Tag Archives: shutdown

Tyranny of the Majority

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AUSTIN, Texas — House Speaker Dade Phelan late Tuesday signed 52 arrest warrants for Democrats who left the state for Washington D.C. in July and have yet to return to the House chamber for the second special legislative session of the year. (Yahoo News)

American political discourse is supposed to be about compromise, give and take, and a collegial spirit of doing what is best for the electorate.

On January 6, 2020, this went out the window, and as we have seen since, it continues to fall by the wayside.

In the latest bout of my way or the highway which has seen disgruntled GOP (and former) GOP lead states strip away powers from their Governor when they lost control (Wisconsinand North Carolina), or when they disagree with the Governor (Michigan, Minnesota, Kentucky) and other elected officials (Arizona).

Now Texas issues arrest warrants for the minority power (Democrats) who refuse to vote for what is clearly voter suppression laws. Their option, knowing they do not have the votes to override what is clearly a regressive bill, is to ensure quorum cannot be achieved and left the state.

State Rep. Lyle Larson, R-San Antonio highlighted the issue clearly:

Have we got to the point where we believe our own bull shizz so much that we arrest our own colleagues. Civil discourse took a nasty turn today.

Civil discourse is no longer civil. And what is happening in Texas around voting rights is the same level of GOP crap that we have seen in Georgia, and other Republican strongholds where following four years of mismanagement at 1600 Pennsylvania Avenue, the American public said enough is enough. And those voices were loudest in the parts of the country where the GOP is now moving beyond gerrymandering and moving to outright vote restriction so this sort of radical politics never happens again.

Welcome to the new normal.

The Realities of Contract Work

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About three months after the longest government shutdown in history came to an end, leaders of companies and unions representing federal contract workers are speaking out, asking for legislative changes to ensure that their employees are guaranteed back pay if another shutdown occurs. WTOP

The latest Federal Government shutdown lasted thirty-five days and affected eight hundred thousand contractors, everyone from the men and women that empty the trash, to the men and women that write the software that fly the unmanned aircraft used by the military.

I ask that we work together to find a way to enact legislation that will treat the contractor workforce just as their federal workforce counterparts are treated —Leidos CEO Roger Krone.

Mr. Krone’s supposed concern for his employees notwithstanding, this is about the money Leidos and other federal contractors lost during the shutdown. Let me explain how it works. A contractor is a body with a value attached to it. That value is a combination of their salary, their benefits, and a number of other factors at play within the company that is loaning their services to the Federal Government. What is called the loaded rate. That loaded rate would astound you (or perhaps not - that $10,000 toilet seat. That was as much the cost of labour as the cost of materials). If I am employed at an annual salary of $130,000, I would be making about $60/hour. Now, we add to that the overhead costs, etc from the company and I am being sold to them at a rate of $120/hr.

This is about the money, and not the money lost by the contractors.

The argument or at least the parallel is that the Federal Employees got their money, the contractors should too. I am of two minds about this. I can see the argument that the Federal workforce was involuntarily furloughed. In labour law, it is slightly different from being laid-off, but the effects are the same. If Ford had furloughed a line, those employees would not be paid for their time off. Similarly, the contractors would not be paid.

Companies are often left with two choices during a shutdown, he said: pay their employees and go out of business, or withhold pay and see their workforce leave them.

He is correct. Contractors actually live on a very small margin with Federal contracts. And they do have a significant risk that their employees will walk out on them if they are not paid. And that is the risk of contracting in general. You take a job with a contractor knowing that at some point your contract will expire. Some companies recognize this, make allowances for it, and protect their employees, to a certain extent, while others are less concerned. In fairness to Leidos, they tend to protect their employees, but they have lost their margin over the thirty-five days, through no fault of their own because the government (the paymaster) was not doing their job.

How this compensation should be addressed is not a simple issue. Being paid to not work is not going to be successful. And 800,000 federal contractors did not work for thirty-five days. Unlike Federal Employees, contractors had the option of looking for work or taking unemployment, or annual training or leave. I am not sure contractors should expect back pay. But as a former Federal contractor, I can feel their pain. There is no easy solution.

A Legitimate Reason?

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OPM: Unpaid essential personnel must show up or risk AWOL status | WTOP

If an employee has a legitimate reason for the absence, the agency could place the person on furlough, but AWOL employees can face appropriate consequences based on the discretion of the agency.

Gee, what could a federal employee use as a legitimate reason for not reporting to work, when they are being ordered to report and not actually getting paid for coming to work. Hm, let me think, let me think. Oh, I know! How about Amendment 13, Section 1 of the United States Constitution?

1. Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction.

I guess being essential, working without pay, for the United States Government, in the event of a shutdown is…punishment for a crime?

Failing that, not being able to pay for gas, or transit is also something I would accept. After all, many TSA worksites are not exactly conveniently located to public transit.

The Party of No

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House passes bill that would end shutdown, but Senate unlikely to take up

By a vote of 240-188 along mostly partisan lines, the House passed the bill and sent it to the Republican-controlled Senate as part of Democrats' latest strategy to end partial government shutdowns at many federal agencies that began on Dec. 22. Senate Majority Leader Mitch McConnell has not indicated a willingness to bring the bill up for a vote.

For the last two years, the House, Senate, and Executive have been controlled by the Republicans. For the past two years, the party of No has had control of all aspects of the government. During that time, they have not passed any significant bills related to border security. Now, suddenly, at the eleventh hour, the party of No suddenly needs to pass a bill containing $5bn for a wall. It no longer matters what this wall is made of anymore. $5bn is just the entry, like a gateway drug. And this is such an important issue, that the party of No has decided to shut down the government and not reopen it.

Let me be clear. The bills that are being passed are identical to the proposals the Republican-controlled Senate passed which did not have the $5bn in it anyway. Now, suddenly, the House bills are not good enough, and the Party of No in the Senate is refusing to bring them to the floor. Why?

The answer is pretty simple. The Republican-controlled Senate is afraid that if they bring these bills to the floor, the Senate will pass them, at a veto-proof level, and Majority Leader McConnell will look like an ass. This is now beyond the temper tantrums the President is throwing. This is a full-blown ass-covering exercise. And 800,000 federal workers are being held over a barrel because of it.

What a Government Shutdown Really Means

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Spoiler: It does not mean politicians feel any pain.

If you have not met a Federal employee or contractor, or live more than a short drive from the Beltway (what we call the I-495/95 asphalt loop that circles DC), it is understandable that you have a rose coloured glasses opinion about what a government shutdown (even a partial shutdown) means. So, to help you understand the impacts on ordinary people, let me explain it to you.

This current shutdown is a partial shutdown. What does that mean? In this case, it means that only a small number of agencies are affected — specifically, the Department of Homeland (In)security, Justice, EPA, Interior, Agriculture, Commerce, HUD, and a handful of others. Agencies, including the Department of Defense, Veterans Affairs, and Health and Human Services, to name a few are not impacted because their budget was approved after the earlier shutdown this year (yes, that’s right, this is the second shutdown in 2018, now rolling into 2019). I will not discuss the political hand-waving being done, but that does not mean this had to happen. Instead, let us look at the impact.

Personnel

It is estimated that this shutdown will impact some 800,000 people. That is 800,000 full-time Federal employees, and contractors. Let’s put this in perspective, shall we?

In November, General Motors announced it was laying off 14,000 employees. Wells Fargo quietly laid off 26,000, and Verizon is dumping some 10,000 employees. The layoffs in the Auto Industry caused a great hue and cry, but the other layoffs barely caused a ripple, in the press. Everyone agrees, however, that those numbers are significant numbers to be laid off in an economy that is growing. That is less than 10% of the total workforce that has been idled by the Federal Government. The official term is furloughed, and it is important to remember that the Federal Workforce has not been laid off (the same cannot be said for the contractors).

So why the difference in wording. Because being a Federal Employee comes with many benefits, and those benefits, come with a couple of significant catches. As a Federal Employee, you get at least nine days off a year (you know, all those Federal Holidays that none of the rest of us generally get). They get discounts at hotels, transit benefits, and a generally stable pay structure. In exchange, they cannot do certain things that the average employee can (look up Hatch Act for example), but it also means they cannot legally hold a second job. Which means, that if they are furloughed they cannot apply for unemployment insurance (since they are still technically employed), they cannot go and get a part-time job to carry them over until they are paid again, and best of all, if they are deemed essential they have to continue to work without the benefits of pay.

Federal employees will, eventually, get their pay. The bill has already been passed to pay them once the budgets are allocated, but until the money is available, they cannot be paid, even if they are required to stay at their posts. So be kind to that TSA employee. He may not be making much money, but at the moment, he is working and not being paid.

I mentioned that contractors are a particular case. Most contractors, assigned to work for agencies that are shut down, are not being paid, because their companies are not being paid. Moreover, since they are not working, they cannot receive pay for that time. They are, in all reality, laid off. Some of the larger contractors will carry these employees over. Either by forcing them to take paid time off, or send them off to training, but even that will not be a long-term fix. If their agency is not funded in a short period of time, usually two weeks in my experience, they will be out of work. Let me repeat this. Federal contractors, who work for agencies that are close, will be out of work if this is not resolved quickly. How many people are we talking about? As many as 10% in some agencies, considerably higher in other agencies. So those layoffs at GM and Wells Fargo are comparable to the layoffs that are happening in the Federal sector over the Christmas break.

Economics

The Government is closed. Look at all the money the Fed is saving. Again, this is not entirely accurate. The people that are full-time employees are, in fact, going to be paid. So there are no payroll cost savings.

Further, the lights, heat, and phones are still being utilized, even at a minimum extent (although if you notice, many of the Federal websites are still online) so those bills will have to be paid to the local utilities, eventually. But so do the mortgage, utilities, and other bills for the 800,000 employees who are not receiving a paycheque. These 800,000 people still have to feed their families, put gas in their cars, put clothes on their bodies — all without a paycheque. The gas company continues to send gas to their houses on the assumption the bill will be paid. Remember that many of these employees are not being paid a great deal of money. You can look up exactly how much they are being paid online. Also, like most Americans, living paycheque to paycheque is the norm. So missing even one paycheque is economically risky.

However, there are other impacts, some of which are invisible. Some of which are quite visible.

Because an agency is shuttered, it means that no one is eating Enzo’s Lunch Special at the local deli. Most of these restaurants barely survive with the local trade. Take it away for a day, a week, a month, and suddenly Enzo’s deli is no longer there. Car repairs are put on hold. Home upgrades. Tuition. The impacts are a real example of how trickledown economics really works. One domino falls, and it might not cause a cascade. Several falling and the cascade may be unstoppable. Eight hundred thousand people represent a lot of falling dominos and a lot of small to medium businesses being impacted.

So if you think that is not that big a deal, then think about this. The Federal Government is not paying its bills. At least those agencies that are closed are not paying their bills. The largest business in the United States is not paying its bills. However, companies have started doing work on the assumption that they will be paid. Uniforms are being made; servers are boxed, boots are ordered. Dell might be able to absorb a week or two shutdown and not have it negatively affect their bottom line, or their stock price, but other companies have already announced or will be announcing the hit in the fourth quarter or the first quarter of 2019. If this shutdown goes more than two weeks, expect those impacts to begin to show on the markets. If they have not shown up already in the significant downturn just after the shutdown was announced.

Access

A commenter on a site posted: I just went to my local National Park. The gates were up. You don’t need park rangers to allow you access to our national resource.

All well and good. The National Park Service, part of Interior, is unfunded and many of the Rangers are not patrolling the parks. Some parks are open, unattended; others are closed. However, Rangers and other park workers are not there to just collect the entrance fee (which is trivial). They are there to keep bad things from happening to the natural resource: no Rangers, no fire watch. No fire watch, well, we could lose acres to wildfires. No Rangers, no one stopping poachers, or others doing bad things on Federal land. No Rangers, or even park workers, no one to clean up the trails when the trees fall or rebuild bridges, or come and get you if you get into trouble. Think about that before you go out.

In DC, more visible than anywhere else, many tourists have discovered what the shutdown means in person. The Smithsonian museums are closed. Many tried to stay open until at least New Years, but come January 1, they all closed. Moreover, this is impacting many people and their plans.

As I mentioned, most of the government websites are still operational, although many have banners saying they are unattended. Got a question about your Known Traveller status? It’s going to have to wait. How about that citizenship application? Sorry, not today. Import license that is critical for making that end of month deadline? Hope you have alternate plans. Anything that is not automated is not being processed. So even if it is automated, if there is a piece of paper required, it will not be sent out.

A Shutdown is Expensive

If I have not convinced you that a shutdown is impactful, and more than just a political stunt, let me share some additional numbers.

The 2013 shutdown estimated a one-week shutdown would likely decrease fourth quarter annualized growth by 0.1-0.2 percentage points. Politico posits that the cost of the current shutdown could cost millions of dollars a day.

Quantifying the exact cost to the government is difficult, in part because every shutdown is different. Between November 1995 and January 1996, the government shut down twice for a total of 27 days as Democrats and Republicans clashed over Medicare funding, among other issues. A subsequent analysis conducted by the White House’s Office of Management and Budget estimated that both shutdowns together cost the government $1.4 billion—more than $2 billion today after adjusting for inflation.

That is not an insignificant cost. So that money is in addition to the funds that must be allocated to keep things open and running.

So if like many, you are shrugging your shoulders over the shutdown, I hope I have convinced you that, despite your political leanings, a shutdown is just brinksmanship. It has no positive outcome. Moreover, for many, the hand they have been dealt is not a winner.

Catch 22 Is Only The Start

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An unfunded, unopened government sure is expensive

One email came to a friend from a contractor employee in Loveland, Colorado, who operates a large federal data center. The employee said the agency wants the servers turned off to avoid overheating. How’s that? The agency believes it can’t pay the electric utility so the cooling equipment, and hence the servers, will have to be shut off.

Trouble is, with the agency closed no federal employees can go on site. So the contractors can’t go in and do the power-down.

If you are scratching your head, let me put it this way, the contractors cannot be paid. The agencies do not really know what they can and cannot do. And so services may or may not be available when you need them.

Good luck, and ...