We are now just days away from breaking the dubious record for the longest government shutdown in history.   

While most of the debate yesterday centered on what President Trump would say in his prime time address to the nation (and what Democrats would say in response), there was actually another, bigger development that got lost in the shuffle.

Here's the problem, the solution, and the truly aggressive way this all played out.

Two big land mines

Americans are beginning to feel the bite. Aside from the 800,000 federal workers who aren't getting paychecks because of the shutdown, some observers have been warning (practically screaming) that there were two, massive financial land mines just ahead for the U.S. economy.

Because of how this all unfolded, it's reported that senior Trump administration officials didn't actually realize in their haste that the government would be unable to do two key things under the law during a shutdown:

  • pay out an estimated $100 billion in federal tax refunds, and
  • distribute an estimated $4.7 billion in monthly Supplemental Nutrition Assistance Program (SNAP) benefits.

Now, in the last 36 hours -- Monday afternoon and then on Tuesday -- the Trump administration announced some legal moves that are controversial, but should have the effect of defusing both situations, at least temporarily.

SNAP and taxes

I wrote yesterday that the government was going to go ahead and pay out tax refunds anyway. They're using a theory that's arguably pushing the envelope to come up with a legal argument, but it's probably never going to be tested in court. 

The simple reason is that nobody is likely to sue, because nobody wants to be known as the person who tried to stop everyone else in America from getting their tax refunds.

Now, the administration says it's doing something similar with regard to SNAP. The Department of Agriculture said it has determined that it can use a loophole in the law to pay February SNAP benefits during January.

"USDA is working with states to issue February benefits earlier than usual," the official department announcement said. They're relying on a provision in the budget that just expired, that they say lets them fund "SNAP and child nutrition programs" for 30 more days after the budget expires. 

A reprieve, at least

I wrote previously that losing the economic impact of 800,000 federal workers is basically the same as losing every Amazon employee and every Target employee in the U.S. all at once. It's devastating.

As bad as that is (and it's horrible for the employees suddenly going without paychecks and who are actually being mocked by some of their fellow Americans for it), these two big holdbacks could have been even worse, in terms of sheer dollars and impact.

So, my hat is off to the lawyers who came up with these ideas to justify paying tax refunds and SNAP. Because holding back those payments could have a devastating effect.

Granted, the IRS still has 88 percent of its workforce being told to say home without pay, and the SNAP funds solution will last only as far as the end of February.

But at least it's a reprieve. And regardless of how you feel about building a border wall, or whether you think President Trump, or Republicans or Democrats in Congress are most at fault, it's good news.

It's also worth noting that somewhere in the government bureaucracy -- likely without being paid due to the shutdown itself -- somebody's trying to find solutions to these dangerous problems that people just didn't see coming. 

Published on: Jan 9, 2019
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