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Key Takeawayas
- The White House is reportedly considering withholding back pay to 750,000 federal workers who are furloughed during the government shutdown.
- Back pay is required under a 2019 law, but a memo argues the law does not apply.
- The move by President Donald Trump is the latest escalation in the shutdown fight.
President Donald Trump is raising the stakes of the ongoing government shutdown by threatening to withhold back pay from 750,000 federal workers currently on furlough.
That’s according to a legal analysis drafted by White House, first reported by Axios and confirmed by several other publications. The memo says the law does not require the government to pay employees who worked without pay or were furloughed during the shutdown, which began Oct. 1. It contradicts the White House’s Office of Personnel Management guidance on the issue from September, which said employees would receive back pay as they have in the past.
What This Means For The Economy
The threat to withhold back pay from workers raises the stakes in the current shutdown fight and would magnify its impact on the economy.
Democrats were quick to dispute the memo’s conclusions, arguing that the Government Employee Fair Treatment Act of 2019, passed in the wake of another government shutdown, requires workers to be paid retroactively. The memo contends the law requires Congress to approve any back pay when the shutdown ends.
“Federal employees are guaranteed back pay at the end of any shutdown by law,” Congressman Don Beyer, a Democrat from Virginia, posted on social media. “This is not in question.”
Should Trump follow through with the threat, and it withstands legal scrutiny, it would deepen the financial strain for federal workers who are going without paychecks during the shutdown. It could also worsen the economic consequences.
Trump has also threatened to break with precedent by permanently laying off workers who are furloughed during the shutdown. The Congressional Budget Office estimated 750,000 workers are missing a combined $400 million in pay each day the shutdown continues.
The government has been shut down as Democratic lawmakers have demanded Republicans undo cuts to the Medicaid program and extend health care subsidies set to expire at the end of the year. In contrast, Republicans have attempted to pass funding measures without altering health care policy. Both sides have shot down one another’s bills.
