420,000 employees will go without pay if government shuts down

By Rachel Layne

/ MoneyWatch

Will government shut down over border wall?

The Washington brinkmanship that threatens to shut part of the U.S. government at midnight could have major political repercussions for President Donald Trump and for Congress. But the most immediate impact would be felt by the vast numbers of workers who would have to do without a paycheck until the impasse ends.

More than 420,000 federal employees would have to work without pay, according to a report from the Senate Appropriations Committee. An additional 380,000 would be furloughed — meaning sent home without pay — the committee estimates.

The financial toll could be heavy if the closure lasted a "very long time," as Mr. Trump has threatened. The longest government shutdown occurred during President Bill Clinton's time in office, also over the holidays, and continued for 21 days.

Shutdowns since then have been much shorter. But it's hardly a vacation for employees. If a shutdown happens, affected federal workers won't be paid for the week of Dec. 23 through Jan. 5 "until the lapse in appropriations has ended," according to instructions for federal employees issued Friday by the Office of Management and Budget.

Traditionally, Congress has restored back pay for disputes during government shutdowns.

Won't hurt a bit?

As the clock ticks down to avoid a shutdown, some lawmakers say the risk to federal workers is overblown. Rep. Scott Perry, R.-Pennsylvania, told Politico that furloughs have no impact because employees typically get back pay when Congress reaches an agreement and government re-opens.

"Who's living that they're not going to make it to the next paycheck?" he asked reporter Sarah Ferris, according to a tweet.

Tonight, I asked Scott Perry (R-Pa.) about effect of fed employees being furloughed. He argued it had no real impact since employees eventually get paid back.

"Who’s living that they’re not going to make it to the next paycheck?"

— Sarah Ferris (@sarahnferris) December 21, 2018

Labor leaders disagree. A shutdown is "personally concerning this time of year for employees as they begin to travel to celebrate holidays with family and friends," wrote Anthony M. Reardon, head of the National Treasury Employees Union, in a letter to Congressional leaders this week.

A shutdown complicates work for agencies like the IRS ahead of tax season, as well as Customs and the Border Patrol amid trade and immigration issues, Reardon added.

Employees are also concerned about a potential pay freeze given Mr. Trump's fiscal 2019 budget proposal.

"The impending shutdown could be devastating for the men and women who keep our federal buildings safe and clean," Jaime Contreras, vice president of the Washington, D.C.-area SEIU chapter, said as part of a statement issued by several unions this week.

Economy unlikely to flinch

Spending on mandatory programs including such as Social Security would continue if the government partially closes, while the U.S. would keep making government debt payments. But a longer shutdown would need to be evaluated sector-by-sector to see if it's hurting the nation's finances, said William Foster, senior credit officer for debt rating company Moody's Investors Service.

Senate expected to reject bill with $5 billion in border wall funding

The shutdown is unlikely to do much damage to the overall economy, analysts from Height Capital said in a note to clients. But for investors it could stoke "fears that government dysfunction will exacerbate the impact of trade disputes and other instability," adding to the worries that are already torpedoing financial markets.

First published on December 21, 2018

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