Shutdown loan bill makes step forward

With one government shutdown behind federal workers but another one possible, state lawmakers moved ahead Tuesday with a bill to ease their financial concerns.

The plan advanced by a divided House Commerce Committee would set up loan safeguards if another federal outage shutdown occurs and employees endure more paycheck delays. Private lenders would receive a state guarantee they’ll recover principal if they make interest-free loans to affected federal employees.

A historic shutdown ended last week, but President Donald Trump and Congress have less than three weeks to avoid another one.

Rep. Zack Stephenson, DFL-Coon Rapids, said his bill provides comfort amid a “very real fear for our federal employees.”

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Neil Hoadley is pessimistic. He’s an aviation systems specialist and union official based in Rochester.

“We have no confidence come February 15th everything is going to go back to normal,” Hoadley said.

Under the bill, workers could borrow up to $5,000 per month for three months. No interest could accrue until well after a shutdown ends, giving workers time to repay the debt without penalty.

There would be a $2.5 million put into a fund to protect banks in the case of loan defaults.

Jim Amundson of the Independent Community Bankers of Minnesota said his institutions are willing to partner with the state on a solution. But he said there are many unknowns around the specific terms of loans and whether proper disclosure documents could be produced given that the duration of shutdowns will vary.

A Senate companion hasn’t been scheduled for a hearing yet.

Legislative Republicans voiced concern about the way the program is structured.

Rep. Tim O’Driscoll, R-Sartell, was uneasy about precedent if there are future standoffs and if there’s not adequate resources to protect them, too. He said the clashes in Washington might only grow now that Democrats control the House and Trump, a Republican, in the White House.

“Are certain people going to be taken care of now and then there’s that no way we can take care of another group of people should that inevitability happen that we end up with no fiscal budget at the end of September of ‘19?” O’Driscoll asked.

Democrats said federal workers are facing unprecedented strain after going a month without a paycheck. Many still haven’t received full back pay after last week’s reopening of government agencies.