The Government Shutdown: More than a Headline

The team and I were talking about the government shutdown and how anxious we are about the state of affairs in our country. We started talking about the different programs we have and how they might be affected so I thought we could look into it a little further. Thinking about the Semi’a Fund, COMPRA Foods and some of our policy work, we wanted to understand how the partial shutdown affects them.

Today marks the 34th day of the 2019 Government Shutdown. I have seen many things in the news about who it is affecting, and felt we should curate a few key points to raise, particularly around the people we serve here at LURN. Considering our work revolves around economic development, many pieces of this shutdown touch our work and constituents. Here are a few of the highlights that I learned as I was digging into how this impacts communities in our city:

FOOD

Because the Supplemental Nutrition Assistance Program (SNAP) is a federally funded program, there is a possible disruption in service around payment to some stores that take SNAP. Due to licensing updates needed to process EBT/SNAP payments from customers, some stores are unable to renew because of the shutdown. This means they can’t take EBT from customers.

For California, and specifically Los Angeles, these issues are manifesting in a semi-unexpected way. There are about 4.1 Million people who receive SNAP benefits in California (that’s about 10.4% of the population or 1 in every 10 people in the State). California had to issue a statement that SNAP recipients will be receiving their February payments early – on January 20 –  and in turn will need to be careful about budgeting for next month – and possibly longer. In LA County alone, there are about 1.1 Million people who depend on the SNAP program. Combining this issue with the fact that teachers from LAUSD, the second largest school district in the country, were on strike all of last week, means that many of the children in the school district were at home on strike days (and consuming more home-made food). Nearly 300,000 children in LAUSD get their first meal after they reach school. Considering an astonishing 90% of students in LAUSD are students of color, and 84% of of students qualify for free or reduced price meals, this aspect of the government shutdown in terms of Los Angeles is an issue of race, class, and age – further defining the haves and the have nots, and disproportionately affecting low-income communities of color.

As more teachers’ unions talk about striking, and with the government continuing its standoff, this issue will more deeply affect students in areas like Denver where SNAP benefits have already been distributed and children will possibly have to stay home from school. And considering there isn’t a definite end in sight to the shutdown, it is unclear when SNAP recipients will get their next disbursement of funds.

NON-PROFITS AND THE PRIVATE SECTOR

Everything from Higher-Education to Hospitals to your local advocacy organization are often fueled in part by the federal government. In California, that number is about 10% of monies. We spend a lot of our time supporting entrepreneurs through programs such as our micro-loan fund, the Semi’a Fund, and we also sometimes refer entrepreneurs to other programs like those in the Small Business Administration (SBA). Because of the government shutdown, the SBA’s information and financial resources for small businesses is on hold which puts the onus on other organizations like ours to step up with technical assistance and low-interest loans. And just today, the Commerce Secretary encouraged, federal workers to take out loans to cover their bills because they will “get their back pay,” but unfortunately, nearly 10,000 companies who contract with the government will not be able to get paid back for any work they do towards their contracts during this time. Considering there are about 4.1 million workers amid these companies (or about 2.5% of the workforce nationally), we are looking at a month (or more) of less economic growth for the country in the year 2019.

HOUSING

The Department of Housing and Urban Development (HUD) administers a number of programs for rental assistance to low-income residents across the nation. The Housing Choice Voucher Program (more commonly known as Section 8 housing), project-based rental assistance programs, among others now have a lapse in funding because of the shutdown. There are about 57,000 households in the City of Los Angeles that depend on the Voucher Program (about 4% of the households within the City). Luckily, it is a violation of federal law for landlords to evict tenants due to delayed payments from the government. But non-payment to landlords from the federal government can mean any repairs or updates that were in the works are now put on delay. For the 1,150 contracts that have expired nationally over the last month, landlords can demand that the full rent be paid, and ultimately evict people unable to pay (though it is unlikely it’ll come to that). If the shutdown continues into February, there will be 500 more contracts that expire, putting in jeopardy the housing of many elderly and disabled people across the country. This also has broader implications though, because these rental assistance programs put on by HUD often depend on landlords willing to participate. But if the government isn’t demonstrating that they are a reliable source, this could possibly have implications later for expanding or even maintaining these programs.

As you can tell, the government shutdown is more than just a headline in our newspapers, it has real ramifications for people that live in the communities we work in. We have had a lot of conversations about this here at LURN the last few days, but this dialogue should not just happen in the workplace, it should happen among us in everyday life. While we work towards changing these systems, we will always be leading with equity in mind – and that can’t be done without this type of critical thinking. What are you worried about? Do you have any information to share? We encourage the discourse and look forward to talking!