Impact of the US Government Shutdown on Federal Workers
The ongoing US government shutdown, now in its second week, is beginning to affect federal workers as they struggle to make ends meet. Hundreds of thousands of federal employees have been furloughed since the shutdown began on October 1, while others, deemed essential, are required to report for work without receiving a paycheck.
A long-serving US Air Force employee shared his concerns with AFP, stating, “We kind of feel like we’re like a bargaining chip to an extent. We’re not getting paid because people in DC who are getting paid can’t get on the same page.” He added that the situation is affecting troop morale, as civilian teammates have gone home on furlough, leaving essential personnel to handle more responsibilities without pay.
The first significant impact will come next week when federal workers start seeing their paychecks affected. If no deal is reached by the end of the month, they will receive nothing in their next paycheck.
Marilyn Richards, a 46-year-old Air Force and Navy veteran from Missouri, has been furloughed from her job as an administrative support worker at a federal agency. As the main breadwinner in her household, she expressed concern about how the shutdown could affect her finances. “For most of us who live paycheck to paycheck, you’re counting on your next paycheck to continue to keep the lights on,” she said.
Bridging the Gap
The uncertainty caused by the shutdown is pushing some federal employees to use paycheck protection programs offered by credit unions across the country. The Navy Federal Credit Union, which helped around 19,000 people with loans totaling more than $50 million during the last shutdown in 2018-2019, has already seen applications for its program this time around.
These loans are designed to help federal workers manage a few weeks without pay and “bridge the gap” until the shutdown ends and they receive their back pay, according to Haleigh Laverty, a spokesperson for the Defense Credit Union Council. Many credit unions are offering short-term, interest-free loans of a few thousand dollars for between 90 days and six months, helping to protect consumers and their credit scores during the shutdown.
Cobalt Credit Union, which serves around 120,000 members with ties to Nebraska’s Offutt Air Force Base, has also received several applications for new loans since October 1. The credit union helped thousands of its members through the last shutdown and is prepared to assist again.
Mortgage Challenges?
While federal workers are the most affected by the shutdown, many in the private sector could also soon feel its effects, according to mortgage brokers who spoke to AFP. The biggest impact on the mortgage market is likely to be a slowdown in the lending process, said Alex St Pierre, a Charleston, South Carolina-based broker.
Flood insurance, which is vital in some coastal areas of the United States, is also likely to be affected, as many state-run lenders are currently shuttered. This could push borrowers to look at more expensive options in the private sector, he told AFP.
Government workers looking for a mortgage face additional pressures, including the very real threat of dismissal by the Trump administration and delays to identity verification checks while their departments are closed. These challenges add to the stress of an already uncertain situation for many federal employees.
