Financial shock for furloughed workers about to get worse

The government shutdown faces mounting lawsuits, including over ‘involuntary servitude’ from CNBC.

via CNBC:

  • If the partial government shutdown continues through this week – and there is no end in sight – Friday will mark the second paycheck missed by affected federal workers, whose household budgets have been completely upended.
  • An estimated 800,000 government employees have been caught in the political crossfire of the shutdown, now in its fifth week.
  • President Donald Trump’s proposal to reopen the government, which outraged immigration hard-liners on the right and was instantly rejected by Democrats, is headed for a vote this week in the Senate, where it will probably fail.

The financial shock is about to get much worse for government employees sidelined by the budget stalemate in Washington.

If the partial government shutdown continues through this week – and there is no end in sight – Friday will mark the second paycheck missed by affected federal workers, whose household budgets have been completely upended.

An estimated 800,000 government employees have been caught in the political crossfire of the shutdown, now in its fifth week. Roughly 380,000 federal workers have been furloughed and 420,000 are working without pay.

The impact of the government shutdown on the overall U.S. economy, so far, has been limited. Yet, just as the economic impact is concentrated on furloughed workers, some companies and industries are taking a bigger hit than others. Commercial airlines, for example, are facing slower demand as airports struggle with understaffed security checkpoints, are losing revenue. Last week, Delta said it had lost $25 million in revenue on account of the shutdown.

The hit to the overall gross domestic product in the first quarter is also difficult to quantify. Economists have come up with a range of numbers, but they agree that the longer the shutdown goes on, the wider the damage to economic growth.

There was little indication Tuesday that the standoff would end anytime soon. President Donald Trump’s proposal to reopen the government, which outraged immigration hard-liners on the right and was instantly rejected by Democrats, is headed for a vote this week in the Senate, where it will probably fail.

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