Commerce Secretary Wilbur Ross wonders why furloughed employees don't take out loans

Posted at 1:22 PM, Jan 24, 2019

Commerce Secretary Wilbur Ross says he doesn't "really quite understand why" federal workers who have missed paychecks due to the partial government shutdown don't just take out loans to cover the gap.

When asked in a CNBC interview on Thursday about reports that federal workers are going to homeless shelters or seeking food assistance, the billionaire investor said: "Well, I know they are and I don't really quite understand why, because as I mentioned before, the obligations that they would undertake, say borrowing from a bank or a credit union, are in effect federally guaranteed, so the 30 days of pay that some people will be out is no real reason why they shouldn't be able to get a loan against it."

The government has been partially shut down for more than a month, with no apparent end in sight.

A food pantry opened by chef Jose Andres in central Washington has been swamped with workers seeking hot meals, while furloughed employees across the country have been visiting food banks and seeking other assistance.

The comments from the commerce secretary came after a senior economic adviser to President Donald Trump compared the shutdown to a vacation .

White House economic adviser Kevin Hassett said earlier this month that furloughed federal workers who are not getting paid during the partial government shutdown are "better off" because they won't be docked vacation days and will eventually get paid anyway.

"Huge share of government workers were going to take vacation days, say between Christmas and New Year's. And then we have a shutdown and so they can't go to work, and so then they have the vacation but they don't have to use their vacation days," Hassett told PBS during an appearance on "NewsHour." He subsequently said he sympathizes with workers and that his comments were taken out of context .

Ross, who made his fortune buying distressed debt, noted that banks and credit unions have been extending zero-interest loans and other help to customers .

"The banks and the credit unions should be making credit available to them. When you think about it, these are basically government-guaranteed loans because the government has committed these folks will get their back pay once this whole thing gets settled down," Ross said in the interview.

"So there really is not a good excuse why there really should be a liquidity crisis," Ross said. "Now, true that people might have to pay a little bit of interest, but the idea that it's paycheck or zero is not a really valid idea."

CORRECTION: This story has been updated to correctly quote Ross' exact comments.


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