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Federal Budget Crisis Resolved, but at what cost (and for how long)?

Written by  Douglas Cooke

October 17 saw the end of the 16-day federal government shut down as Republicans conceded to the White House and Democrats' demands. That’s the good news. The bad news is that all they did was agree on a plan to fund the government until January 15, 2014 and raise the debt limit until February 7, 2014. Meanwhile, the shutdown cost the government billions of dollars and damaged the nation’s international credibility. So effectively all that was accomplished was a short term band-aid to an ongoing and dangerous financial crisis within the US Government. Did this instill any confidence in the American people in their elected officials? Can all the furloughed government employees feel secure about what might happen again in the next few months? And what implications does this past and possible future shutdown mean for the travel industry?

According to the U.S Travel Association, the travel industry incurred a loss of $152 million a day in economic output in the US due to the latest government shutdown, and it also affected up to 450,000 workers supported by the travel industry. During the 16-day shutdown, the industry incurred a loss of 2.4 billion. “The government shutdown is throttling America’s travel sector, which, until now, has been one of the principal drivers of U.S. economic recovery,” said U.S. Travel Association President and CEO Roger Dow.

Our National Parks were one of the travel sectors most dramatically affected by the shutdown, as they were forced to close for 14 days. This had an effect not only on park employees that were furloughed, but also on the thousands of visitors that had prepaid for campsite reservations and were forced to seek alternate accommodations when they were turned away at park gates. According to the National Parks Conservation Association, 401 national park units closed, 21,000 National Park Service employees were furloughed, as many as 750,000 visitors were turned away daily, while $450,000 in revenue was lost by the park service every day. Additionally, local gateway communities lost as much as $30 million per day while the national parks were closed.

Other industry related losses suffered included 80,000 passport applications that were delayed, and 80,000 visas were also delayed. The resulting postponement or cancellation of travel cost U.S. tourism industries and airlines millions of dollars.

This latest crisis comes on the back of the mandated governmental budget cuts earlier this year that also had an impact on airline and hotel spending by government employees, and indirectly on the travel agents that booked these trips.

For now, all we can do is wait and see what will happen early next year when the current agreement expires and both sides of the aisle are once again forced to come to terms on out of control government spending and the trillions of dollars of debt. Or, on November 5 we can use our power as U.S.citizens and voters to send a clear message to our representatives that they are accountable to the American people, and if they can’t do the job they are being paid to do (even while other workers were not being paid), we will elect others to take their place. Your vote matters!

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