Now that a partial shutdown of the federal government is underway, will you get paid?
It depends. More than 800,000 federal employees will be furloughed. These employees may eventually get paid, as was done in the last major shutdown in 1996, but that is not certain. Legislation has been introduced to pay employees after the shutdown is over but there is no certainty that will become law. Employees who are still working will be paid. For the hundreds of thousands of other federal employees, that is not a certainty.
About 1.4 million active-duty military personnel, some reservists and about 1.3 million civilian federal workers will still report to work and will get paid. If the shutdown continues for a week or two though, their pay could be delayed. They would probably be paid a few days after the government reopens but, the way the federal system works, that must happen about four days before their next scheduled pay day for the payroll system to issue their checks at the usual time.
The Past Is Not Always a Prologue
Some readers have been sanguine about the furlough and their finances. Comments along the lines of “I can use a paid vacation; bring it on” or “This worked out well in the 1990’s; I got a paid vacation” are not uncommon. The shutdown from the 1990’s may not lead to a similar result in 2013. There are many differences between the current stalemate and the one that primarily featured President Bill Clinton and House Speaker Newt Gingrich. On a personal level, those of us who were impacted by the shutdown at that time sometimes got the impression that Clinton and Gingrich had a modicum of mutual respect and communicated their ideas effectively. While they had significant political differences and a different approach to government, they worked together. Also, at that time, unlike today, the economy was strong and we did not have a $17 trillion national debt to work around.
Mutual respect is lacking among those currently in power. Republicans have the impression that President Obama pays lip service to Congress but does not seriously want to work with Republicans and lacks respect for the legislative branch, particularly the House of Representatives. Republican leaders addressing issues involving the president display an attitude indicating a lack of respect or admiration about the president’s ability to govern effectively. President Obama and Democratic leaders routinely make comments to the press that go beyond taking issue with political positions and, instead, personally attack the opposition. The airwaves are filled with verbal bombs in speeches from both parties, accusations are flying from all sides, and attacks are designed to score political points and obtain a higher rating in national polls for their position rather than reaching a political settlement.
Political Animosity and Image of the Federal Workforce
Whether one agrees with this assessment or not, there is no doubt there is a high level of mutual animosity. As noted in a National Journal article recently, politics in the United States have reached a level not seen since the Civil War. With comparisons being made in public by elected officials to the Civil War and Nazi Germany, there is little doubt that the political atmosphere is poisonous.
Federal employees have usually had a positive image. They have been seen as being apart from the political fray for many decades after the elimination of the spoils system, legislation was passed to create a professional cadre of federal workers, and the Hatch Act to remove federal employees from becoming involved in politics because of the demonstrated problems with mixing federal workers and politics. A professional cadre of workers that is above the political fray is certainly preferable for the good of the country and for federal workers. When seen as being outside the political dispute and, instead, viewed as competent, hard working people providing services to the American public, there is a well of good will that can be drawn upon to ensure that these federal workers are not personally harmed by a political dispute.
At least among the political class, federal employees are no longer seen as being above the political fray—certainly that is the case for many Republicans. Federal employee unions are now seen as politically active, largely in support of one political party. They normally support Democrats in many election campaigns. In return, the Democrats provide benefits to the unions by generally increasing their bargaining power in various ways and by giving them more access to top level officials. Once in office, they are also able to assist unions in gaining more power by making political appointments with individuals from a union background that work to increase the bargaining power through their decisions issued by the relevant federal agencies.
Numerous attempts have been made to cut federal pay or benefits in the past few years including changing federal retirement calculations from a “high three” to a “high five”. There are also attempts to reduce or eliminate benefits for federal employee unions. Most have not been successful but the lingering multi-year pay freeze brings the point home that pay and benefits are no longer immune from political disputes.
No one can predict with certainty how the current stalemate will be resolved. We do know it will come to an end, we just do not know how the settlement will be structured.
We noted some time ago we were approaching a “perfect storm” for federal pay and benefits. The issue of back pay for federal employees who are furloughed may be one of the issues that will eventually be discussed to resolve the current stalemate. While there is a chance that all employees will be fully reimbursed for time lost due to the furlough, assuming that outcome is a certainty could be harmful to your financial future. It may be time to take a close look at your personal finances and plan on a financial drought for a few weeks. If you do that, and the shutdown is resolved quickly and provides for back pay, you will not be hurt as much as those who were not more careful about making their financial decisions.