Industry Reacts to Debt Limit Bill
August 3, 2011

By Sahely Mukerji

President Obama signed the bill to raise the federal debt limit and cut government spending on August 2, after the Senate approved the measure 74 to 26, with majorities of both parties supporting it. The Congress now has to lift the $14.3 trillion debt ceiling, and the Treasury has $400 billion in additional borrowing power. While the bill ended a partisan stalemate that would put the nation into default, the question in everybody’s mind, including glass professionals, is how this will affect their businesses.

“Although details of the deal are still unknown, we are hopeful it will keep interest rates low to provide financing to businesses and organizations to allow their building projects to continue to move towards successful completion,” says Mark de Naray, chief executive officer of St. Cloud Window Inc. in St. Cloud, Minn.

Tom Wright, vice president of Sound Glass in Tacoma, Wash., is somewhat less hopeful. Wright quotes Albert Einstein, saying, “‘The significant problems we face cannot be solved by the same level of thinking that created them.’ From my understanding we, our elected officials, are looking at this problem the same way it was created. This will not reduce the debit we have created, it will reduce only the amount of spending. This might just put us in a double-dip rescission. Once people understand what happened that could tip the scales. This, of course, will be bad not just for our industry, but for the economy as a whole. We have to think outside our comfort level to fix our problems. This bickering must end and real leadership needs surface or we are in for a dark period in our history.”

Eric Dean, general secretary of the office of the International Association of Bridge, Structural, Ornamental and Reinforcing Iron Workers, adds, “The effect of not doing anything would have devastated an already struggling construction economy that is just showing some signs of improvement. However, a reduction in federal spending has the potential to negatively impact the one area of construction that was government spending, such as GSA and infrastructure. The Ironworkers remain optimistic that there will not be spending cuts for President Obama’s initiative to make buildings more energy efficient and to provide considerable energy savings and adding to the aesthetics of first and second generation building envelopes. Without private spending, this has been an area of significant improvement in the curtain wall industry that could impact  our members and the signatory contractors. Spending cuts in a recession is contrary to proven methods that have led us to a road to prosperity before. Our industry has seen a dramatic decline in construction spending that started prior to the economic meltdown in 2008 resulting in the worst time since the Great Depression. We know that something had to be done and regret revenue was not part of the equation as it would not have potentially reduced federal construction spending as much. When our members our working it is a sign of the health of our national economy.”

Bill Stone, president of Louisville Plate Glass Co. in Louisville, Ky., predicts: “The glass industry will not be immediately impacted by the federal debt negotiations because the alleged interest raising event of default was avoided. Therefore interest rate sensitive projects will not be delayed because of rising money costs. However,” he adds, “the bigger issue of massive new regulation, i.e., Dodd Frank financial overhaul, Obama Care, the NLRB attack on employers as personified by the Boeing case, could all bring the economy crashing down into the second leg of a double dip recession. We are considering a substantial expansion, but we are so concerned about the anti-business rhetoric and actions of the current administration, that we may delay until after the 2012 election.”

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