24 September 2023 , 22:14
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Congress looks to face shutdown after House Republicans were unable to reach a compromise over a budget, potentially leaving millions without pay.
Without action from Congress, 4 million employees will be left unpaid after September, 30. One police officer from Kansas does not have room for a missing paycheck in his budget. This news comes after many households began to struggle with persistent inflation and the end of Covid-era benefits such as the child tax credit, rental assistance, and the pause on student loan payments, which are now set to resume in October.
If the potential shutdown lasted until December, it could tip the US into a recession, said Mark Zandi, chief economist at Moody’s Analytics. He added: “A couple weeks, no big deal. A month, then it starts showing up with the economic data. Longer than that, it becomes a real problem and if it’s for the entire quarter, buckle in, it probably means a recession.”
Many households have begun to struggle with persistent inflation and the end of Covid-era benefits (Getty Images/Gallo Images)Stephen Booth, a police officer with six kids under the age of 15 to support, is a veteran with almost two decades of experience. Now he has to start to think of ways to get by without pay, like feeding his family with the meat he can get from hunting, eggs from his chickens, and the money he makes driving on the side for Uber.
Booth, who is also is also a local liaison for the American Federation of Government Employees, a union representing federal workers, told NBC : “The politicians aren’t thinking about us down here on the ground floor doing the work. Some of us live paycheck to paycheck. You take away a paycheck, how am I going to live for the next two weeks? How can I take care of my kids? How am I going to take care of my wife? And that type of mindset ends up causing bad things to go through some people’s minds and some people can’t get through it.”
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Amad Ali is a claims specialist with the Amad Social Security Administration and president of his local AFGE union. He said: “It’s really rice and beans time. Most of us are dedicated civil servants and we keep on doing it, we keep on pushing forward, but it’s tough.”Ali, said he’s learned to prepare for the possibility of going weeks without pay.
Workers have received back pay once the funding bill passed in previous shutdowns, but it is the period without the pay that has caused issues for so many households. Ali added: “I talk with a lot of our employees, and they are living paycheck to paycheck, so not getting a paycheck is going to result in some very hard times for folks.”
Despite unemployment still historically low, economists said a government shutdown combined with an expanding UAW strike and rising inflation and interest rates could spell doom for the wider US economy.
Megan Way, an associate professor of economics at Babson College in Massachusetts said: “Any one of these things is not the thing that would tip you into recession, in my opinion, but put them all together, and it’s going to tax the economy, and it’s going to tax, specifically, those small businesses and families that are still recovering. It feels like rubbing salt in the wound right now because there’s so many families that are still getting on their feet from the pandemic.”
As a single mom of four, Jessica LaPointe, works as a claims specialist for the Social Security Administration has said she will have to rely on help from friends to get through the period. She added: “I’m definitely in a position where I do not have a lot of savings. As a single mother, I’m mostly living paycheck to paycheck, so I’m just going to have to rely on the resources that are available to me, the support of family and potentially friends,” said LaPointe, who is also her local union council president. “Knowing that I’ll get paid eventually is good. There is a light there so it’s just making it through in the short term. But the uncertainty is a concern.”
While Washington has been through shutdowns before, this one could have a significantly bigger impact because it will involve far more workers than the last shutdown , said Max Stier, head of the nonprofit Partnership for Public Service. Congress hasn’t approved funding for any parts of the government nor has it passed legislation to continue paying members of the military.