Shutdown pressure felt


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In this Jan. 10, 2019 photo, Speaker of the House Nancy Pelosi, D-Calif., meets with reporters in her first formal news conference, on Capitol Hill in Washington.   Pelosi has asked President Donald Trump to postpone his State of the Union address to the nation, set for Jan. 29, until the government reopens.
 (AP Photo/J. Scott Applewhite)

In this Jan. 10, 2019 photo, Speaker of the House Nancy Pelosi, D-Calif., meets with reporters in her first formal news conference, on Capitol Hill in Washington. Pelosi has asked President Donald Trump to postpone his State of the Union address to the nation, set for Jan. 29, until the government reopens. (AP Photo/J. Scott Applewhite)


A portion of a letter sent to President Donald Trump from House Speaker Nancy Pelosi, Wednesday, Jan. 16, 2019 in Washington. Pelosi has asked President Trump to postpone his State of the Union address to the nation, set for Jan. 29, until the government reopens. (AP Photo/Wayne Partlow)


President Donald Trump speaks at the American Farm Bureau Federation's 100th Annual Convention, Monday Jan. 14, 2019, in New Orleans. (AP Photo/Jacquelyn Martin)


Trump feels shutdown pressure from economists, Nancy Pelosi

By CATHERINE LUCEY, JILL COLVIN and LISA MASCARO

Associated Press

Wednesday, January 16

WASHINGTON (AP) — Shutdown pressure on President Donald Trump mounted Wednesday as House Speaker Nancy Pelosi called on him to delay his State of the Union address and his own economists acknowledged the prolonged standoff was having a greater economic drag than previously thought.

In a letter to Trump, Pelosi cited security concerns, noting that both the Secret Service and the Homeland Security Department are affected by the partial government shutdown, now it its fourth week. She added that unless the government reopens this week, they should find another date — it’s now Jan. 29 — or Trump should deliver the address in writing.

The White House did not immediately respond to the high-stakes move on the 26th day of the shutdown, as Trump and Democrats are at an impasse over Trump’s demands for $5.7 billion to build a wall along the Mexican border.

Pelosi is refusing money for the wall she views as ineffective and immoral; Democrats say they will discuss border security once the government has reopened.

Seven Democratic lawmakers went to the White House on Wednesday to ask Trump to agree to re-open the government while talks continue over his push for border money, a request the president has heard before and rejected.

The White House has been trying to peel lawmakers away from Pelosi but Trump’s invitations to Democrats earlier this week were declined. But the seven, mostly freshmen, come from areas where Trump remains popular. Several did not back Pelosi as speaker.

Separately, Sens. Lindsey Graham of South Carolina and Chris Coons of Delaware were organizing a bipartisan letter asking Trump to reconsider his rejection of the idea of reopening the government for three weeks to allow time for negotiations on border security.

The letter, a copy of which was obtained by The Associated Press, states that the senators will make their best efforts to have “Congress develop and vote on a bipartisan agreement that addresses your request” for border money if he agrees to support legislation reopening the government for those weeks.

Even as administration officials projected confidence in their course, Trump’s economists indicated the shutdown was having a greater impact than previously predicted.

Kevin Hassett, chairman of the White House Council of Economic Advisers, said Tuesday the shutdown is slowing growth more than predicted.

An economic shift could rattle Trump, who has tied his political fortunes to the stock market and repeatedly stressed economic gains as evidence that his tax-cut package and deregulation efforts are succeeding. Economic optimism had already cooled somewhat as Trump’s trade fight with China shook the markets.

Hassett told reporters the White House is doubling its estimate of the strain on the economy of the shutdown, and now calculates that it is slowing growth by about 0.1 percentage points a week.

With the shutdown in its fourth week, that suggests the economy has lost nearly a half-percentage point of growth so far, though some of that occurred at the end of last year and some in the first quarter of this year. Hassett said the economy should get a boost when the government re-opens.

Previous White House estimates of the impact did not fully take into account the effect on people who work for private companies that contract with the government to provide services, Hassett said.

While the hit to the overall economy so far remains slight, economists foresee real damage if the shutdown drags into February or beyond.

Roughly 1 million government employees and contractors aren’t being paid. Travel plans are compromised by shuttered federal parks and airport delays. Some Americans trying to start small businesses face delays in obtaining the required tax identification number from the IRS.

White House spokeswoman Sarah Huckabee Sanders told reporters that the economy remained strong.

“I know there has been some impact, but at the same time we’re focused on the long term economic principles the president has laid out,” she said.

The House and Senate said they will cancel a recess later this week if the shutdown continues, which seemed likely.

The president, on a conference call with supporters Tuesday, showed no signs of backing down.

“We’re going to stay out for a long time, if we have to,” Trump said. He also suggested the partial shutdown, which has clogged airport security lines and shuttered federal agencies, was going smoothly.

Behind the scenes, though, the administration and its allies on Capitol Hill are warily eyeing the next payday. They hope to reach a resolution before a Tuesday deadline, when they’ll need to prepare the next round of paychecks for workers who have been seeing zeros on their pay slips.

Trump, who a week ago seemed intent on declaring a national emergency in order to build the wall, has turned his attention back to Congress as polling suggests he is taking much of the blame for the standoff.

On Tuesday, the White House had invited rank-and-file lawmakers to lunch with Trump at the White House as part of a strategy to build support from centrist Democrats and newly elected freshmen. But none of the House Democrats took Trump up on the offer.

Trump ended up lunching with a selection of lesser-known House Republicans.

For AP’s complete coverage of the U.S. government shutdown: https://apnews.com/GovernmentShutdown

Associated Press writers Chris Rugaber, Darlene Superville, Matthew Daly, Jonathan Lemire, Alan Fram, Andrew Taylor, Laurie Kellman, Elana Schor and Ken Sweet contributed to this report

The Conversation

The shutdown will harm the health and safety of Americans, even after it’s long over

January 15, 2019

Author: Morten Wendelbo, Research Fellow, American University School of Public Affairs

Disclosure statement: Morten Wendelbo does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

Partners: American University School of Public Affairs provides funding as a member of The Conversation US.

With the U.S. federal government shutdown now the longest in history, it’s important to understand what a shutdown means for the health and safety of Americans.

The good news is that in the short run, the consequences are relatively few. But, as a researcher who studies natural disaster planning, I believe that Americans should be worried about the federal government’s long-term ability to ensure good public health and protect the public from disasters.

As the shutdown draws on, it increasingly weakens the government’s ability to protect Americans down the road, long after federal workers are allowed to go back to work. Many of these effects are largely invisible and may feel intangible because they don’t currently affect specific individuals.

However, the shutdown poses a very real threat to preparedness for future emergencies, such as natural disasters and disease outbreaks. It also damages the government’s ability to recruit and retain the experts needed to work at the cutting edge of public health.

Disaster preparedness and response

Much funding for disaster recovery that is already underway is funded in appropriations separate from those that fund the shuttered parts of government.

On Dec. 26, however, the Federal Emergency Management Agency, which contracts private contractors for a large share of their work, ordered its contractors to cease working on several projects. Even for programs with funding, progress is made difficult by a shortage of several thousand staff members.

When President Trump signaled to the Senate that he would not sign into law the appropriations bills that had passed the House, leading to the shutdown, funding with bipartisan support for disaster recovery died too. This impedes disaster relief efforts in the states that experienced disaster in the past two years. Among others, it leaves victims of the forest fires in California and victims of Hurricane Florence in the Carolinas waiting for crucial help needed to recover.

The shutdown also weakens the government’s ability to foresee, prevent and respond to upcoming natural disasters. For example, hurricane modelers with NOAA, the agency chiefly responsible for storm forecasts, are furloughed.

In California, dozens of people recently died in the worst forest fire in the state’s history, while more than 10,000 homes were destroyed. These forest fires were so severe in part due to how forests have been managed. However, more than half of all of California’s forests are managed by the federal government. During the shutdown, those forests are not being managed at all.

In general, first responders and emergency experts use the off season to prepare for the next disaster season, but reports show that the prolonged shutdown is preventing some of this preparation, such as training for essential staff and forecasters.

More scary still is the possibility of a widespread disease. The lapse in funding also means that Pandemic and All-Hazards Preparedness Act did not renew as expected. This act lets the federal government fund the development of emergency medicine, as well as new medications in advance of future outbreaks, among many other disaster preparedness functions it funds. Even with a fully functioning federal government, several critical supply chains broke down during last year’s flu season, preventing delivery of basic medical goods like saline.

The shutdown severely weakens the ability of the federal government to respond to new threats, even after the shutdown has ended.

Losing dedicated public servants in public health

After the shutdown is over, it will probably also prove difficult for the U.S. to retain some of the staff who are crucial to the success of public health – even more so than in most other sectors of the federal government which will also struggle to retain its public servants.

Roughly half of the staff at the Department of Health and Human Services are deemed essential and continue to work despite the shutdown. The other half has been sent home. But neither group is getting paid.

During brief shutdowns, many of which have historically lasted only one to three days, such a lapse in pay is frustrating, but typically a surmountable challenge for most federal workers. During a shutdown lasting weeks, with no end in sight, it means hundreds of thousands of families struggle to pay for rent, school fees, medical care and other expenses essential for their own safety and well-being.

For many personal contractors, who make up hundreds of thousands of the federal government workforce, the loss of pay may be permanent.

This will all make it substantially less attractive to be a federal worker in the future. That is especially true for workers in public health. Although federal jobs often pay as well or even better than the private sector, that is not true for the field of public health, where workers often take pay cuts to become public servants.

To make matters worse, the president has signaled that federal salaries will be cut for 2019. Together, the pay cut and the shutdown may push government employees to join the private sector, leaving the federal government less capable of taking on public health challenges and disasters in the future.

Comment

TJ Martin: Correction; The loss of pay for all federal contracts workers either furloughed or WWOP ( working without pay ) is already permanent as set down in federal employment and contract labor polices

The only way that can change is if in a moment of contrition once the shutdown concludes is if both the House and the Senate can agree to give those contractors the back pay lost during the shutdown

The real rub ? Be you contractor or federal employee ..you by law can not seek out alternative temporary employment during the shutdown without full approval of the Ethics Committee … which ironically … is furloughed during the shutdown !

e.g If you’re a federal contractor rather than a federal employee . You’re .. err … ( four letter expletive ) out of luck

And trust me …. every federal employee of all rank and status across all federal agencies agencies dependent on the work federal contractors do … are none too thrilled about the expected ramifications , fallout .. not to mention lack of future applicants etc

The Conversation

Many painful returns: Coping with crummy gifts

January 16, 2019

Author: Deborah Y. Cohn, Associate Professor of Marketing, New York Institute of Technology

Disclosure statement: Deborah Y. Cohn does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

What happens to the gifts you get? I’m not talking about the ones that you really adore. I mean the rest of them – the ones you can’t or don’t want to use, or even hate.

The problem doesn’t end when you’ve awkwardly thanked someone and thrown away the wrapping paper. In my case, I stowed an awful present from my dad in a closet for years. Whenever I looked at it, I got upset all over again.

That experience was one reason why I became a consumer researcher who studies gift giving. Based on my research, I have come to understand the price paid by the people who get unwelcome gifts.

Many costly returns

Painful gift giving falls into two categories. One is intentional and the other is accidental. Either way, it burdens friends and loved ones with unwanted stuff they may try to get rid of.

One common solution, at least for purchased gifts, is returning them. But even when the giver gets a refund or the recipient converts an eyesore into a pile of more useful cash, that still takes a toll.

Retail holiday sales amounted to an estimated US $720 billion in 2018, with about 10 percent of those purchases being returned.

Two rulebooks

To learn more about how people deal with gifts they don’t like, want or need, I teamed up with consumer behavior expert Leon G. Schiffman. We did 30 in-depth interviews individually with 15 couples to study what happens in those situations. I always began with the question, “Can you tell me about gift giving between you and your spouse?”

I also searched for the words “gift returns” on message boards at Babycenter.com and analyzed more than 500,000 relevant results.

With both approaches, I found that a lot of people, mostly women, want advice about returning gifts. I also saw that many people try to not let givers know about it.

Some people feel guilty about returning presents, but not everyone. It seems that people tend to follow one of what Schiffman and I call two gift-giving rulebooks.

One is economic. Some people just care about the monetary value of gifts. They don’t want to waste the giver’s money and effort so they try to swap out the gift for cash, credit or merchandise they want or need.

The other is symbolic. Some people see gifts as a means of communication. They fret about the message they may send by returning, exchanging, or otherwise getting rid of the gift. They worry about how the person who gave it to them might feel if they knew.

Faking it

Some people feel compelled to make use of unwelcome gifts out of concern for their friends or loved ones. That can cause trouble.

For example, a woman who gets a purse she hates for Christmas from her husband might not want to hurt his feelings by letting him know. She would then use it at least occasionally to give him the impression that she likes it. What options would she have to subtly let him know not to buy her another one for her birthday?

It depends on her rulebook.

For people in the symbolic camp, they have two options: use it or store it. The ones who take the storage option might go out of their way to still use the gift once in a while, taking the utmost care not to hurt the giver’s feelings.

The economic types are more practical.

When they are sure that the person who gave them an ugly purse for Christmas are also pragmatic, then they have no qualms about returning, exchanging, donating, selling or re-gifting the thing.

However, if they aren’t sure about how the giver might feel, they might be like the people I found seeking advice on the internet. They often ask questions such as whether they can return gifts purchased through Amazon or registries without the sender knowing, and if it’s rude to return gifts.

These questions indicate that recipients are concerned about how returning makes gift givers feel – usually not so good – and the giver’s feelings. However, they are also concerned about getting a gift’s monetary value. Common responses to questions about what else can be done when you can’t return something to a store without receipts include donate it, sell it, find another use for it, store it for later use or give it to someone else.

There seems to be a buffer period of time after which a stored item can be donated, sold or re-gifted without many qualms. The apparently sacred power of the gift ebbs over time, making it acceptable to ditch once it no longer seems like a gift.

Whatever etiquette you find appropriate in this situation, apps such as LetGo, Nextdoor and Decluttr can help too. These platforms offer avenues for selling unwanted items, whether it’s new or old.

There’s also ReturnRunners, a different kind of app. It helps you to hire someone, for a fee, to return gifts you wish you hadn’t gotten.

The Conversation

Ulterior motives may lurk behind new debit card for federal student loan borrowers

January 16, 2019

Author: Lewis Mandell, Professor Emeritus, Finance Department, University at Buffalo, The State University of New York

Disclosure statement: lewis Mandell does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

Partners: University at Buffalo, The State University of New York provides funding as a member of The Conversation US.

The U.S. Department of Education is about to pilot test a new debit card for students who get federal student loans.

For the federal government, it means less hassle and a way to get a glimpse at whether students are spending their student aid wisely. For the bank that gets to issue the card, it means access to a tremendous base of future middle-class clients. For students, it means potential savings since the card has no fees and prevents students from overdrafts.

As a scholar of both payment cards and financial literacy for young adults, I see benefits but also a serious potential downside to the debit card.

Potential benefits

Let’s look at benefits first.

By streamlining schools’ processing of financial aid funds, the administrative costs of distributing approved student aid can be reduced and result in some taxpayer savings.

Second, if the federal government uses its bargaining power to reduce – or eliminate – banking fees for students, it will help lower overall college costs.

Third, some students may benefit by having restrictions placed on their ability spend more money than they have.

But there are also potential downsides. For instance, the federal government and the card-issuing bank could monitor student spending habits in ways that could lead to restrictions on purchases. Banks might also use intimate data on student spending habits to sell them an array of profitable products after they graduate.

Simplifying and streamlining

The federal student loan program is huge. In the last quarter of 2018, 42.9 million people collectively had student debt of US$1.42 trillion. Student loan balances exceed both credit card debt and auto loans and now constitute the largest amount of consumer debt in the U.S.

The federal student loan program is also troubled. According to Education Secretary Betsy DeVos, nearly 20 percent of federal student loans are delinquent or in default – seven times the delinquency rate on credit card debt. DeVos and others suggest that part of the problem is that students may not have been given enough information to make informed borrowing decisions.

A major function of the Federal Student Aid payment card is to handle the “refund” of funds disbursed through the agency. In this context, a refund is the remaining amount of federal student aid given to a student to help support a semester of college, after tuition and other college fees have been taken.

For example, if Makayla’s federal student aid is $10,000 per semester while her tuition and fees are $6,000, Maykayla’s refund would equal $4,000. The purpose of the refund is to help pay her other expenses such as books, a computer and personal items. The payment card, which would work like a prepaid debit card, could simplify the payment process by transferring the refund directly from Federal Student Aid to the student, bypassing the need for the college to cut a check or otherwise transfer the refund to the student.

The payment card would be convenient for students since a pre-paid debit card would substitute for a checking account. In fact, the payment card is specified to be totally free for students, with no minimum balance requirements. Historically, about half of campus-based banks have charged fees for their accounts that ranged from $1 to 47 annually.

With a prepaid debit card, students can spend only the money they have in their account and cannot rack up large fees for insufficient funds since a debit card purchase will be declined if it exceeds the student’s current bank balance. Aside from protecting the lender, this may also force students to budget and live within their means since they cannot incur additional debt by overdrawing their account balances. It may be embarrassing to have one’s debit card declined for insufficient funds, but at least having a debit card declined is not illegal and won’t cause students to get overdraft fees like they would if they wrote a bad check.

Card restrictions possible

Along with improving the efficiency of distributing student aid and conditioning future student loan recipients to budget more carefully, the payment card will be a “restricted debit card,” which means that the issuer can restrict certain merchants or types of merchants from receiving payment for their goods and services.

In the payment card world, every type of business is given a four-digit Merchant Category Code that describes what they sell. It is possible that bookstores would not be restricted while bars and tattoo parlors could eventually be made off limits. In addition to possible arbitrary, values-based restrictions, constraints can cause problems for “nontraditional students” such as single parents who may need their refunds to pay for rent or day care. It appears that no category restrictions will take place during the pilot phase, which begins in 2019, although they may be possible in the future.

Participating banks must provide to Federal Student Aid data on how students collectively are spending their money. It is not difficult to see how this data could be used to limit certain types of purchases in the future.

Securing students as customers

Why would a large bank be willing to take on a new, complex, rules-ridden project with no fees, and unprofitable student customers who tend to carry low balances but do a large number of transactions?

First, it gives the bank the opportunity to be the primary financial service provider for millions of college students who in a few years time will likely be middle- or upper-class college graduates with multiple, profitable financial needs over their lives. For many college students, this banking relationship may persevere for many years, particularly since mandatory college loan repayments tie students to the bank that provided their student loan for a decade or more after graduation.

There is another, possible, but more insidious motivation for a bank to participate – the acquisition of the student’s financial behavior data which can be used to sell them other bank products, such as credit cards, mortgages, investment accounts and loan consolidations over a lifetime. These valuable data can also be sold to other companies. This benefit to the card-issuing bank is recognized but limited by the U.S. Education Department’s request for proposal, which states that bank use of their student data must be approved by the student loan borrowers themselves each time the bank wishes to use such personal information.

The Department of Education, faced with huge operational costs and default rates in its student loan program, deserves credit for its efforts to reduce these costs so that the invaluable aspects of its program can continue. The debit card can be helpful in reducing costs for the government as well as for students who will save money on banking fees.

The primary downsides of such a payment card depend on how student loan borrower data are used and how the card might be restricted in the future.

In short, the Federal Student Aid payment card will ultimately be seen as a rather small but efficient technological change in the way student financial aid is transmitted. But it will do little, if anything, to lessen the overriding problems caused by unmanageable student loan obligations taken on by many unwitting students.

In this Jan. 10, 2019 photo, Speaker of the House Nancy Pelosi, D-Calif., meets with reporters in her first formal news conference, on Capitol Hill in Washington. Pelosi has asked President Donald Trump to postpone his State of the Union address to the nation, set for Jan. 29, until the government reopens.
(AP Photo/J. Scott Applewhite)
https://www.sunburynews.com/wp-content/uploads/sites/48/2019/01/web1_122142535-93e432075a7a4bdb9804e4b7ff2d1fda.jpgIn this Jan. 10, 2019 photo, Speaker of the House Nancy Pelosi, D-Calif., meets with reporters in her first formal news conference, on Capitol Hill in Washington. Pelosi has asked President Donald Trump to postpone his State of the Union address to the nation, set for Jan. 29, until the government reopens.
(AP Photo/J. Scott Applewhite)

A portion of a letter sent to President Donald Trump from House Speaker Nancy Pelosi, Wednesday, Jan. 16, 2019 in Washington. Pelosi has asked President Trump to postpone his State of the Union address to the nation, set for Jan. 29, until the government reopens.
(AP Photo/Wayne Partlow)
https://www.sunburynews.com/wp-content/uploads/sites/48/2019/01/web1_122142535-ac82d33a51804d20b2d09a49ea5858bb.jpgA portion of a letter sent to President Donald Trump from House Speaker Nancy Pelosi, Wednesday, Jan. 16, 2019 in Washington. Pelosi has asked President Trump to postpone his State of the Union address to the nation, set for Jan. 29, until the government reopens.
(AP Photo/Wayne Partlow)

President Donald Trump speaks at the American Farm Bureau Federation’s 100th Annual Convention, Monday Jan. 14, 2019, in New Orleans. (AP Photo/Jacquelyn Martin)
https://www.sunburynews.com/wp-content/uploads/sites/48/2019/01/web1_122142535-aa329d26a13440ea8524c73130202289.jpgPresident Donald Trump speaks at the American Farm Bureau Federation’s 100th Annual Convention, Monday Jan. 14, 2019, in New Orleans. (AP Photo/Jacquelyn Martin)
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