The main difference between a contract for employment with a private company and a contract for employment with the Federal government as it pertains to this situation is Article I, section 9 of the Constitution, which reads: “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law.”
The main effect here is that for the Federal government, a contractual obligation to an employee (or a contract for services, goods, etc) cannot override the Constitution – BUT… the constitutional provision allows for Congress to write laws that provide “permanent and indefinite” authority for the Government to address various funding matters in case of a shutdown.
So as others have accurately described, exceptions exist to avoid a total and catastrophic shutdown. One key law, which doesn’t actually apply in this situation but illustrates the law in play here, is the Feed and Forage Act. It is a permanent authority that allows the Government to sustain members of the military during periods where funding is unavailable. Therefore, troops shall continue to work during a shutdown, and the Feed and Forage Act complies with Art I sec 9 as a law allowing them to earn pay even if there are no appropriations available for that purpose.
Otherwise, in absence of such a law and similar laws, the constitutional presumption is that if no appropriations are available, the Government cannot make obligations that bind itself to future payment, because Congress has not approved the use of funds for such purposes.
It may also help to explain two critical parts of fiscal law: an obligation and an expenditure. An obligation is a contractual duty that the Government signs up to for payment of something, typically at a future date. An expenditure is the action of money leaving the Treasury to fulfill an obligation. So in other words, I sign a contract with you for me to buy an F-35 (an obligation) and as soon as you deliver it I give you the money I promised (the expenditure). Appropriations are actually the legal authority for the Government to make obligations, as opposed to the legal authority to make expenditures under obligations.
This is why employees are subject to furlough: the Government agreed to pay them a certain amount for their work. The unavailability of funds during a shutdown doesn’t simply mean that the Government is prohibited from making expenditures for their paychecks: it means the Government is prohibited from letting them do work that with essentially indebt the Government to the employee; in other words, the Government can’t make the obligation or the expenditure.
Those federal employees, whether staying home or working without pay, still have bills to pay. Their landlords, lenders, utilities, and so on don’t want to wait until after the shutdown to get paid. Employees are having to borrow money just to make ends meet. Local food banks, already straining to meet the need, are now seeing unpaid federal workers in their help lines.
Well if they have a conventional mortgage or car loan with national bank, most likely they are being afforded the opportunity to defer their payments until the shutdown is over. Every bank website I’ve seen has had a notice to customers that are impacted by the government shutdown can call their client assistance program.
I also saw several reputable financial institutions offering (not extreme payday loan scenarios) low interest type loans with their most recent government paystub, that are not due until they receive their back pay.
Whether a single individual can is pretty much irrelevant. The median amount in an American’s savings account is $4,500, so assuming that a government employee makes roughly the same financial decisions as the average American, quite a few people will be in trouble.
I overheard some security guards talking just before the shutdown about how they were starting to charge everything on their credit cards, instead of using debit cards or cash. “You can’t pay rent with a credit card!” said one. I hope that’s working out for them…
That was from a few years ago, but I doubt your “assuming that a government employee makes roughly the same financial decisions as the average American” is a valid assumption.
That’s from the Huffpost and is doubtful at best and dreadfully biased. :dubious:
More or less, in the same jobs, Feds are paid less, but it’s made back by good benefits and job security. It’s just that there arent many Part time minimum wage job in Government, thus over all, comparing all employees, the feds get more. Sure. Or if you compared FT workers with PT workers- not surprisingly, FT workers earn more.
Federal employee salaries on average lag behind those of similar private-sector workers by just under 32 percent, a pay advisory council has said, while also deciding to reassess how it annually reaches similar conclusions, which are at odds with the findings of other pay comparisons.
When I was working, I probably could have gone without a paycheck for two months. That was because I had been fortunate and somewhat smart. We had decided not to have children, which saved a lot of money. My investments had done well, so I had a cushion to fall back on. I had a good-paying job, and I live in a city with a low cost of living. If I lived in the DC area, it would have been a lot harder to get by. The house I live in now would have easily sold for 3 times as much if it were within a commute of DC.
I’d be surprised if there were many surveys specifically of federal employees along the lines of “how much do you have in your savings account”. My post was merely a caution about making assumptions along the lines of:
“Group A has a median income of X. Group B has a median income of Y. Group A and B probably have similar median balances in their savings account.”
I can spot the flaw in that reasoning even if I don’t know the balance of the median federal employee’s savings account.
If we know that nearly 80% of Americans live paycheck-to-paycheck it is safe to assume that federal workers are not different from other workers and probably figure into that 80% the same as non-federal workers.
Unless you can show that federal workers are substantially different from non-federal workers in some respect that bears on this.