Corporate America's leaders are mentally preparing for an especially long and chaotic government shutdown.
Executives worry a protracted government shutdown will only add uncertainty to an already confusing business environment. In an era of persistent inflation, labor strikes and rising borrowing costs, they argue it would be another headache -- and a self-inflicted one at that.
"We are deeply concerned," Neil Bradley, chief policy officer at the US Chamber of Commerce, told CNN in a phone interview. "The concern is growing -- almost by the day -- because once we are in a shutdown there doesn't seem to be a clear path out."
That sentiment was echoed by other business leaders, who are watching with dismay as a narrowly-divided Congress stumbles its way toward the September 30 deadline to fund the government.
"Nobody wins in a government shutdown," said one executive at a business group who requested anonymity to speak candidly. "We've always asked the administration and regulatory agencies for a degree of certainty and predictability. But there's nothing less certain than a government shutdown."
The executive said his members are watching the situation play out "with a bit of an eyeroll, thinking: 'There goes Washington again.'" But he added: "This one feels a little bit different. It's harder to understand what the final deal looks like. It feels like it could go on for a while."
In a phone interview with CNN, Cisco CEO Chuck Robbins said a brief shutdown will mostly have an "emotional and psychological impact."
"But if it's an elongated shutdown, that's going to have a negative impact," said Robbins, who is set to become chair of the influential Business Roundtable in January.
'It's not good for business'
A shutdown may not be an especially dramatic event for the stock market or deal a sizable blow to GDP.
And yet CEOs despise the policy chaos that would undoubtedly accompany a shutdown. It would cut off funding for government contractors, cast doubt on the timing of regulatory action and delay key functions like permitting, passports and hiring of air traffic controllers.
That's on top of the countless federal workers who would get furloughed, meaning they would neither work nor get paid. Other federal employees, deemed "essential," would need to work unpaid.
"We don't want the unpredictability that comes from a shutdown. It's not good for business -- or consumer confidence," another trade group executive told CNN.
And some industries could feel the impact more directly, including travel.
A government shutdown would cost the US travel economy as much as $140 million a day, according to an analysis released this week by the US Travel Association. The trade group pointed to a survey finding that six in 10 Americans would cancel or avoid trips by air in the event of a shutdown.
"This completely avoidable situation threatens livelihoods and jobs across the US economy," US Travel Association CEO Geoff Freeman said in a statement. "Ultimately, travelers, businesses and workers will pay the price if lawmakers fail to enact a stop-gap funding bill."
At the same time, a government shutdown would leave investors, economists and, most importantly, policymakers at the Federal Reserve flying blind, at least somewhat. The Bureau of Labor Statistics has said a shutdown would delay the release of crucial data on inflation and unemployment. That would force Fed officials to make major decisions on interest rates by relying on private data.
Frustration with Republicans
Publicly, business groups are urging Republicans and Democrats to come together to keep the government open.
Privately, there is growing frustration at Republicans as in-fighting within the House GOP spills out into the open.
"This is an issue that rests very much with the House GOP," one of the trade group executives said.
There is also a sense that voters could blame Republicans for the mess.
Asked what his message is to Republicans, Bradley, the Chamber executive, said it's "no different" than that of Senate Minority Leader Mitch McConnell, who earlier this week warned shutdowns have "always been a loser for Republicans politically."
"Using a shutdown as a point of leverage has never worked historically," Bradley said. "There tends to be significant residual damage for whoever is perceived as instigating the shutdown."
No matter who is blamed, some CEOs are frustrated with the polarizing environment in general.
"The inability to get anything done in Washington is having lots of negative implications," said Robbins, the Cisco CEO. "It's just irresponsible not to have a budget. We let politics get in the way of doing the core job, which is running the government and working for the people. It's unfortunate."
Markets usually don't care
Wall Street is not overly worried about the potential damage to the economy at large nor the stock market.
During the last shutdown, the record-long impasse that began in late 2018, stocks didn't just survive. They boomed. The S&P 500 surged 10.3% over the course of that 35-day shutdown.
History shows the stock market has been flat on average during the 20 government shutdowns since 1976, according to Keith Lerner, chief market strategist at Truist Advisory Services. During half of those shutdowns, the stock market posted positive returns.
That "meh" attitude from investors makes some sense: Unlike a potentially catastrophic debt default, a government shutdown would likely not deal a major hit to the national economy.
Goldman Sachs recently told clients that the economic impact from a government shutdown would be "manageable," shrinking gross domestic product growth by about 0.2 percentage points per week. GDP growth would then recover by the same amount in the following quarter.
From fishermen to passports
However, the Chamber of Commerce warned members in a memo this week that there would be significant micro disruptions, with everything from passports and permits to clinical trials and contractors getting caught in the middle.
"You're measuring the wrong thing," Bradley said in reference to the GDP estimates highlighted by Goldman Sachs. "Those of us who have been around government shutdowns in the past know there are real-world negative consequences."
Bradley noted that during the last shutdown, there were commercial fisherman who couldn't get certificates for boats to go out and catch fish during the season and there were tourists who couldn't visit national parks and monuments.
"Those are things that are time dependent and that you never get back," he said.