Due to the partial government shutdown, which began Dec. 22, the almost 800,000 federal employees who aren’t being paid struggle to make ends meet. Many have to go to food banks and homeless shelters as they prepare to miss a second consecutive payday.
President Trump’s Commerce Secretary Wilbur Ross says workers can just take out a loan, right? Wrong.
On CNBC’s “Squawk Box” Thursday, Ross said, “I don’t really quite understand why” these federal workers are going to shelters and food banks.
“The obligations they would undertake, say borrowing from a bank or a credit union are in effect federally guaranteed,” he said.
“So the 30 days of pay that some people will be out — there’s no real reason why they shouldn’t be able to get a loan against it,” he said.
That’s not realistic for anyone who could be living paycheck to paycheck.
Here’s a clip of the interview:
“True, the people might have to pay a little bit of interest,” said Ross. “But the idea that it’s ‘paycheck or zero’ is not a really valid idea.”
He also said that financial institutions are offering “very, very low-interest-rate loans to bridge people over the gap.”
However, the Commerce Department’s federal credit union “is charging furloughed employees almost 9 percent interest on emergency loans to cover their missing paychecks,” according to The Washington Post.
Ross also said that the 800,000 workers not getting paid were, overall, not a large number.
“If they never got it, you are talking about a third of the percent on our GDP,” he said. “So it is not like it is a gigantic number overall.”
Since the shutdown began, more than 20,000 of Ross’ employees haven’t been paid. He has a net worth of more than $700 million, which he accumulated from buying distressed debt.
The reaction was swift to Ross’ tone-deaf comments:
Rep. Pramila Jayapal:
“That is the most elite out of touch thing that I have ever heard in my life in all of my years ever on this earth,” CNN’s Don Lemon said on Thursday night. “That is the most insulting thing that I have ever heard, and the most elitist. I could not believe it. I had to go back to say I have to find this on the Internet. Is this true?”