Q&A: What to know about the government shutdown and how to budget

Jan 08, 2019

The Post's personal finance columnist Michelle Singletary and national reporter Eric Yoder are taking your questions about the partial federal government shutdown, which is now in its third week.

Send in your questions about budgeting on a furlough, applying for unemployment and navigating contract work with the federal government.

Read related coverage from The Post: - Everything you need to know about a government shutdown - From Michelle Singletary: Federal workers — in a panic about their pay — apply for unemployment - U.S. towns with federal workers brace for impact as the shutdown continues

Thanks for joining us for a special chat this week on the partial government shutdown.

I'm Michelle Singletary, the personal finance columnist for the Post. I'll be taking your questions about the shutdown. But feel free to ask me anything about your money.

In case you aren't familiar with my work I write the "Color of Money" column, which appears twice a week in the Post. I also have a regular live online chat every Thursday at noon. Additionally, you can subscribe to my weekly newsletters on personal finance and retirement. There's a link on this chat page for you to sign up. 

Thanks for joining us today. 


For many of us U.S. diplomats working overseas, the options under furlough status are not as feasible/available. We can't get another side job easily. We can't apply for unemployment from overseas. Do you have any suggestions? Junior diplomat (with many student loans to pay!) + primary breadwinner + mom of 2 young kids asking...

There are so many pockets of people this shutdown is impacting. I would say pay only what is absolutely necessary. If you don't have enough savings to get your through a month or two, contact your student loan lender and ask for a deferral until you are back in pay status. Do the same with other creditors. Call and let them know you are impacted buy the shutdown and you need to reprieve. The thing is to get ahead of this just in case you end up missing a few paychecks. Don't wait until it's critical.

How is budgeting related to the government shutdown? When each year is Congress supposed to pass a budget?

Hello, this is Eric Yoder, thanks for joining us.

The budget process calls for spending bills called appropriations bills to be enacted before the start of the government's fiscal year each October 1. In practice, that rarely happens on time, although this year five of the 12 of those bills were enacted in September. Those funded many of the largest agencies including Defense, VA, HHS, Energy and Congress itself. The problem has been with the other five. There were several temporary extensions but they finally hit a wall (no pun intended) when the last one expired December 21.

You've published the numbers of federal employees that are impacted by the federal shutdown but I'd like to know what are the numbers of federal contractors that have been furloughed or even let go as a result of the shutdown? Any chance you can help us understand this number? Even if it's just an estimate, it'd be helpful to better understand the full economic impact of this shutdown. Thanks very much for your help with this question. 

Related coverage: Federal workers in Washington aren’t the only ones going without pay

Take a look at this link. It's a great look at the nationwide impact on workers.

Do federal employees who are part of the 800,000 have health insurance coverage after 12/21/2018? Employees cannot pay for their health insurance thru payroll deductions (no check) and is the federal government paying their employers' share of health insurance costs? Thanks so much!

For those who are enrolled in the Federal Employees Health Benefits program, coverage continues when they are in unpaid status and the premiums accumulate. They are then deducted once the person returns to paid status. The same happens with the long term care and vision-dental insurance programs, incidentally, although in those there is a specific provision stating that they will switch to direct billing after several payments have been missed. There's no clarity on what would happen to FEHB if this goes on for a couple more pay periods. One would assume that they would continue to accumulate, but let's hope it doesn't come to that.

I realize that no one truly knows how or when this shutdown will end, but based on your senses when do you think employees can expect to be back at work? Surely “months or years” isn’t realistic (I hope!)...

Read Michelle's column: Federal workers — in a panic about their pay — apply for unemployment

As you know Trump as not been predictable on anything so there is no telling how long this will last. I would say if you are impacted err on the side of caution and cut as much of your expenses as you can. Call your creditors if you don't have enough savings to cover your expenses for the next few paychecks. Because even if the gov't get up and running in the next week or two, it's going to take time to process those paychecks and get them to folks. 

Are all the agencies able to keep sending out payments to retirees?

Payments to retirees are not the responsibility of individual agencies. At retirement, all of that is put in the hands of the Office of Personnel Management. While OPM is itself one of the agencies whose funding lapsed, retirement operations are funded out of a trust fund and thus there are employees still on the job and there is still money available to pay those benefits.

Retiree annuity payments come out around the first business day of the month, so the January payments should all have been distributed by now. Some long-time retirees still get checks but the large majority have direct deposit.

Is it possible to receive both unemployment insurance and back pay? What is the responsibility of the individual who receives their back pay after collecting unemployment?

There are bills in Congress to give folks back pay and in that case yes, people have to pay back the unemployment they collected. How the states get the money back varies but you don't want to end up in a situation with a wage garnishment because of an overpayment. That being said, apply for unemployment now if you know you'll need the money. Then when you get your back pay set aside the funds to repay the state. 

I am about to join the furloughed masses starting on Monday so I'm doing some prep work now. I am preparing to register with various freelancing websites (upwork.com; hireanesquire.com; lawclerk.legal). Do you have any experience with these types of websites or any advice for freelancing generally? (I am working on getting it cleared with my ethics office already.)

You are doing the right thing by checking with the ethics office on this. The Office of Government Ethics has put out a reminder that ethics rules, including conflict of interest statutes and financial reporting requirements, still apply to a furloughed employee.

The catch-22 for many employees in this situation is that the very knowledge that make them marketable to an outside employer is what is most severely restricted by those ethics rules.

I don't have any experience with those particular sites--maybe someone reading this could chime in?

As you know, rent is awfully expensive in DC. Unemployment can help, but would not nearly cover my monthly rent payment. Is there any type of precedent for dealing with landlords in this type of circumstance?

Really you have to call your landlord. There have been several shutdowns in recent years and threats of more. So many landlords know this can happen. Call the rental office and see what they can do. But keep in mind they too have to pay their bills with your rent so there may not be much your landlord can do to give you a reprieve. So if funds are super tight let some other things go so that you can keep a roof over your head and food on the table. It's not ideal and I wish I could offer more but this is what happens when the politicians play with people's pay. 


I admit this question is quite selfish, but is there a point where my status might be in trouble?

The Defense Department is among those agencies that received full-year (that is, fiscal year--through September 30 of this year) funding last fall. So, there is no chance  of DoD or any other funded agency catching the shutdown flu from elsewhere.

There are various credit unions who have decided to help furloughed employees. Usually via low or no interest loans. Do you think this a good idea for furloughed employees? Especially knowing unemployment checks are hardly enough to cover people.

Those who are familiar with my column and my regular Thursday chats know I HATE debt. But there are times when debt may be necessary. This is one of those times. I would rather you take out a 0% or low interest loan than put expenses on a high-interest credit card. Or take a hardship withdrawal from your retirement account.

I'm writing about this for Wednesday's column but Navy Federal and a few other credit unions are offering such loans. In the case of Navy Federal here are the terms:

- 0% percent interest

- No credit check

- No fees 

That's a really good deal. But you have to already be a member who direct deposits your paycheck. And you only have up to 3 business days beyond your pay day to apply for the loan. Depending on your pay the maximum loan would be for $6,000. And you don't get a long float. As soon as you get back pay the loan has to be paid from your paycheck. 

What do you think are the chances that federal employees who are furloughed will eventually receive back-pay? I know that is what usually happens, but I'm worried that this may even become a contentious issue.

It's always happened in the past. I would not want to be Trump or any politician who doesn't vote to give people back pay. After all, the employees didn't walk off their jobs. They were prevented from working. 

Is there any chance that professional services contractors who are not working due to the shutdown would be added to the bill providing back pay to those who are furloughed? Would it help to contact my representatives?

The House voted last week, and will vote again in a separate bill probably tomorrow, to grant back pay to furloughed federal employees. However, that is a bill funding only the government's own workforce.

Del. Norton of the District has introduced a bill aimed at getting government contractors to pay their lower-wage employees for time missed, again as if they had worked. She has done the same in the past but the proposal never has passed into law.

It couldn't hurt to contact your Representative and Senators about this issue but it's not clear to me what actual authority Congress could invoke to force a private sector company to do that. Just the expression of interest could help though.

If we are needing to look for supplemental income, are we still bound by the ‘Other Employment’ ethics at our agencies?

Yes, as mentioned above.

You might want to look at the information on oge.gov as well as any agency-specific ethics rules of your own agency. Might be hard to get an answer to a question, though. OGE is among the closings and I would expect that agency ethics officials likely are off the job as well, in general.

I am not going to apply for unemployment. I don't want to delay the approval of someone who really needs the money now. However, I am still feeling a small portion of the stress. I could last for months or even over a year as long as they keep paying our health insurance premiums for us, but not being able to plan on anything is driving me nuts. This week is a little better just because it seems clear that we aren't going back until next Monday at the earliest. There are different kinds of stress.

I can completely relate. And not like Trump saying he can relate. He's had money and people (his dad) paying for stuff for him his ENTIRE life. My husband works for the federal government and is furloughed. We have enough savings to last quite some time. And while that gives us comfort, we are still stressed because who knows how long this shutdown will last. You save for emergencies but it's frustrating to have to spend your money for a problem created by politicians. You are right. It's the not knowing that makes me super mad!

I’ve been trying to find info about tapping into the equity on my house and refinancing. But sources are pretty confusing. Any suggestions?

Start with your current lender. Don't officially apply, just get an appointment to talk about your options and how refinancing works. Then get a least two more quotes about the cost of refinancing from other lenders.

But I would ask, why are you refinancing? Do you really need to do it? And please don't tap your equity to pay down debt. 

IRS employee here. I assumed that this would HAVE to end by early February because of the processing of tax refunds. But the administration appears to be taking steps to call back enough employees (unpaid) to process and issue refunds. So my initial assumption isn't going to work. Money already appropriated for SNAP won't cover more than about 60% of the February payments so that is an area of pressure, but I don't know if it will work.

The IRS is among the agencies funded by the financial services-general government bill that the House plans to vote on tomorrow. Basically, the goal seems to have been to pressure the White House on the tax refund issue but by acting independently, the administration has steered a detour around that.

The longer this goes on, the more the consequences become clear, as with the SNAP program and some other assistance programs. Apparently states might step in in some cases, in programs that are jointly state-federal, but how much they can do is another question. So, it's just hard to say what outside pressure will force a resolution, or when.

If you are not able to make a mortgage payment or rent payment and your credit is harmed because of this action, is there any recourse if it is due to the failure of the federal government to make payment of owed paycheck?

Excellent question. Valid point. But alas I have not heard about any recourse. The thing is ultimately you are responsible for paying your debts even when you become unemployment by not fault of yours. 

There's the rub. Even if they did give back pay to contracted companies, there's no way to guarantee the companies (both large and small) would pass it on to their workers. Remember the companies themselves are also losing $$.

I can't imagine a scenario in which Congress would just hand additional money to contractors and tell them to pass it along to their employees. Maybe a subtle message that the government's interest in continuing the relationship after the current contract expires will be influenced by how they treat their employees in this situation would be effective, though.

Presumably Congress would need to allocate funds to the contracting companies requiring them to pay individual contractors who would otherwise have worked. That seems unlikely now, but has it every happened in previous shutdowns?

See above. No, Congress has never given contractors additional funds and I can't imagine it ever will. The back pay they are considering would be for federal employees only.

Shutdown is costing $245 million/day. "Time's fun when you are having flies." Kermit the frog

Just curious, where did you get that number?

If a furloughed worker wants to use some of this time to make long-term changes to their expenses - say, researching new insurance deals - where would you start? Where would it be most cost-effective to look for savings?

I look at a lot of budgets -- A LOT. Here's where I see people waste the most money (And I'm not talking about people barely getting by)

-- Debt service. I've seen cases where people had nearly as much monthly debt payments as their rent/mortgage. Think about how much more you would have if you didn't have to service so much debt. 

-- Eating out. People overspend in this area in good times. I never understand how people can have several hundred dollars in eating out expenses and no emergency fund. 

-- High monthly auto loans. If you need to stretch your auto loan out more than 48 months you are purchasing a car above your means. Having said that unless you are at the beginning of a auto loan and the interest rate is almost criminal then refinancing may not help you. Just get out of that loan as soon as you can and then keep making those payments to yourself. If you keep your car for 10 to 12 years (as my husband and I do) you'll have the cash to buy your next car outright.

-- Cable, cell phone. People love their entertainment. If you are spending $200, $300 or even $400 on these two items combined or separately and you don't have an emergency fund well you are not budgeting well. You're not being responsible with your money. Cut the cord until at least your have one to two month's of living expenses saved up.

-- Housing. Spending more than 36% of your net pay on housing leave little room to save for emergencies. So really consider your housing costs and whether it's sustainable. If not consider getting a roommate or getting into a shared housing situation.

-- Definitely look at your insurance and shop around. See f you can cut your premiums or increase your deductible. But if you do the latter, make sure you have the deductible saved so that if you get into an auto accident or something happens at your home you have the money to start a claim. 

-- Spending on children. How much stuff do they really need? Take a hard look at how much you indulge your children. And I'm not talking about sport fees, etc. although that can get out of hand as well. 

What happens if I want to resign from the Federal Job (Less than 2 years ) during the shut down I hardly have any HR to discuss I am "essential" employee I have a great offer in the private sector I am confused

I'd say that if the company needs an answer by a certain date and you really want the job, just before that date send a message to your supervisor and the HR department and anyone else you can think of. It will be among the hundreds of to-do items waiting for them when they return.

That could complicate the back pay that will be coming to you for working unpaid. As a former employee you'd be at the end of the line for dealing with the inevitable problems that will arise.

Do you know if rental properties owned by Trump and his family are being lenient on furloughed and unpaid federal workers?

Great question!

I believe many of the properties with the Trump name aren't owned by the Trumps. They sell the name and leave the management to other companies. 

they didn't perform. I don't know much of anything about rules under which federal contracts are awarded, but there might be at least regulations that are there. And just paying out money, outside the terms of the contract and not for work performed, could be restricted.

The situation with contracts is very complex and factors such as how the contract is structured would have an impact, as you say. As mentioned above, I see no scenario in which the government would pay money outside the terms of the contract.

Spouse of a furloughed federal employee here. What you just said really resonates with me: "You save for emergencies but it's frustrating to have to spend your money for a problem created by politicians." I'm a careful planner and the fact that Trump's ego is preventing thousands of people from being paid is aggravating. Thanks for putting my feelings into words better than I have this week.

I'm just glad I didn't cuss!

"Maybe a subtle message that the government's interest in continuing the relationship after the current contract expires will be influenced by how they treat their employees in this situation would be effective, though." Unfortunately/fortunately (depending on your perspective), something like this could never be a consideration in a contract award. Not even in a wink-wink-nudge-nudge type way. There are many, many safeguards in place to avoid something just like this.

Anyone out there with contracting experience care to pitch in on this?

The Anti Deficiency Act would prevent an agency from paying a contractor for services not rendered. That's why there is not legislation to pay back pay to contractors who don't work. If the contractor does work, then payments may be delayed under a shutdown.

Thanks for the observation. I hadn't thought of that angle. I mostly have experience with that law in terms of restrictions against spending money that hasn't been appropriated.

are the federally sponsored flexible spending accounts functioning? I looked on the website and it says that the money for calendar year 2019 is available, but they aren't getting the $40 a pay period that I am aware. Money in those accounts are always available in advance, meaning you can spend it before your paycheck withholding adds up to that much, but can Mr. Yoder confirm? One of the things I try to do during a shut down is take care of doctors appointments. But I might have to pull back if the reimbursement money isn't there.

Heres' the guidance on this issue from OPM (If you haven't already to to opm.gov and read the agency's guidance for shutdowns furloughs)/

OPM: "Payroll deductions will cease for any employee that does not receive pay. The employee remains enrolled in FSAFEDS, but eligible health care claims incurred during a non-pay 17 18 status will not be reimbursed until the employee returns to a pay status and allotments are successfully restarted. The remaining allotments are recalculated over the remaining pay periods to match the participant’s election amount. Eligible dependent care expenses incurred during a non-pay status may be reimbursed up to whatever balance is in the employee’s dependent care account—as long as the expense incurred during the non-pay status allows the employee (or spouse if married) to work, look for work or attend school full-time."

Hi! I'm not sure if you know this, but do you have any numbers/stories on the people that did not receive backpay for the time they were furloughed? It seems like a lot of people are hoping that they receive pay...

All the reference sources I've seen (CRS reports, etc.) show that in past shutdowns, both those who worked without pay and those who were furloughed were later paid. In the former case, OMB determined many years ago that it is legally required without the need for further action by Congress. In the latter, it must be approved each time, and has--and would be again, under the bill the House passed last week and one it plans to pass tomorrow. So yes, there is good reason for them to hope/expect they will get back pay. But when, and what problems will they face until that time, as many of these questions illustrate.

My Agency got funding beginning on October 1, but we have just been told to not do any domestic or international travel unless it is related to National Security. Even for Mission Critical items, we are supposed to use alternative means other than travel to accomplish them. Have you heard about this?

Are you sure that's related to the shutdown? These kinds of directives are common--travel is often the first notch when agencies tighten their belts. Next comes training, office equipment upgrades, supplies and so on.

A solution (albeit not the best) would be for all contracts awarded be amended to allow for extended work weeks (EWW). Take that chunk of money not being spent during the shutdown and allow the employees to work OT to recoup it over the course of the fiscal year

Seems like that could work, not just for this situation but for weather closings, for example.

I'm thinking of my boss here. It took a few years for her to get her young son in the best after school program for him. If she pulls him out, she loses her place. They have to keep paying for it on the assumption that we will go back to work eventually and she will need after school care at that point. He doesn't have to GO, but they have to preserve his place by paying.

Thanks for sharing this shutdown story. A lot of folks are in the same boat. 

There is probably someone high enough up at your department that is excepted. You may have to walk up the management line to get to that person. You almost certainly have to turn in a badge and sign something to resign. Possibly send records to be archived, turn in technology, etc.

Thanks, this will be helpful to the questioner above.

For those of us who aren't government employees and want to help out folks who are on furlough and/or not getting paid, are there any organizations or drives out there that are accepting donations and providing support to those workers?

How kind of you. There are more than 700 GoFundMe campaigns from workers impacted by the shutdown.

You might also start close to home. Check with your friends, neighbors, church or synagogue members. See who may be in need. And yes, this means asking. 

I will say this:

- Don't lend people money. Give what you can afford.

- If someone says they need help paying a bill -- rent, utilities, car payment, etc. you should make the payment directly to the company. 

-- Invite folks over for dinner or take over groceries.

This is the time where hopefully those affected have built up a village and not be too prideful to ask for help. 

Interested to hear your thoughts on this column.

Contractors on stop work notices are not likely to get reimbursed for work not performed. Believe me, as a company Exec, it sucks to not be able to pay people and furlough them because of political whims. It all depends on how contracts are funded. Most of ours are paid for work done, not forward funded.

Thanks for your input. This is all a big hot mess! And for those who might be tempted to think it's a big holiday for folks let me just say, it isn't. The federal employees and contractors I know want to work. And many aren't at ease or chillin' because they have no idea when they will go back to work. Even for those of us who have savings this is very stressful, particularly if you have friends and family who live paycheck to paycheck. 

Just saying.

I know this isn't strictly part of this chats remit but I think the US is the only country in the world that inflicts such damage on it's own employees because the politicians can't sort themselves. expecting people to work for no pay is quite frankly ridiculous. There should be a mechanism to still pay basic salary and overtime etc can be paid at a later date. At least staff would know they would get a minimum salary. Belgium had no government for 6 months yet civil servants still got paid. Ditto in Northern Ireland where the executive and assembly is suspended. Budgets were maintained at existing levels. everyone got paid their existing salary and work continued.

There is a lot of head-scratching on this here, too.

Basically, it all results from a budget process that was installed in the early 1970s designed to spread the power of the purse across more players in reaction to centralized control by a handful of congressional leaders. I doubt they envisioned that this kind of scenario would one of the possible outcomes. And yes, there have been efforts to change it, most recently just last year, but that has always proven to be too tall a task.

I'm not American and of course a country can make its own laws etc. Yet, I find it hard to understand how the US can require people to work without paying them for an indeterminate length of time. And more strikingly, why there are not protests in the streets. If the workers themselves are prohibited by law or their contract to protest, why aren't their families out to protest? Like I said, it's your country, but the contempt shown to ordinary citizens here is mindboggling.

People are protesting but lots of workers don't want to get in trouble for talking to media, etc. 

And yes, it's crazy!

Contractors can not get back pay and you can't consider potential shutdowns directly in negotiations/contract award, but contractors can consider potential shutdowns in determining their "overhead" rate. So they could bill the government for this indirectly in future contracts (although the government would try and negotiate this out)

That seems like a good reading of what might happen.

Is there any legal redress for anyone employed by the federal government for trouble they may get into for falling behind on any payments they're due while not being paid? I mean, if I work for a 'normal company', and they don't pay my salary, that would be a clear breach of contract. Are federal employees exempted from such protection, or must they agree to this when the the sign up?

Federal employees do not have contracts (with extremely limited exceptions) so there is no recourse in contract law against the government as an employer. Their rights are spelled out in various law including the Civil Service Reform Act which makes no provision for such lawsuits.

Thanks for joining us today. Great questions and comments. I'll be back on Thursday at noon if you didn't get your question answered. 

And we want to hear from you if you're a federal worker. What are you doing to prepare for a missed paycheck? If you're a contractor and have already missed some pay tell us how you're making ends meet. What's your biggest concern right now?


In This Chat
Michelle Singletary
Michelle Singletary writes the nationally syndicated personal finance column, "The Color of Money," which appears in The Post on Wednesday and Sunday. Her award-winning column is also carried in more than 120 newspapers. In her spare time, Singletary is the director of a ministry she founded at her church, in which women and men volunteer to mentor others who are having financial challenges.

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Eric Yoder
Eric Yoder is a national reporter focusing on internal federal government personnel, management and budget policies for The Washington Post.
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