readiness, health, and comfort,” said Velcro Americas President Scott Filion. “The absence of a defense spending bill and a final budget for this year is beginning to greatly affect our business.  Our concern is that this funding uncertainty will continue to present challenges to adequate lead times, availability of materials, and other challenges that will delay delivery of equipment to our military personnel.  We are starting to feel the impact of a continuing resolution every two weeks but, fortunately we supply a broad range of markets and are able to maintain production in the face of such uncertainty.  However, for many companies in this limited U.S. textile and soldier equipment supply chain, this could have a significant impact."

Nitro Security is another company that has felt the effects of short-term federal budgeting. The Portsmouth firm, which works in the emergent cyber-security industry, has significant contracts protecting data systems at the Department of Defense, NASA, and even the Food and Drug Administration. Like Velcro, it too has had to deal with stalled contracts and hiring as a result of the budget standoff.

"The delays in establishing a federal budget and the subsequent uncertainty around what will happen with the remainder of this fiscal year, complicates various business decisions for a fast-growing company like Nitro,” said company CEO Ken Levine. “We could certainly accelerate hiring plans if we had some visibility into what will be and won't be funded. Plus, we are in cyber security. So in addition to the impact on our business, these delays mean the government is not getting the latest and greatest cyber defense systems in a timely manner. We are pretty sure the bad guys don't have to wait 6 months for a budget. It’s just not efficient for either of us."

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