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Budget impasse slowly
affecting private sector

December 29, 1995
Web posted at: 9:15 p.m. EST

From Correspondent Kathleen Koch

WASHINGTON (CNN) -- As a partial government shutdown stretches into its 13th day, leaving 260,000 federal employees idling, the effects of the budget impasse are gradually spilling into the private sector as well.

Contractors who provide services to the federal government are now feeling the financial heat, and laying off their own employees.

DynCorp, a high-technology company providing engineering and software services to the government, has furloughed 350 workers after its contract with the government was stopped. As a result, it is losing $100,000 a day.

Chalk Dawson

The company's project manager, Chalk Dawson now finds himself at home with no job. "I try not to dwell on this too much," he said. "Because it'll just eat me alive. It'll frustrate me. It'll anger me and there's nothing I can do about it." (94K AIFF sound or 94K WAV sound)

DynCorp's CEO, Paul Lombardi, said the company is large, and will survive this crisis if a budget agreement is reached "within a reasonable period of time." "But certainly it's going to have an impact on our bottom line," he said.

It's not just DynCorp which has been hit by the stalemate in Washington. Nine federal agencies have been closed since their spending bills ran out early December 16 as Congress refused to pass a temporary measure without an overall budget accord.

John Koskinen

John Koskinen of the Office of Management and Budget said it estimated that the nine closed agencies between them accounted for roughly $15 billion worth of "service contracts. "We think at least 200,000 to 250,000 people work for these contractors." (162K AIFF sound or 162K WAV sound)

Some fear that a few companies might be compelled to file for bankruptcy if the government closure drags on.

Bert Concklin, president of Professional Services Council, predicted that if the shutdown continued for another week, some companies would be irreversibly harmed -- companies that have worked with the government for decades.

While the government has been forced to stop many contracts with private agencies, many furloughed federal workers are furious at receiving paychecks that give them half their normal salary.

But lawmakers and the president are still getting paid, after House Republicans defeated a move to stop their paychecks.

Tom Delay

Rep. Tom DeLay, R-Texas, justified the measure, saying he was not a federal employee. "I'm a constitutional officer...My job is in the Constitution of the United States." (102K AIFF sound or 102K WAV sound)

Some of those "officers" are heading on overseas trips but the state department is urging them to postpone their travel plans as missions abroad are understaffed on account of the furlough.

"State department officials are in the embarrassing position of saying 'look we can't offer to carry all the bags of the members of Congress who are traveling the way we normally would and we feel guilty about that'," said White House spokesperson Mike McCurry.

Closed sign

Rep. Byron Dorgan, D-North Dakota, said it would be in poor taste for lawmakers to leave the country now. "Those who have been responsible for the shutdown in government and now board an airplane to take a foreign Congressional trip ought to be charged with leaving the scene of an accident," he said. (119K AIFF sound or 119K WAV sound)

Furloughed government workers have one place to turn to, if they so wish. A Washington church is offering coffee, pastry and counseling for federal employees.

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