WASHINGTON — As a partial government shutdown grows ever longer over President Donald Trump’s demand for a border wall, the lapse in federal funding is starting to ripple through the U.S. in some unexpected ways.
Just ask the alcohol industry in Texas and beyond about a problem that is proving to be more than pint-size.
Some wineries, breweries and other producers are jammed up by the closing of a Treasury Department agency — part of the 25 percent of the government that’s unfunded — that approves labels for new products to be sold across state lines and permits for new booze-related facilities.
Certain new beers and wines can’t be released, though customers might not notice the delay for some time. Fledgling construction and expansion projects are sidelined. Business plans, cash flows and even jobs may be in jeopardy.
The bottom line: Even a partial government shutdown has a long reach.
“They talk about it being only 25 percent of the agencies being affected — and that’s all,” said Mike McHenry, founder of Wedding Oak Winery, a Hill Country operation that’s being hit by the shutdown. “But if it’s the agency for your particular business, then you’re impacted.”
The funding fight is approaching the longest shutdown in American history, with Trump and his Democratic rivals at odds over a proposal for a $5.7 billion border wall.
Much attention has been paid to the some 800,000 federal workers who’ve either been furloughed or had to clock in over the last few weeks without a paycheck. That group includes nearly 36,000 federal employees in Texas, according to an analysis by Governing magazine.
But the list of other impacts is far-reaching: Uncertainty over key safety net programs. The inability to receive certain small business assistance. A pinch on scientific research. A delay in mortgage approvals. The closure of popular museums. The suspension of merger reviews.
“The adverse consequences of the shutdown are wide and growing,” U.S. Chamber of Commerce executive vice president Neil Bradley wrote this week in a letter to Congress. “With each passing day, the situation will only get worse.”
Some shutdown side effects even border on the absurd.
Dallas trade attorney Adrienne Braumiller noted, for instance, that some companies just won exemptions from tariffs imposed by Trump. But they can’t actually benefit — and get their money back — because of shutdown staffing issues at U.S. Customs and Border Protection, she said.
“It’s really kind of chaotic and disappointing,” she said.
The shutdown drama has nevertheless lacked the same urgency toward a resolution seen in past shutdowns.
That dynamic may reflect that the main fight has been locked up in heated rhetoric over a relatively narrow part of the immigration debate. Or that 75 percent of the federal government, including defense operations, is operating as normal.
Or that the Trump administration has sought to blunt some of the most obvious effects of the shutdown.
The IRS said it will still process tax returns and issue refunds, even though it previously said it could not do so. The National Park Service is using entrance fees to help pay for cleanup of trash and human waste at some sites, even though critics have said the workaround may be illegal.
The U.S. Department of Agriculture announced this week that benefits provided through the Supplemental Nutrition Assistance Program will be funded through February.
“Our mission from the president is to make this shutdown as painless as possible, consistent with the law,” Russ Vought, acting director of the Office of Management and Budget, said this week at a briefing with Vice President Mike Pence.
But the shutdown conundrum now before brewers, vintners and distillers illustrates how the shuttering of even seemingly mundane bureaucratic operations — in this case, Treasury’s Alcohol and Tobacco Tax and Trade Bureau — can have real consequences.
The “TTB IS CLOSED” during the funding lapse, according to its website, and “no personnel will be available to respond to any inquiries.”
At Wedding Oak Winery in Central Texas, McHenry is facing a double-whammy.
He can’t bottle wine he’s custom-made for some clients without label approval — messing up production schedules and taking up storage space. And separately, no progress can be made on a new location the winery plans to open in Fredericksburg until a federal permit comes through.
It all adds up, he said.
“It’s not insurmountable by any stretch,” said McHenry, who said he’s heard similar woes from others in his role as president of the Texas Wine and Grape Growers Association. “But it’s problematic.”
Zach Prichard, president of Krebs Brewing Co., is likewise facing a crunch.
Krebs owns popular Oklahoma brewery Prairie Artisan Ales, which is known in Texas and beyond for releasing new beers throughout the year. It was just getting ready, pending label approval, to ship out a new imperial stout called Oh Fudge when the shutdown took hold.
Now the brewery is unable to move a beer that it was counting on for hundreds of thousands of dollars in sales — more than 50 percent of what it was hoping to sell this month.
“The longer this thing goes on, the more serious it gets,” Prichard said, explaining that the shutdown came at a “particularly bad time” because January is a month when the company typically doesn’t have the most cash on hand.
Thirsty customers in Texas and beyond aren’t likely to notice the suds shutdown quite yet, given the time it takes to traverse the multi-step process from tank to table.
The nature of the alcohol industry in Texas may also limit the damage. Charles Vallhonrat, executive director of the Texas Craft Brewers Guild, said the vast majority of craft brewers in Texas sell only within the state, meaning they don’t need label approval from the feds.
But he and other industry experts said concerns will likely grow louder if the federal shutdown persists.
“It’s just a matter of time,” he said.