A prolonged federal government shutdown would have a crippling effect on New York’s economy, U.S. Sen. Charles Schumer told a business group Monday.
“The stakes for New York are high,” Schumer, the Senate’s Democratic leader at odds with President Trump, said at the Association for a Better New York breakfast at the Roosevelt Hotel in Midtown Manhattan as the shutdown entered its 17th day.
Among those affected, said Schumer, are banks and investment firms dependent on the Securities and Exchange Commission, New York City’s mass transit system and John F. Kennedy and LaGuardia airports.
Schumer and House Speaker Nancy Pelosi have battled Trump over the president’s desire to construct a border wall adjoining Mexico.
Roughly 32% of New York State’s 51,676 federal employees are not working now. “But it’s also true that the federal government plays a much larger role in facilitating the New York economy,” Schumer said.
According to Schumer, 94% of SEC employees are now on furlough. “That means most of their work stopped,” he said. “We’re home to all the banks and accounting firms — they all rely on the SEC, day to day, to navigate the complex rules of the system.
“Because it’s the start of the new year, the timing couldn’t be worse. Companies are preparing major updates for their shareholders — annual reports, proxy statements. This is all going to slow down our New York economy and the national economy.” Plus, he said, dozens of private companies are delaying preparations for their initial public offerings.
Delays in tax refunds from the Internal Revenue Service and mortgages from the Federal Housing Authority will also have a ripple effect, he added.
Schumer also warned that an extended shutdown could spell add to the troubles of the state-run Metropolitan Transportation Authority, which operates mass transit in metropolitan New York. The Federal Transit Administration reimburses the MTA $130 million to $170 million monthly for rail-car purchases, track work and other capital expenses.
‘It is estimated that the MTA could last four to six weeks without those,” Schumer said. “Once we’re in February, all bets are off. If the FTA is still shut down in February, the MTA has some hard decisions to make. What are they going to do? Should they borrow? It will cost them more money. Should they cut services? It would be the wrong thing to do."
The MTA is one of the largest municipal bond issuers with about $40 billion in debt and has its own struggles with operational and capital funding.
Airports, Schumer added, are a major economic driver. Retail and commercial sales at John F. Kennedy International Airport alone total $45 billion. Some border-patrol officers, he said, have stopped coming to work at JFK and LaGuardia airports because they cannot afford the bridge tolls. Others have called in sick.
The problem has also resonated upstate, he said, citing a sharp drop in lodging business due to the closure of the Franklin D. Roosevelt Home in Hyde Park.
“The list goes on and on and on, but I think you get the picture,” Schumer said.
While Trump has estimated a $5.7 billion cost for the wall, Schumer said the tab could reach $70 billion.
“Of course, that’s not being paid for by Mexico,” he told the breakfast gathering. Much of the land, he said, is on private property and “Texas law leans very much toward the private property owner more than the federal government.”
Schumer and Pelosi are still pushing for appropriations bills that will separate the shutdown from the wall dispute. He called for Senate Majority Leader Mitch McConnell, R-Ky. — largely silent as the shutdown controversy escalated — to step up.
“He’s totally ducking, because he stuck out his neck and he got burned. Trump pulled the rug out from under him. I understand his reluctance, but there’s a greater good here.”
