The Impact of a Shutdown

The federal government has been operating under a partial shutdown for more than 35 days as Congress and the president struggle to agree on a plan to reopen and continue funding the government.

In a lot of ways, this political stalemate only exacerbates the problems of those Charlotte Center for Legal Advocacy serves, threatening the safety, economic security and family stability of thousands in the Charlotte area.
We asked staff from each of our service areas to clarify how families in our community have been or will be impacted by this shutdown based on the legal assistance Charlotte Center for Legal Advocacy provides.
THE IMPACT :
On Low-Income Taxpayers
IRS Is Accepting Returns: The Internal Revenue Service (IRS) is still processing paper and electronic returns and plans to issue refunds to taxpayers.
Tax Season is Still On Schedule:The agency has also recalled 57 percent of its workforce to be on hand for tax season, which is still scheduled to start Jan. 28. The IRS will also be opening its call sites and responding to taxpayer questions, and Volunteer Income Tax Assistance (VITA) sites will be open next month. View local VITA sites
IRS Audits are on Hold: All IRS audit and examination functions and non-automated collections will continue to be put on hold during the shutdown.
On Families
Food Stamps Through February: Mecklenburg County Department of Social Services has already issued Supplemental Nutrition Assistance Program benefits (SNAP, also referred to as food stamps) for the month of February with the funding it has left from the U.S. Department of Agriculture (USDA). The USDA has said benefits may not be available for March if the shutdown continues.
SNAP protected 3.4 million people from poverty in 2017, two thirds of whom were children, seniors and people living with disabilities. In North Carolina, more than 1 million residents rely on these benefits to remain stable. In Mecklenburg County, 57,000 households receive SNAP benefits.
Free and Reduced Meals in Jeopardy: Funds for the National School Lunch Program are also running short, meaning that funds will soon run out for local students who depend on this program to receive free and reduced-price meals at school.
On Consumers
Vulnerable Homeowners Could Be Pushed into Foreclosure: The shutdown interferes with foreclosure prevention assistance from the U.S. Department of Housing and Urban Development (HUD), affecting traditional and reverse mortgages.
Homeowners are pushed into foreclosure because they can’t get approval from HUD to remain in their homes. FHA home loan borrowers who are having problems getting assistance from their mortgage companies can’t seek assistance from HUD’s National Servicing Center.
Charlotte Center for Legal Advocacy and other housing advocates have asked for a stay of all judicial and non-judicial foreclosures for single-family homes and are waiting for a response. Many homeowners with direct and guaranteed loans are unable to obtain hardship assistance while the agency is closed because HUD plays a critical role in approving alternatives to foreclosures in both programs.
Halts Review of Critical Housing Applications: For reverse mortgages, all at-risk extensions for borrowers over 80 with serious medical hardships, which require HUD review and approval, can’t be reviewed during the shutdown. Other repayment plans for defaulted property charges and extensions of foreclosure timelines for reverse mortgages can’t be reviewed by HUD during the shutdown and foreclosures may move forward without an elderly or disabled homeowner being able to work with HUD on foreclosure alternatives.
Late or Missed Payments Impact on Consumer Credit Reports: The shutdown has highlighted the fact that 4 in 10 adults can’t afford a $400 emergency expense and live paycheck to paycheck to get by. One unexpected life event — an accident, sudden diagnosis, job loss, or even a government shutdown — can derail a family’s stability.
Federal workers who are unable to make payments on their mortgages, rent, student loans, car loans, credit cards, etc. have those late or missing payments reported to the credit reporting agencies.
Negative information about late payments can stay on a credit report for up to 7 years and can impact interest charged for future loans; availability of credit; decrease in a credit scores. Additionally, missed payments may result in creditor late fees. Creditors may grant a forbearance if the consumer contacts them to let them know they are a federal employee.
On Immigrants
Immigration Court is Closed: With Charlotte’s Immigration Court closed, all in proceedings are worried, unsure and confused about their future.
There are individuals who would have received asylum by now if their trials had not been canceled. Now, they are looking at waiting years to receive asylum before they can sponsor family members facing dangerous circumstances in their home countries.
Those applying for other forms of relief are also looking at years of delay because their trials have been canceled. That means they will have to wait years to travel again or visit relatives they haven’t seen in years, sometimes decades, including sick or elderly parents.
Backlog of Cases and Problems Exacerbated: Charlotte Center for Legal Advocacy attorneys serving people in Charlotte’s Immigration Court are struggling with how to advise clients, especially those who live far away.
The court’s closure cancels hundreds of cases that were scheduled to be on the docket over the last six weeks, adding to an already overwhelming backlog of cases the court is expected to hear.
For those awaiting rescheduled trials, key information for their cases could be lost before their new court date, such as a witness not being available or documents getting misplaced.
When the government does re-open, there is an increased likelihood that mistakes will happen that won’t be corrected.For example, someone could change addresses during the court’s closure and not receive their rescheduled court date notice in the mail. Missing that court date will lead to an automatic removal order, while the reopening of cases is at the discretion of a judge.
All our clients are poor and often work jobs where they either can’t take off, or if they do, they risk not being paid or getting fired. This then impacts their ability to pay their bills and maintain stability.
Not being able to tell them they have court until the day before increases the likelihood they may miss court and get a removal order. It could harm their shot at legal status if their attorney can’t get the case reopened, and it creates the need to appeal, adding more work to the attorneys’ caseloads. This snowball effect creates a drain on our resources, which ultimately means we can’t serve more people who need help.
Just this week, one attorney filed 12 motions to continue cases:
“To draft, review, print, and prepare for filing took almost two days of my time,” says attorney Lisa Diefenderfer, “I know these motions are going to the court to just sit in a box and may never even be read if the government stays closed for long enough. The issue is, though, that if I didn’t file, and the government re-opened, could that potentially harm or disadvantage my client? Maybe, maybe not.”
USCIS Has More Time to Consider Applications for Relief: One bright spot in the shutdown is that the U.S. Citizenship and Immigration Services (USCIS) office, which approves applicants for green cards and other forms of immigration relief, is still open.
Because this office is open, but other agencies in the immigration system, including the immigration courts ordering deportations are not, the shutdown gives USCIS more time than it would normally have to consider applications and grant relief to qualified applicants, allowing them to remain safely in the U.S. Prior to the shutdown, immigration judges were ordering deportations of applicants before USCIS could approve their applications.
Immigrants face the same Impacts as Citizens: Immigrants are members of our community, which means that they are feeling the same effects that citizens are feeling. Some aren’t getting a paycheck, or are trying to make ends meet while going without a spouse’s paycheck, just as other federal workers and contractors are.
As the Rev. Martin Luther King Jr. once said
“Whatever affects one directly affects ALL indirectly … I can never be what I ought to be until you are what you ought to be.”
With no sign of a compromise, the shutdown’s impact will only continue to grow in our community. We must consider our neighbors who are fighting to maintain their safety, economic security and family stability.
Charlotte Center for Legal Advocacy continues to be a champion for those in need, fighting to ensure ALL people have access to the resources that meet their basic needs.
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