Day 35 of the Trump Shutdown: Let them eat loans


January 25, 2019

Today is Day 35 – hopefully and reportedly, the last day of the Trump Shutdown. Hundreds of thousands of furloughed federal workers (as well as those working without pay) are missing their second consecutive pay check – although we are certainly thankful that they will receive help soon in the form of retroactive pay.

Still: these welcome developments come just one day after both U.S. Secretary of Commerce Wilbur Ross and President Trump himself demonstrated that they are tone deaf when it comes to the suffering of these federal workers.

On Thursday, social media lit up after this exchange with Ross, whose net worth is estimated at $700 million, on CNBC:

CNBC reporter: “There are reports that some federal workers are going to homeless shelters to get food.”

Secretary Ross: “Well, I know they are and I don’t really understand why. Because as I mentioned before, the obligations that they would undertake, say borrowing from a bank or a credit union, are, in effect, federally guaranteed. So the 30 days of pay that some people would be out, there’s no real reason why they shouldn’t be able to get a loan against it. And we’ve seen a number of ads from financial institutions doing that.”

The Washington Post was quick to point out that the Commerce Department’s own federal credit union – which presumably falls under Ross’s portfolio – is charging furloughed employees almost 9 percent interest on emergency loans to cover their missing pay checks. (Update: After the Post story broke, the credit union added a note to the front page of its web site stating that, “If you have a furlough loan or will be applying for one from us we will not charge you interest during the government shutdown and you will not have to begin paying back the loan until the shutdown is over.” (Emphasis added.)

As the day went on, things just got worse as more cluelessness was revealed.

President Trump, trying to clean up Ross’s comments, suggested that grocery stores and banks will give a break to the 800,000 federal workers who are without pay. He claimed that grocery stores would “work along” with furloughed employees because “they know the people” and have been “dealing with them for years.”

“Local people know who they are, when they go for groceries and everything else,” Trump said of furloughed workers. “And I think what Wilbur was probably trying to say is that they will work along.”

There are so many problems with Trump’s, um, analysis (and Ross’s, for that matter) that one hardly knows where to begin. Many workers lack the collateral or credit rating to obtain a loan. Others will choose, involuntarily, to max out their high-interest credit cards. And advocates fear that some will turn to the pay day lending industry, with its exorbitant and exploitative interest rates.

It is more than clear that the private sector cannot or will not make up the gap that workers face due to their missing paychecks. In some cases, jurisdictions with large numbers of federal workers are trying to help. Maryland and D.C., for example, are waiving transportation costs for essential workers who are required to be on the job but are not receiving pay. D.C., Maryland, and Virginia all are exploring whether they can allow these workers to apply for unemployment insurance (federal guidelines currently say they cannot, but local jurisdictions may have the power to circumvent the guidelines).

And D.C. is exploring steps to protect both unpaid federal workers and contractors from evictions and foreclosures during the shutdown.

Meanwhile, critics immediately responded to Administration’s dismissive tone. U.S. Rep. Jennifer Wexton, a newly elected Democrat whose suburban Virginia congressional district ranks fifth in the U.S. in the number of federal employees who live there, invited Ross to join her at a food bank this weekend to learn more about what furloughed workers are experiencing.

“I think it would be a valuable learning experience for you to see what our federal workforce, including your own employees at the Department of Commerce, are going through,” Wexton wrote in a letter to Ross.